Killer Arguments Against LVT, Not (442)

From 1984: "To know and to not know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both of them, to use logic against logic, to repudiate morality while laying claim to it, to believe that democracy is impossible and that the Party was the guardian of democracy.

To forget, whatever it was necessary to forget, then to draw it back into memory again at the moment when it was needed, and then promptly to forget it again, and above all, to apply the same process to the process itself.

Here's a real life example, armchair twat @RomanchukBrian on the topic of LVT:

"So your plan is to have city centres consisting of 40-storey blocks surrounded by the ruins of abandoned buildings? And you are wondering why economists are not endorsing this?

"It's rarely been tried because it's a policy that is obviously a disaster. If it makes sense in *your* model, *your* model is wrong.

"The owning firm goes bankrupt and nobody is stupid enough to pay the LVT in a deliberately sabotaged city core? You end up with abandoned buildings.

"North American city planners have been struggling for decades to rejuvenate city centres. Imposing a tax to wipe out the economic viability of the core would not exactly help.

"And away from city centres, you would tax a small farm across the road from a new development with a couple dozen houses on the same amount. So you would wipe out those farmers as well."

As you can see, in *his* model he completely contradicts himself. His imaginary waves of destruction start with the outer fringes of the centre, leaving just 40-storey buildings in the very centre, which then in turn are abandoned for exactly the same reason that they were built in the first place... the waves spread outwards and ultimately, farmers are driven out of business. He didn't make the final leap and claim that with cities and farmers ruined, the entire tax burden would fall on the couple of dozen houses, which would also promptly be abandoned. Which is a shame really, as it would complete the circle of nonsense. If he'd stuck to one or the other extreme (either people rush to the centre; or people rush away from the centre) then it wouldn't be so immediately obvious that he is a complete idiot.

Logic* is alien to these people, as are actual facts - most economists do endorse LVT; it is not a hypothetical, whenever and wherever it has been implemented it has led to more development in city centres; and as land would be taxed on its optimum permitted use (which 99 times out of 100 is its actual use), the tax on the farmland would be very low, much lower than one the houses across the road. DoubleThink is so much easier when the mind is unclouded and unburdened by actual facts!

* The logic is easy. In an LVT-free world, the rental value, selling price and mortgage repayments if you want to occupy/own any particular plot are set by normal market forces - supply and demand etc. Taxes on earnings and output are arbitrary amounts taken from you by the government.

LVT is, from the point of view of the land owner/purchaser, exactly the same as an interest-only, variable-rate, non-recourse mortgage on the land element. The LVT simply replaces the mortgage repayments on the land element AND some or all of all the arbitrary taxes on earnings and output, making it a double-win for those who don't own any land and a break-even for most of those who do.

With a normal purchase mortgage, there is a risk that the interest rate increases and/or the potential selling price of the land falls, potentially getting you caught in a nasty vice. LVT completely de-risks this. The quasi-interest payments only go up if the land value goes up and as the LVT liability attaches to the land, not to you personally, you can never end up hugely out of pocket.