Tuesday, Aug 24, 2010
Andy Burnham wants LVT
Daily Express: ANDY BURNHAM WANTS TAXES ON HOMES, LAND AND WEALTH
The Shadow Health Secretary, one of five candidates to succeed Gordon Brown as Labour leader, proposed new levies on land values and family assets to raise more cash to repay the Treasury’s debts.
Posted by micasasucasa @ 07:22 AM (1477 views) Add Comment
26 Comments
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1. Reck B said...
There should be a tax on debt. Not wealth/assets
2. uncle tom said...
"Last night, senior Tories were delighted at the signs that the Labour Party is lurching further to the Left and risking becoming unelectable"
For once, The Express hits the nail on the head..
3. David John Thomas said...
a good idea tax property. in australia any property besides your own home is taxed 1.4% of the land value each year. it will keep land values down and stop people buying for useless purposses and is a form of capital gains tax paid by people who can afford. if they dont like it sell it
4. icarus said...
Ridiculous "class warfare" spin by this rag. Centre Forum is a liberal think tank which is closer to the Liberal Party (which after all is in government) than to any other. It (and the OECD) proposes the same thing as A Burnham is proposing. Its argument is quite sober and balanced . See pages 46-48 of http://www.cenreforum.org/assets/pubs/a-balancing-act.pdf
5. mark wadsworth said...
Yippee! He's been reading my blog.
Boo! Although he got the bit about cutting Inheritance Tax and Stamp Duty, he didn't cotton on to the idea of reducing all other taxes. And government spending, of course.
6. icarus said...
Sorry, make that pages 46-48 of http://www.centreforum.org/assets/pubs/a-balancing-act.pdf
7. Crunchy said...
"They don't like it up em Mr Mainwaring."
8. drewster said...
Just goes to show how tough it is to sell LVT to most people.
9. easybetman said...
As Mark said, it has to be a replacement tax and Labour tend to see that as an additional tax. Perhaps if LVT (I prefer property tax as I think it is messy to separate building from land), the legislation will have to ban the tax that it is replacing (e.g. VAT, Council Tax, Business Rates).
10. mark wadsworth said...
@ EBM, I have only ever seriously proposed replacing Council Tax, SDLT, IHT, CGT, Insurance Premium Tax & TV Licence fee (total revenues about £40 billion a year) with a flat 1% tax on residential properties. Business Rates (revenues about £25 billion a year) is similar to LVT anyway, that just needs tweaking a bit.
VAT is the worst tax of all, but replacing that is trickier because total revenues are £90 billion a year and the EU says all member states have to have a standard rate of 20% (which explains why the Tories did it in such haste).
11. inbreda said...
5. drewster said...Just goes to show how tough it is to sell LVT to most people
..and just how appalling the DE is, and how stupid its readership.
12. uncle tom said...
It's all rather academic though - Burnham is not likely to win the Labour leadership, and as the party not only needs to re-define itself, but also has to distance itself from its legacy, (not to mention the little matter of it being effectively bankrupt..); it is unlikely to be a serious contender for government at the next election, unless of course, DC & Co. get things very badly wrong..
13. Hp Hoper said...
Thats a tax on all assets though, how are you supposed to save up a deposit or save for retirement if you keep getting taxed extra on your savings and property?
All it does is damper aspirations of people and confirm my beleif I should have got into shed loads of debt lived the high life and then had the debt written off instead of scrimping and saving for a house and my future. So glad they didnt get in power.
14. down wave said...
The Shadow Health Secretary - what a joke - if it was not so tragic, it would be laughable.
The amount of debt that New Labour has got us all into to improve the National Health Service alone and the resulting: inflation of food prices; the hardship, stress, worry, unemployment, bankruptcies and money related tragedies that almost everyone is now experiencing is and will cause more health problems than New Labour’s improvement to the NHS solved.
What a barmy bunch of ego inflated uneducated nincompoops the Labour party are.
15. icarus said...
UT @9 - is it academic though when these ideas aren't confined to Burnham and Labour? As for the govt getting things badly wrong (or at least overseeing a long recession) that's not too unlikely. Lots of bad numbers are coming out of the US at a time when the economy is supposed to be coming out of recession.
16. mark wadsworth said...
Icarus, UT is quite right, all this LVT talk is entirely acadameic. Vince Cable completely shelved his Mansion Tax idea once he got in, and lo and behold, Miliband and Burnham started talking about it as soon as they were out of power.
I do sometimes what would happen if by some coincidence Fred Harrison, Dave Wetzel & I took over the country? How would they get to us?
17. uncle tom said...
Icarus,
People are resigned to bad UK numbers, and, I think, a double dip. But DC needs to get all the bad news out of the way as quickly as possible - he doesn't want falling house prices on the eve of the next election..
18. drewster said...
If we get a really hard recession, then talk of "wealth tax" might get a bit louder. Also unless we also get talk of capital controls, it will quickly become obvious that land is the only kind of wealth which can be taxed safely.
19. icarus said...
drewster - good points. Mark w and UT - It's likely that fiscal consolidation won't be achieved through cuts alone, especially if they risk undermining human and other capital. That means accepting large deficits or raising new taxes. Land/property taxes have the benefits of being the taxes least likely to harm the economy or to cause a shift of activity across borders. LVT may not happen, but something's gotta give and this could be the hard choice that's made.
20. The Number Cruncher said...
MW @ 12
In ascending order (I apologies for the use of 'they' - they is of course means a wide range of people and groups often not in communication with each other)
Read some books on how MI6 and the CIA control governments around the world (and do not think that they refrain from doing it in their own countries)
1. control of media (they have place men in all our media - most of the news editors of the major news channels are knobbled and receive a second tax free salary from H.M. Security Services)
2. heavily financing your opposition (suddenly the opposition will receive huge donations)
3. digging all the dirt they can on you, Dave and Fred and releasing it or trying to black mail you with it (they knobbled Ramsay McDonald and Lloyd-George)
4. creation of organised faux opposition groups and spending heavily on getting public sympathy with those groups Taxpayers Alliance ring any bells!
5. financing rivals within your own organisation (the 'moderate' candidate - how did you think Tony Blair beat Gordon Brown to the leadership)
6. invented Financial scandal with 'real' evidence - that bank statement looks a bit funny!
7. sexual scandal (suddenly you find out you are in fact a closet child molester) Look at what the CIA did to Noriega - he was made out to be an perverse occultist
8. accidental death (how is that heart condition? watch out for a cup of tea offered by a stunning blond at a charity event
9. "assisted" suicide (textbook suicide a la David Kelly (that is the MI6 textbook, not the medical one))
10. open assassination (you would have to be very good to avoid all the other traps and get this far)
11. destabilisation/ violent agitation using criminals and thugs - Look at Mosadeq in Iran, they used paid thugs by the thousand
12. organised financial crisis - Harold Wilson fell to this one
13 coup d'état - if all else fails
21. letthemfall said...
Seems to me that those who object to any kind of wealth tax are those who are either wealthy, or think they might be wealthy one day. Needless to say the latter are the majority. LVT would hit relatively few people, since most land in this country is owned by a very small proportion of the population. Yet their advantage is defended by many of the rest.
But the same is true of other forms of wealth tax, of which high rates on high earners is one. Nearly everyone objects to that, despite not being high earners. But high earners acquire their money through economic rent rather than productivity, and thus should be more heavily taxed on it. Yet I do not have any confidence that this will happen. Instead I expect to see further advantage given to the wealthy at the expense of everyone else.
22. mark wadsworth said...
Hp Hooper: "how are you supposed to save up a deposit or save for retirement if you keep getting taxed extra on your savings and property?"
That's the problem - Andy Burnham messed up there. There shouldn't be taxes on "wealth" generally, because a tax on cash on deposit or shares is much like extra income tax; there should only be taxes on state protected quasi-monopolies (of which land values are the main example, but there are lots of minor ones like radio spectrum, copyrights, oil and coal mining licences, landing slots at airports etc).
But even so, if the trade off is £x billion extra income tax or £x billion extra monopoly value tax, why don't people accept that the £x billion monopoly value tax has low or no deadweight costs on the economy, unlike extra £x billion income tax?
Conversely, if you had a choice of cutting taxes, why wouldn't you cut income tax before you cut monopoly value taxes?
23. letthemfall said...
mark w
I can see how vat causes a deadweight loss but I think that is less clear with taxation on high incomes. Taxation leads to redistributed wealth but not necessarily to reduced production.
24. mark wadsworth said...
LTF, indeed. The biggest deadweight losses are with VAT and with Employer's NIC. And means-testing of benefits.
If you strip those away, you end up with a flattish tax system with income/corporation tax rates around 30%. The deadweight costs of a flat low rate income tax are much lower than VAT etc, but they are still there (and not as low as LVT) and so the deadweight costs/Laffer effects mean that hiking income tax much above 40% for higher earners brings in realtively little extra revenue as against unknown deadweight costs. And don't forget that over half of all the tax breaks accrue to higher rate taxpayers - so if we had no higher rate tax the benefit they get from tax breaks would go down as well, it's not a one way street.
And I'm a fair minded chap, if we have LVT, then by and large that would be an excellent replacement for higher rate income tax and all the other jealousy surcharges (IHT, SDLT).
25. mark wadsworth said...
TNC 20, that's a good list, ta, I'll know what to watch out for.
PS< you're not a conspiracy theorist, by any chance?
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