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Wealth Distribution In Britain

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Why you don't go the whole hog and shoot them or gas them? Communism failed get over it. The people in 1st world countries get exactly what they deserve, our exploitation of 3rd world economies means that is not always the case around the globe.

There is abundant opportunity in the west for success and a good life go and read some of Lings posts for a true global perspective.

If you are a beggar on a beach of gold it's your choice.

Here we go with the 'isms. Chill. As I mentioned in many posts, I would get rid of all forms of income tax. How is that contained in any 'ism? Get the government to just butt out, except for capping the extremely wealthy.

Go and study history. Real history. It will blow your mind. What we are being taught today about the various 'isms simply isn't right, and in fact is simply intended to trap you and I in another so-called 'ism.

We live in a world where private money controls government. That is the 'ism you should really fear. A world with 15,000 lobbyists in Europe, 24,000 lobbyists in the USA. A military-industrial complex. A Prison industry. In 1980, there were 600,000 total prisoners in the USA, today there are almost 7,000,000. It has become a money making machine, and a manufacturing industry using free labour. How do you think this happened, and do you want to be a slave to those interests? Well, we already are, and it is because they have more wealth than our government does. Our taxes go to feather their interests. You should realize that we have just witnessed the greatest theft in history, the movement of private debt to sovereign debt.

This means that, whereas the debt could have previously been written off, it will now live forever, and you and I and our future generations yet unborn will be paying for it. And how did this happen. Go and ask the lobbyists.

You will never stop this until you realize that the money of our nation is ours, and that no individual should be allowed to accumulate too much of it.

Edited by Toto deVeer

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It is hard for a large group of people to have a monopoly! Outside the more deranged sectors of the BTL mob, I don't think there are many landlords that deliberately price themselves out of the market - who would turn down a few percent yield on a big investment? Yes, I know some do, but it is (I think) rare to do this consistently.

Actually, not true. A large number of people can each hold an individual monopoly.

The point was made that the owners of an area cannot be replaced in the market. Somebody who cannot be replaced in the market holds a form of monoply.

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Maybe less developed countries are just further along the path of degrees of ever concentrated wealth than we are, take Brazil for instance where the wealthy have to live behind high walls and gates and are always in fear of kidnap. Countries with huge extremes and without a stable middle-class are not generally pleasant places for either group, I don't want the UK to end up like that. If you exclude people from essentials like housing then the logical consequence is slums and overcrowding, and this the natural order of things unless you have a deliberate policy to balance things out. If a professional cannot afford decent housing then what about everyone else? It doesn't bode well.

I think it's the other way round. The less developed countries haven't moved as far as we have in distributing wealth more equally. For all the complaints about the way the developed western economies are forcing their populations into slavery we have liberalised our societies out of this way of life. If you're poor in the UK you still have enough to eat; clothing and shelter. In the developing world being poor is far worse.

The corporations that dominate our consumer society depend on consumers being able to afford the goods they produce. It's not in their ultimate interest to capture and hoard all the resources so that only a few benefit.

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Actually, not true. A large number of people can each hold an individual monopoly.

Yes, if I own a house and rent it out, then I have a monopoly over that house. However, I don't have a monopoly over any other house - and the definition of monopoly is pretty simple: many buyers, only one seller. If I am renting a roof over my head, I have a very large number of landlords to choose from. A situation further from monopoly is hard to imagine.

Now, is there an escalation of prices by pretty arbitrary allocation of capital? Sure. But that isn't a monopoly. By taxing property, you could forcibly re-allocate capital, but until you do it, you have no idea if your new allocation is any better than the last one.

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OK, I've slept on this and am trying to get my head around the issues.

Here's another question....

What about the larger farmer, who has, say 1000 acres of wheat....

Doesn't this place him at risk under a land tax; could he not lose his farm, and all the efficiency of production that it entails?

No more than charging him rent: most farmers in the uk are tenants and are already paying this to a landowner. At the same time he will find less (idealy no) tax on his wages and profits

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Yes, if I own a house and rent it out, then I have a monopoly over that house. However, I don't have a monopoly over any other house - and the definition of monopoly is pretty simple: many buyers, only one seller. If I am renting a roof over my head, I have a very large number of landlords to choose from. A situation further from monopoly is hard to imagine.

It contains a monopoly for the very reason you yourself outlined - the owners of say a town cannot be replaced in the market

The Uk government is also a monoply, despite the fact that it is operated by many individuals each individual holding a slice of that monopoly

You hold a monopoly over your particular car, but this has no implications because there is nothing important to a buyer about your car that cannot be provided by another car. The owners of real estate each hold a form of monopoly that has implications, because each owner holds something important to the buyer that cannot functionaly be replaced by any other owner or anyone else.

.

Edited by Stars

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OK, I've slept on this and am trying to get my head around the issues.

Here's another question....

What about the larger farmer, who has, say 1000 acres of wheat....

Doesn't this place him at risk under a land tax; could he not lose his farm, and all the efficiency of production that it entails?

Unfortunately, I've forgotten all the technical terms, but my understanding of a land value tax is that it taxes the value of the land per se, not what you do with it. For instance, a bit of land near a nice school or near a good train line or in the city of London is valuable because of the things around it, whether the owner does anything with it or not. The owner, so the logic goes, should be taxed for this value of the land, because it is not derived from any effort of himself.

On the other hand, in general, 1,000 acres of wheat field is likely to be miles from anywhere, probably will only have the benefit of one narrow lane, and so does not have any enhanced value. It has some value, because it is land, and probably a bit more because it is good agricultural land (as opposed to barren moor land which can only support afew sheep), but it won't be terribly much.

If the farmer does nought with the land, then of course the tax will be a burden. But, then it should be, because the owner is possessing the land (preventing anyone else from using it) and not doing anything with it. If the farmer uses it, the tax would be considerably less than the profit from the wheat, and also, the farmer should have less taxes on other things to pay anyway.

Peter.

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Unfortunately, I've forgotten all the technical terms, but my understanding of a land value tax is that it taxes the value of the land per se, not what you do with it. For instance, a bit of land near a nice school or near a good train line or in the city of London is valuable because of the things around it, whether the owner does anything with it or not. The owner, so the logic goes, should be taxed for this value of the land, because it is not derived from any effort of himself.

On the other hand, in general, 1,000 acres of wheat field is likely to be miles from anywhere, probably will only have the benefit of one narrow lane, and so does not have any enhanced value. It has some value, because it is land, and probably a bit more because it is good agricultural land (as opposed to barren moor land which can only support afew sheep), but it won't be terribly much.

If the farmer does nought with the land, then of course the tax will be a burden. But, then it should be, because the owner is possessing the land (preventing anyone else from using it) and not doing anything with it. If the farmer uses it, the tax would be considerably less than the profit from the wheat, and also, the farmer should have less taxes on other things to pay anyway.

Peter.

Yes that makes good sense.

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The owners of real estate each hold a form of monopoly that has implications, because each owner holds something important to the buyer that cannot functionaly be replaced by any other owner or anyone else.

I really don't see this. I have a monopoly over my house, I can price it as high or low as I want. If the price is too high, potential tenants can choose another house - thus, if I am to rent out a house, the rent has to be at a level that attracts renters. It would be a monopoly if:

1) All of the house owners were colluding to set rents (they aren't)

2) All of the houses were owned by one person - those teachers in Ashford are probably reaching the point where they have market distorting coverage, but I don't know of many others.

On the other hand, in general, 1,000 acres of wheat field is likely to be miles from anywhere, probably will only have the benefit of one narrow lane, and so does not have any enhanced value. It has some value, because it is land, and probably a bit more because it is good agricultural land (as opposed to barren moor land which can only support afew sheep), but it won't be terribly much.

And you'd still get horrific distortions. Essentially, farming, or simply having green fields wouldn't be possible anywhere near urban areas, because the potential value would be too high. 10 acres in Berkshire can go for 500K - without planning permission. Clearly high value land, are we really saying that we don't want anyone farming in Berkshire? Existing farms would be untenable when they got the tax bill for "200 acres of land that might, one day, be developed".

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Maybe less developed countries are just further along the path of degrees of ever concentrated wealth than we are, take Brazil for instance where the wealthy have to live behind high walls and gates and are always in fear of kidnap. Countries with huge extremes and without a stable middle-class are not generally pleasant places for either group, I don't want the UK to end up like that. If you exclude people from essentials like housing then the logical consequence is slums and overcrowding, and this the natural order of things unless you have a deliberate policy to balance things out. If a professional cannot afford decent housing then what about everyone else? It doesn't bode well.

The natural order of things is Tyranny and repression by the ruling classes. Luckily we have had enough freedom in the west for the vast majority of people to prosper.

Less developed countries are generally more unequal than the UK. The UK used to be like that with essentially serfs and a ruling class and little in between. Wealth has been getting less concentrated in the UK over the centuries, not more. It isn't a smooth progression, but the trend is there.

Wealth reflects historical imbalances, and it will change much more slowly than income inequality. Which is much more relevant I think.

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And you'd still get horrific distortions. Essentially, farming, or simply having green fields wouldn't be possible anywhere near urban areas, because the potential value would be too high. 10 acres in Berkshire can go for 500K - without planning permission. Clearly high value land, are we really saying that we don't want anyone farming in Berkshire? Existing farms would be untenable when they got the tax bill for "200 acres of land that might, one day, be developed".

That is a serious complication, as the world becomes more urbanized.

For the USA, in 1900, 90% of people lived on farms, by 1970, only 7% were living on farms. An interesting question is, what would have been the pattern over those 70 years if a land tax had been in force?

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And you'd still get horrific distortions. Essentially, farming, or simply having green fields wouldn't be possible anywhere near urban areas, because the potential value would be too high. 10 acres in Berkshire can go for 500K - without planning permission. Clearly high value land, are we really saying that we don't want anyone farming in Berkshire? Existing farms would be untenable when they got the tax bill for "200 acres of land that might, one day, be developed".

This is way beyond my competence, but I don't think that this is correct. 10 acres in Berkshire can go for 500K presumably because the purchasers hope that planning permission will be given. However, given the supposed designation of the land as agricultural, the Economic Rent (I think that this is the correct term) would not be that high, because its value for LVT purposes would only be its agricultural value (not what it might be if it was something else). It doesn't really benefit from schools, good train routes to London and so on, so it would not be taxed highly,

Peter.

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I really don't see this. I have a monopoly over my house, I can price it as high or low as I want. If the price is too high, potential tenants can choose another house - thus, if I am to rent out a house, the rent has to be at a level that attracts renters.

The monopoly over the structure of the house has no important implications because it can be replaced by anyone, it is the monopoly over the location that causes problems.

Your tenants above can find someone who can replace the house, but they can't find anyone else who can entirely replace the location or the benefits of the location - hence the monopoly component. Each land owner has a technical monopoly because nobody else can legally replace his service entirely. A small number of people may be legally entitled to nearly functionally replace what a landowner offers, but this is legal ability is restricted to a small group and as i said, even this small group and they can only compete as a near replacement.

You don't see it, though it was you that highlighted the market ir-replace-ability of landowners as part of your argument.

Edited by Stars

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Your tenants above can find someone who can replace the house, but they can't find anyone else who can entirely replace the location or the benefits of the location - hence the monopoly component. Each land owner has a technical monopoly because nobody else can legally replace his service entirely. A small number of people may be legally entitled to nearly functionally replace what a landowner offers, but this is legal ability is restricted to a small group and as i said, even this small group and they can only compete as a near replacement.

You don't see it, though it was you that highlighted the market ir-replace-ability of landowners as part of your argument.

If you're the sort of person who finds a house by saying "I must live at 2 Mercer Avenue", then yes, you're at the mercy of whoever happens to own it at the time - heck, they might not even be renting it. Most people look for houses by thinking "I need 3 bedrooms, 10 minutes from the station, with a garden" - and get about 100 potential properties from the agents. Unless all the owners of those properties are colluding...then it isn't a monopoly. It might be mis-allocation of capital....

This is way beyond my competence, but I don't think that this is correct. 10 acres in Berkshire can go for 500K presumably because the purchasers hope that planning permission will be given. However, given the supposed designation of the land as agricultural, the Economic Rent (I think that this is the correct term) would not be that high, because its value for LVT purposes would only be its agricultural value (not what it might be if it was something else). It doesn't really benefit from schools, good train routes to London and so on, so it would not be taxed highly,

Your idea would save the farmer, but would make the legislation impossibly difficult. You would have to create a proxy value for everything, so if Persimmon stuck some cows on their land bank, presumably they would pay less? Not quite the intent....

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Your idea would save the farmer, but would make the legislation impossibly difficult. You would have to create a proxy value for everything, so if Persimmon stuck some cows on their land bank, presumably they would pay less? Not quite the intent....

I don't think so. All land already has a use class for planning purposes, with agriculture and forestry being the default. Persimmon could stick some cows on stuff in their land bank. It would either not change the designated use class (so still pony up loads of LVT), or it would, back to agricultural, and Persimmon would lose the ability to build upon it (though they might produce some nice cheese, and not have to pay much LVT),

Peter.

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7.3% of Norway's population are immigrants compared to 8.9% for the UK but our levels of wealth inequality are double those of the Norwegians.

This is what you don't understand. The Scandinavians have a HUGE welfare bill for their immigrant populations. There are towns full of Middle Easterners who exist on welfare close to a monthly wage.

It is not that something that can be maintained.

The point is, how do you want to achieve equality? From where I'm sitting, white people in London who don't work in finance, are the ones struggling from income inequality more than anybody else.

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I do not think that property taxes are passed on to tenants in the US.

No matter what you tax or where you tax it, and the end of the line the end user pays the tax. It can't be any other way. If you take a cab ride you pay the duty and vat on the fuel, you pay the vat on the purchase of the cab, you pay the road tax, you pay the insurance premium tax etc that can be apportioned to that cab ride.

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Conceptually it is pretty easily passed on. If someone wants to live in an area, he has two choices:

1) Choice 1: buy a house, pay the mortgage and taxes

2) Choice 2: rent a house, pay the rent and taxes

Option 3 is to "not live in the area", which is why you get properties that are unsaleable at any price in the US. This is (I think) one of the reasons that some US cities are in such trouble - yes, the original reason for being there has gone, but the property tax means that there is no incentive to go there and re-start a new economy.

Property tax very quickly becomes a tax on "living in an area" in most cases. Of course, there will be a small number of people who live in vast mansions who get whacked, but for the vast majority of people, it simply becomes another tax on living.

In fact, what is called 'white flight' is more probably largly flight from high property taxes. Those who can afford to move do so tand take their taxes with them.

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If you're the sort of person who finds a house by saying "I must live at 2 Mercer Avenue", then yes, you're at the mercy of whoever happens to own it at the time - heck, they might not even be renting it.

The buyer is faced with sellers, none of which can entirely replace each other functionaly, nor can any be replaced from the outside. A similar situation could be constructed if you gave one company a monopoly in work shoes, another a monopoly in wellingtons and another in running shoes. Would you argue that such a situation contains no monopoly component because there is more than one seller of shoes and unless you simply MUST have work boots it makes no odds? No. quite obviously each seller holds some monopoly power and each shoe seller's monopoly supports the other and shoe makers in general can charge monopoly prices.

The thing tripping you up is that as far as location is concerned identity is the same thing as functionality and so an ownership of a location identity translates into actual ownership of possible function itself. A location can nearly be replaced sure - but the problem is that it can only be nearly replaced by a small group of surrounding owners and nobody else . This fact turns that technical monopoly into an economic issue - it appears in price.

Edited by Stars

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No matter what you tax or where you tax it, and the end of the line the end user pays the tax. It can't be any other way. If you take a cab ride you pay the duty and vat on the fuel, you pay the vat on the purchase of the cab, you pay the road tax, you pay the insurance premium tax etc that can be apportioned to that cab ride.

The end user of land would in truth pay a land tax when he pays his rent. The thing is though, he is now paying this tax to his landlord anyway and so there is no cost increase for the user (tenant) from the change to land tax

The important distinction between cab rides and land is that cab rides are produced and made available by human effort and land is not. Land is in fixed supply and not actualy supplied by the efforts of landlords

Edited by Stars

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This is what you don't understand. The Scandinavians have a HUGE welfare bill for their immigrant populations. There are towns full of Middle Easterners who exist on welfare close to a monthly wage.

It is not that something that can be maintained.

The point is, how do you want to achieve equality? From where I'm sitting, white people in London who don't work in finance, are the ones struggling from income inequality more than anybody else.

Don't sit there then. I think white is a broad church. Born in North London mates are North London Geezers, Turks, Bubbles and variations of including some Asian mates we sort of count them as white and they count us in their crowd.

I don't think we believe oursevles to be 'struggling' well we aren't

There will always be winners and losers if you are the wrong side of the line don't blame it on London or your colour.

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There will always be winners and losers if you are the wrong side of the line.

This is what I mean. Equality doesn't exist.

However, why not say that people are generally happier in societies where property speculation is made more difficult by planning laws and protection for renters. Now, there is a trend there. No doubt about it.

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1 The end user of land would in truth pay a land tax when he pays his rent. The thing is though, he is now paying this tax to his landlord anyway and so there is no cost increase for the user (tenant) from the change to land tax

2 The important distinction between cab rides and land is that cab rides are produced and made available by human effort and land is not. Land is in fixed supply and not actualy supplied by the efforts of landlords

1. Landlords will not forgo much of their rent, especially if they were stupid enough to borrow money to buy the property and have to meet monthly costs themselves. Despite thinking LVT is actually a sensible thing, I would expect the imposition of LVT to be an ideal opportunity for landlords *everywhere* to increase rents. There is nothing magic about LVT that prevents it being passed on to the tenant. In individual circumstances it will be a balancing act determined by how much of the tax the landlord can pass on before a tenant decides to go elsewhere.

2. The Dutch might disagree with that. The land may not (usually) be made by the efforts of the landlord but it is certainly secured by them. In turn the landlord's property rights are secured by the State to some degree.(That's why I have come to see some sense in LVT)

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The buyer is faced with sellers, none of which can entirely replace each other functionaly, nor can any be replaced from the outside. A similar situation could be constructed if you gave one company a monopoly in work shoes, another a monopoly in wellingtons and another in running shoes. Would you argue that such a situation contains no monopoly component because there is more than one seller of shoes and unless you simply MUST have work boots it makes no odds? No. quite obviously each seller holds some monopoly power and each shoe seller's monopoly supports the other and shoe makers in general can charge monopoly prices.

Sorry, your analogy doesn't cut it. Take two houses for rent in a street, maybe at different ends. Yes they are different items, but functionally they are the same - they are in a similar location, they have similar facilities. Your position leads to absurdity: Miele have a monopoly over the washing machine market because if you want a Miele, then you have to buy it from them. The fact that loads of people don't buy Mieles suggest that they don't have a monopoly. The same logic would apply to pretty much any good or service out there.

If I had a monopoly over rental, the I could charge what I like, and the inelasticity of price/demand would mean that I get tenants. I could charge £2K a month for a crummy flat, and people would pay it. The fact that I can't do that suggest that there is no monopoly at all.

but the problem is that it can only be nearly replaced by a small group of surrounding owners and nobody else .

In the vast majority of cases the pool is not small, and at the end of the day, the area doesn't have a monopoly either - so there is another pool of owners who can provide very similar services quite easily.

I don't think so. All land already has a use class for planning purposes, with agriculture and forestry being the default. Persimmon could stick some cows on stuff in their land bank. It would either not change the designated use class (so still pony up loads of LVT), or it would, back to agricultural, and Persimmon would lose the ability to build upon it (though they might produce some nice cheese, and not have to pay much LVT),

What you would find is a massive spike in the valuations of land that are currently agricultural but have the potential for future planning. Farmland on the edge of populations would become barkingly expensive as it carried the potential for riches without the tax liability.

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Sorry, your analogy doesn't cut it. Take two houses for rent in a street, maybe at different ends. Yes they are different items, but functionally they are the same - they are in a similar location, they have similar facilities.

And yet not quite identical in terms of functionality, which is why in some areas, houses on one end of street will fetch notably more than the other simply due to location. If what you said were really practically true, such variations couldn't exist and in fact all locations would have the same price.

Your position leads to absurdity: Miele have a monopoly over the washing machine market because if you want a Miele, then you have to buy it from them.

No sorry - only your strawman of my position leads to absurdity

Meile sell washing machines and there is no restriction at all upon who can replace or nearly replace their functionality. For this reason, they have to compete with more or less everyone when they sell a washing machine; this btw, is the free market . The equivalent for real estate would be anyone in the community being legally able to independently offer land at any location. (which is obviously not the case)

If I had a monopoly over rental, the I could charge what I like, and the inelasticity of price/demand would mean that I get tenants.

You could charge the value over and above the best unowned land..as is the case

Edited by Stars

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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