Monday, 19 August 2019

Killer Arguments Against LVT, Not (467)

The Daily Express rehashed the garden tax nonsense three days ago, we've done that.

The facts, as reported, are as follows:

"In June, the Labour Party leader unveiled recommendations to introduce a “progressive property tax” - which could see council tax replaced by one based on current house prices."

Which seems pretty uncontroversial to me, it's not far off a modest Land Value Tax.

The Conservative Party calculated the average home would pay £374 a year more than they currently pay in council tax each year.

They are shit at maths. If it replaces Council Tax, by definition, the average bill won't change. The median bill will drop significantly; bills on more expensive homes will go up.

They include this lengthy quote:

Matthew Lesh, head of research at the Adam Smith Institute think tank, told

“Labour has completely misunderstood the nature of the housing crisis. Their proposals are nothing more than an attack on private ownership and development of land, of families having a stake in society and an asset that they can call their own.

“It would result in fewer people having the opportunity to own their own home, not so-called ‘Land for the Many’. Labour’s plans would wreak havoc on the housing market. 
Time and again we’ve seen when the state tries to control a market it leads to shortage and lower quality — but Corbyn has never learned.

“Young people want to own their own home, not rent from the state the rest of their lives. Rent controls too would cripple the market, which has failed everywhere in the world it has been tried.

So far, so blah, what's his suggestion..?

“There is merit in reforming the council tax system, that is based on outdated 1991 valuations, but this means creating a single, regularly updated land value tax that replaces council tax, business rates and stamp duty in a revenue neutral manner. This is sensible tax reform that sadly Labour is undermining by putting it in the terms of class warfare.

Splendid suggestion, much better than Labour's of course. Chuck in Inheritance Tax as well to show that it's not a jealousy surcharge, it's just a service charge. The more taxes you roll into LVT, the better IMHO.

But why did the Daily Express include this part of the quote? If Labour proposed exactly that, they'd promptly dismiss it as a "garden tax" and we're back to Square One. Quite clearly, average annual bills would be higher than Council Tax bills alone, because it would include an element of SDLT and IHT, although the tax on the median home would be about the same as Council Tax.

The rest of the article is the usual garbage of no interest to the intelligent reader. Attack on wealth, negative equity, Poor Widows, landlords passing on the tax etc.


benj said...

So a regressive Council Tax isn't class warfare, neither is progressive income tax (I assume Lesh thinks this Con backed policy is OK), but a flat rate tax on land/immovable property is?

Mark Wadsworth said...

BJ, Homey doublethink.