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What Is Wrong With A Land Tax?

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A land tax is often touted on here as one of the solutions to all of our problems.

What are the downsides, what arguments would the VI's put forward to persuade the masses that it is a bad idea, and what counter is there to these arguments?

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A land tax is often touted on here as one of the solutions to all of our problems.

What are the downsides, what arguments would the VI's put forward to persuade the masses that it is a bad idea, and what counter is there to these arguments?

I am not sure the VIs need an argument against it. They probably have a good enough grip on the main parties to assure that the proposal is not even seriously discussed. I guess.

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I am not sure the VIs need an argument against it. They probably have a good enough grip on the main parties to assure that the proposal is not even seriously discussed. I guess.

It is an issue for a significant minority of Lib Dems. They have a whole organisation devoted to it which you might find useful for articles etc. (http://alter.prai.co.uk/index.html)

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It would need non-straightforward adjustment, even as a land value tax, to not massively penalise farmers, owners of sports facilities etc. I would worry that it would also encourage rabbit-hutch housing with no gardens. And there would probably be some clause about royalty not paying it anyway, which would defeat a good chunk of the point of it. Would it end up all that much different from window tax?

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A land tax is often touted on here as one of the solutions to all of our problems.

What are the downsides, what arguments would the VI's put forward to persuade the masses that it is a bad idea, and what counter is there to these arguments?

I think a land tax is a great idea.

The only problem I have with it is how do you value the land correctly? This would be a decision down to an individual somewhere, and that exposes the tax to corruption.

Valuing land is tricky. Say you have a plot of land to build a house on. Easy to value, just hold a sale and see what the price is. But when you have a plot of land, say which the government wants to allow Toyota to build a factory on, what is the value there? Presumably it is more once Toyota have built on it. Would that be fair on them though, as they can hardly move their factory sharpish, so if someone came along and stung them for a big bill for what would otherwise be idle land, they would be upset.

And these sorts of uncertainties would be a deterrant to any potential investor.

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The UK farmers are part of global commodity market. If you tax them, you put them out of business. It is quite possible to close every farm in the UK. If they manage to pass the costs on, which they must, it is every member of the public which pays the tax. Rich and poor alike eat and eat about the same. Thus it in effect becomes a poll tax.

The idea that they have all the land and I have none, therefore tax them is wrong headed. There is no shortage of agricultural land for sale. It is when it obtains planning permission that its value rises a hundred fold. Thus efforts would be better directed into relaxing the planning process to make more land available.

Edited by thod

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These discussions always end up with a list of possible scenarios where land tax might be unfair, or be a problem. But really there is only one question to be asked - overall, is it better than the current tax system? In other words is it cheaper to implement, is it more efficient, is it fairer?

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What are the downsides
It will make some very very wealthy and very very powerful people a lot poorer. You will probably see marshall law and concentration camps for the poor before you see land taxation.
The UK farmers are part of global commodity market. If you tax them, you put them out of business.
Most farmland has a relatively low value and so would attract low taxation, which would be more than offset by the reduction in other taxes the farmer currently pays like income tax, fuel tax etc.

Land tax only has negative effects on people who have land and don't do anything useful with it. Like landlords who leave properties empty.

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In order to keep the farmer farming the tax from his land has to be less than the money he can make from his land - he still needs to be able to make a profit. However, if it's not to become too arbitrary, and hence not really a land value tax at all, the same would have to be true for any other uses of land, so the same people who currently have most of it will keep their grip on it.

Another possible concern is what it would do with derelict land. If you're stuck with some derelict, contaminated land you're going to have a hard time to persuade anyone to buy it from you, and if you put some effort into cleaning it up you'll put its value up and be stuck with a higher tax bill, so you'd need some way of making sure that the cheapest option isn't to grit your teeth and pay the tax on it without making good use of it (or do a runner abroad).

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A land tax is often touted on here as one of the solutions to all of our problems.

What are the downsides, what arguments would the VI's put forward to persuade the masses that it is a bad idea, and what counter is there to these arguments?

As a member of the middle class I am already taxed something like this:

- income tax, NI and council tax .. about 33% of my income

- VAT on the consumables, fuel and alcohol ... another 10% of my income

- I also spend some cash on medical and dental care and my kids education (well perhaps it is my duty .. ???)

- and I have to pay an air travel tax to cut my CO2 emissions .... (OMFG!!!!!)

I would not be very happy at all to pay another tax for my dwelling, which was paid already from my taxed income .... :(

I am still renting so I think that I would pay the land value tax for my landlord .. :(((((((((((((

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As a member of the middle class I am already taxed something like this:

- income tax, NI and council tax .. about 33% of my income

- VAT on the consumables, fuel and alcohol ... another 10% of my income

- I also spend some cash on medical and dental care and my kids education (well perhaps it is my duty .. ???)

- and I have to pay an air travel tax to cut my CO2 emissions .... (OMFG!!!!!)

I would not be very happy at all to pay another tax for my dwelling, which was paid already from my taxed income .... :(

I am still renting so I think that I would pay the land value tax for my landlord .. :(((((((((((((

You might well be better off Damik. You have to remember that if this raised a lot of tax, then other taxes would fall if expenditure remained the same. So some of that tax you mention would be less than it would otherwise be, depending of course of government priorities for reducing other tax.

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What Is Wrong With A Land Tax?

I can tell you exactly why we don't have a land tax, and instead prefer to tax income, spending and buildings...

It's because lots of rich, influential people own loads of land.

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You might well be better off Damik. You have to remember that if this raised a lot of tax, then other taxes would fall if expenditure remained the same. So some of that tax you mention would be less than it would otherwise be, depending of course of government priorities for reducing other tax.

In general I would invite to move taxation from labour to consumption and ownership ...

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A land tax is often touted on here as one of the solutions to all of our problems.

What are the downsides, what arguments would the VI's put forward to persuade the masses that it is a bad idea, and what counter is there to these arguments?

Cos it functions as a wealth tax and the wealthy won't stand for it ... tax on money as it moves around (on income and consumption) are seen as fair, whereas tax on accumulated wealth is seen as unfair (ie cue lots of bleating from older well connected people who have acquired vast piles, 'paid their taxes' and want to 'pass it on to the next generation'.

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In general I would invite to move taxation from labour to consumption and ownership ...

Which is what a land value tax proposes to do.

Taxing consumption instead of labour is something I'm fine with, but I'm not so sure about the principle of taxing ownership. It seems appealing to tax the large land owner's gained-by-sword-a-thousand-years-ago property, but (perhaps too selfishly) it would have to also tax me if I decide to sit on what little I have. It also breaks another idea I hold, and that's if you can somehow manage to be entirely self-sufficient, with no impact on anyone or anything (a practical impossibility, but a useful mental exercise) then the law and the government should be entirely irrelevent to you and you to them.

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1)is it better than the current tax system?

2)In other words is it cheaper to implement,

3)is it more efficient, is it fairer?

1) unless you are proposing to replace all taxes with the land tax, then no it is just another cost that people will have to pay for.

2)Possibly, but I doubt it due to everyone wanting agricultural land different to, manufacturing, to residential, to commercial land.

3) not necessarily more efficient and almost certainly not "Fair" (whatever that means). Why should I be penalised because I was born a farmer?

Don't we already have a land tax? or taxes?

Council tax

Business rates

Farming subsidies (negative tax)

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Because it's a half-arsed idea based on envy and frustration. It doesn't recognise that people who have bought land have done so on the basis that the full expense is capital, it dreams that everyone with land is a Normal robber baron, it fails to grasp the value added to land by producers and it doesn't attempt to replace other tax, it's just another tax on top.

Enough?

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Cos it functions as a wealth tax and the wealthy won't stand for it ... tax on money as it moves around (on income and consumption) are seen as fair, whereas tax on accumulated wealth is seen as unfair (ie cue lots of bleating from older well connected people who have acquired vast piles, 'paid their taxes' and want to 'pass it on to the next generation'.

You spit this out like it's a crime.

Not everyone who has worked hard to acquire wealth did it by being "well connected" you know, sometimes it's just earned.

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I can tell you exactly why we don't have a land tax, and instead prefer to tax income, spending and buildings...

It's because lots of rich, influential people own loads of land.

We have a winner.

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A land tax is often touted on here as one of the solutions to all of our problems.

What are the downsides, what arguments would the VI's put forward to persuade the masses that it is a bad idea, and what counter is there to these arguments?

Why not make an ethically bullet proof argument:

Currently, cheaper properties pay now around 1% of their value annually as Council Tax. But more expensive residential properties pay a lower rate. And then there is a "cap" (top band), and mansions end up paying an insignificant rate. And land don't pay anything, at all.

Why not propose a Property Value Tax of 1%, for all properties? A single rate, no exceptions, no cap.

If the poor can pay that, why not the rich?

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Because it's a half-arsed idea based on envy and frustration. It doesn't recognise that people who have bought land have done so on the basis that the full expense is capital, it dreams that everyone with land is a Normal robber baron, it fails to grasp the value added to land by producers and it doesn't attempt to replace other tax, it's just another tax on top.

Enough?

The major landowners ARE all robber barons, can you tell me who is a "producer" on this list?

THE DUKE OF NORFOLK

DUCHY OF LANCASTER

DURHAM CATHEDRAL

DUCHY OF CORNWALL

http://www.independent.co.uk/news/uk/crime/who-owns-britain-biggest-landowners-agree-to-reveal-scale-of-holdings-443956.html

As for the piffle about just another tax on top? Says who? It's often suggested as an alternative to taxes on labour (income tax), buildings (council tax) or enterprise (corporation tax).

If labour, buildings or machinery and plants are taxed, people are dissuaded from constructive and beneficial activities, and enterprise and efficiency are penalised due to the excessive burden of taxation. This does not apply to Land Tax, which is payable regardless of whether or how well the land is actually used.

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I think a land tax is a great idea.

The only problem I have with it is how do you value the land correctly? This would be a decision down to an individual somewhere, and that exposes the tax to corruption.

Valuing land is tricky. Say you have a plot of land to build a house on. Easy to value, just hold a sale and see what the price is. But when you have a plot of land, say which the government wants to allow Toyota to build a factory on, what is the value there? Presumably it is more once Toyota have built on it. Would that be fair on them though, as they can hardly move their factory sharpish, so if someone came along and stung them for a big bill for what would otherwise be idle land, they would be upset.

And these sorts of uncertainties would be a deterrant to any potential investor.

Simple: Just hire some people to find a solution for the issue, including some research on how other countries do it.

If you want to find solutions, you will. If you want to find obstacles, you will too.

Besides, any possible problem with a Land/Property Value Tax will be much smaller than the problems derived by the absence of a Land/Property Value Tax.

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