Land Value Taxation

[Bald Rick]

Letter from Peter Reilly, Labour Party land campaign liaison officer in today’s Daily Pist (& likely other local/regional papers)

“Growing inequality in the economy is a huge issue but until one fundamental cause is highlighted, the solution will be elusive.
Wealth and income inequality will inevitably increase as long as landowners are able to benefit from rising land prices at the expense of individuals and Governments. Land is in fixed supply.
Any public investment in infrastructure, services and amenities, and any grants or subsidies to agriculture, industry and individuals and any easing of credit, ultimately boosts the demand for land and therefore its price and rental value. It seems that policies to benefit society and the economy always transfers wealth to landowners.
Seventy per cent of the land in the uk is owned by just 1% of the population. The only effective solution is to recapture land values for the benefit of the community as a whole. That is best achieved by taking land values.
Land Value Taxation (LVT) has added benefits of reducing land speculation, increasing the supply of land on the market for housing, and lowering land prices. Moreover, LVT is cheap to administer and is difficult to avoid or evade.
LVT should replace all other property taxes, which are deeply regressive and penalise small businesses.”

Discuss

 

[spin cycle]

well planning system determines supply of 'housing land'....so that arguement is void

as to lvt.....might not be to bad if sensible.....no taxation should be punitive though

 

[Little squeak]

the dutch have had a wealth tax for some time the current rates are explained here https://www.dutchnews.nl/features/2018/01/key-changes-to-dutch-taxes-you-need-to-know-about-in-2018/ the tax would probably come to more than the income on the land in some places at these rates. I expect Labour would want even more too.

 

[Still Farming]

Penalise small business?
Shaft it more like ,if any beneficial possible windfall is taxed or state claimed?

 

[Slippery Slope]

Not all landowners are wealthy. It has taken four generations of skrimping, saving and working frigging hard to become owner occupiers here, so as far as I am concerned Mr Reilly can take a hike.

 

[DrivingDig]

Maybe farmers/Landlords won’t like this idea but 90% of the electorate can probably be convinced this is a marvellous idea. Another sign that profits from land activity will always be curtailed by one means or another.

 

[Goweresque]

Maybe farmers/Landlords won’t like this idea but 90% of the electorate can probably be convinced this is a marvellous idea. Another sign that profits from land activity will always be curtailed by one means or another.

Given that more than 90% of the land values exist in urban areas rather than in agricultural land, I think the urban masses might have a bit of a problem with land value taxes...........there's about 43 million acres of agricultural land in the UK, so its value is no more than £430bn. By contrast the value of all the housing in the UK is over £6tn (https://www.theguardian.com/money/2017/nov/29/value-of-uks-housing-stock-soars-past-6tn). Thats just the housing value, commercial property would be on top, thats at least another £1tn.

We think when someone says 'land' they mean open fields, in reality it means housing estates and office blocks.

 

[capfits]

Land value tax is way overdue in this country.
Remember it is land value not property value, but there are correlations for sure.

So let's say we have 2 identical pockets of land.
One gets a road and services plumbed into it. Which is more valuable?
Then buildings or houses get built which is more valuable? You get the picture.

And a nation where arguably the value of land has increased a higher rate than say wages then why not? Is taxing work not more immoral in the eyes of some?
Gets tax avoiders, (the turf ain't moving to another jurisdiction)
If you have no land you have no wealth, arguably.

Of course it's a possible change but one that I think is of our time.
As a country we are in debt while being told we are wealthy as a nation.
Plenty of other nations have land taxes including the US.

 

[Goweresque]

Also at the end of the day, any tax on the capital value of an asset can only be paid by the income that asset can bring in, because everyone can't sell their assets at the same time. For example if there was a 5% tax on the value of farmland all that would happen is the value of land would collapse until 5% of the capital value was something the income from the land could afford.

Capital values are theoretical, while incomes are actual, so an LVT merely means that everyone has to live in a house that their income can afford the LVT on, or own a business that can generate enough income to pay the LVT on the land the business uses, thats all. And as such the total revenue from an LVT cannot exceed the revenue from an income/profits tax, because only income is renewed every year, capital is not.

People seem to think that there's £Xtn in land values out there and its like a treasure chest to be plundered. Trouble is its like the end of the rainbow, as soon as you get close to it, it disappears.

 

[topground]

There is already a tax on land that has been built on, its called Council Tax and business rates.
What level of tax per acre on your agricultural land would make it uneconomic to continue to occupy to produce food or own it?
At what stage is land tax counter productive because farmers no longer can afford to farm, land values drop, banks call in loans because the collateral has disappeared and food imports increase beyond the current high levels.
I have no idea!

 

[Fallowfield]

'Roads are made, streets are made, railway services are improved, electric light turns night into day, electric trams glide swiftly to and fro, water is brought from reservoirs a hundred miles off in the mountains - and all the while the landlord sits still. Every one of those improvements is effected by the labour and cost of other people. Many of the most important are effected at the cost of the municipality and of the ratepayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is sensibly enhanced. He renders no service to the community, he contributes nothing to the general welfare; he contributes nothing even to the process from which his own enrichment is derived.'



Winston Churchill.

 

[Bill the Bass]

'Roads are made, streets are made, railway services are improved, electric light turns night into day, electric trams glide swiftly to and fro, water is brought from reservoirs a hundred miles off in the mountains - and all the while the landlord sits still. Every one of those improvements is effected by the labour and cost of other people. Many of the most important are effected at the cost of the municipality and of the ratepayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is sensibly enhanced. He renders no service to the community, he contributes nothing to the general welfare; he contributes nothing even to the process from which his own enrichment is derived.'



Winston Churchill.

Hmm, not strictly true is it?

 

[newjames]

'Roads are made, streets are made, railway services are improved, electric light turns night into day, electric trams glide swiftly to and fro, water is brought from reservoirs a hundred miles off in the mountains - and all the while the landlord sits still. Every one of those improvements is effected by the labour and cost of other people. Many of the most important are effected at the cost of the municipality and of the ratepayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is sensibly enhanced. He renders no service to the community, he contributes nothing to the general welfare; he contributes nothing even to the process from which his own enrichment is derived.'



Winston Churchill.

Sorry but that is in the present day bull. We have water and sewers, phone cables national grid and 11 thousand volt cables a new road across our farm all of which as a tax payer i helped pay for and all of which have lowered the value of my land. We have footpaths in 95% of fields, we suffer flooding due to house building up stream, pansies seem to think its fine to dump rubbish in gateways or out of their gardens, so perhaps if they want a land tax then they would like to pay a fair price for all those services we and many land owners provide

 

[Grass And Grain]

If a land tax was an annual payment, then...

...most farmers would be receiving the BPS subsidy based on land area, then have a tax based on area × value, which seems pointless.

A specific tax for development land would be a different thing altogether. Development land tax could be used to help fund agricultural subsidies, thereby spreading the massive winfalls that a few farmers get to everyone else who hasnt been lucky enough to have building land.

Let's face it, the guys who are lucky enough to sell a field for building and net £20 million, then buy up farmland and make it ill affordable for commercial farmers to compete.

Tin hat on.

 

[Exfarmer]

The simple answer to collecting land taxes , from people who cannot afford to pay is simple, you don’t. You wait until the property is sold then claim the per centage of tax which has rolled up.
This would apply to any transfer of the land. One beauty of this is that with luck inflation of land values means, the owner does not apparently lose anything. The government in the main just takes the increase.
Of course this increase is taxed already, but it means the government would have far greater borrowing power, as it would put a huge amount of theoretical tax into it’s coffers without having taken a penny.
Even 1% property tax would in theory raise something like £120 billion a year ( if I have my numbers right, there may be some double counting in there) . Can you imagine the spending spree ministers could have!

 

[farmerm]

Over generations of living on the breadline our family have bought 250 hundred acres of land. The theoretical monetary value may has increased but each acre is still only an acre, we don’t have any more wealth than when it was purchased, until it is sold. If it is sold there will be a pretty massive tax bill. Socialist asset taxation is to rob the hard working and frugal in order to fund the lazy and feckless.

 

[borderterribles]

Over generations of living on the breadline our family have bought 250 hundred acres of land. The theoretical monetary value may has increased but each acre is still only an acre, we don’t have any more wealth than when it was purchased, until it is sold. If it is sold there will be a pretty massive tax bill. Socialist asset taxation is to rob the hard working and frugal in order to fund the lazy and feckless.

That's how it has always been! The only bit where their plan falls down is in getting the. " lazy and feckless" to vote , in sufficient numbers. As they are, by nature, lazy and feckless!

 

[slackjawedyokel]

I don’t know whether land value taxation will come to pass. I could certainly see inheritance tax relief on farms being reduced or discontinued.
Perhaps it’s a good time to think about succession planning?

 

[essexpete]

'Roads are made, streets are made, railway services are improved, electric light turns night into day, electric trams glide swiftly to and fro, water is brought from reservoirs a hundred miles off in the mountains - and all the while the landlord sits still. Every one of those improvements is effected by the labour and cost of other people. Many of the most important are effected at the cost of the municipality and of the ratepayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is sensibly enhanced. He renders no service to the community, he contributes nothing to the general welfare; he contributes nothing even to the process from which his own enrichment is derived.'



Winston Churchill.

Interesting history, I have not seen that before. I do have the feeling that Churchill was not at his best with financial affairs either state or personal. He also held rather changing political views over the course of a long life.

 

[7610 super q]

The politics of envy. What next window tax ?