Jump to content
House Price Crash Forum
Sign in to follow this  
@contradevian

London Land Levy Proposal

Recommended Posts

Joe Sarling (@joesarling) has put forward a proposal for a London Land Levy and I thought it might be of interest to HPC forum members

http://commenttoday.org/2015/06/18/the-london-land-levy-a-regional-land-value-tax/

Currently, London boroughs can retain revenue from one and a half taxes – all of council tax and up to 50% of business rates. The revenue this generates is £3.5bn and £3.3bn per annum respectively across all boroughs. To estimate the level at which a levy on land would generate the same revenue, I have calculated the total value of property (private homes at full market value, social homes at 30% of market value, commercial property at full market value at existing use) as a proxy for land cost* – this comes to £1.8 trillion (or £1,800bn).

This therefore means that in order to replace all of council tax and half of business rates, the average levy (charged to the owner) on London land per year is 0.4%. With this, we can scrap one and a half taxes in London.

How about one more stage? Let’s add income tax on to the London Land Levy too. When we do this, we are more comprehensively shifting the burden of tax from earned income to unearned wealth. As it can be seen, we’d need a London Land Levy of under 3% to cover this cost too.

You can also contact Joe on Twitter if you have any comments and suggestions for help move the debate forward

Share this post


Link to post
Share on other sites

Eliminating income tax and shifting all tax onto VAT and land would have a massive shot in the arm effect on the London and SE economy. It might even tempt me back!

Share this post


Link to post
Share on other sites

Who is he and why would politicians (many of whom are landowners and landlords) listen to him? Why would those with vested interests in keeping the cost of land high and housing out of reach for the plebs go for this?

Edited by fru-gal

Share this post


Link to post
Share on other sites

Reducing the tax base to just err landlowners sound so oh so simple.

Watch the powers that be avoid it the simplcity of it though, and dredge up the usual 'granny in her mansion' argument (which could be easily dealt with by the way)

Share this post


Link to post
Share on other sites

It's such a sensible idea that it is unlikely to ever be introduced in these times of greed and corruption. Anything that would benefit the 99% at the expense of the 1% will never see the light of day.

Share this post


Link to post
Share on other sites

Less tax. Less Goverment intervention. Less public sector.

more free market. More money in peoples pockets.

Taxation is the problem not the solution.

So say the neo libertarians, but unless you socialise the rents or have some kind of Zimbabwean land reform, all you have in your neo libertarian utopia is feudalism

Share this post


Link to post
Share on other sites

The Reset group has proposed a 1% transaction tax on BACS and CHAPS transfers. This would raise more than the current 300+ tax laws combined. All taxes could then be scrapped. As it's taken at the point of use there is little chance of tax avoidance. The figures do add up.

As fru-gal said such ideas that are sensible are unlikely to be introduced.

Share this post


Link to post
Share on other sites

The Reset group has proposed a 1% transaction tax on BACS and CHAPS transfers. This would raise more than the current 300+ tax laws combined. All taxes could then be scrapped. As it's taken at the point of use there is little chance of tax avoidance. The figures do add up.

As fru-gal said such ideas that are sensible are unlikely to be introduced.

Its a good idea, but still doesn't 'fix' the problem of land as a means of economic rent capture, which is what creates the inequality of wealth.

Share this post


Link to post
Share on other sites

The Reset group has proposed a 1% transaction tax on BACS and CHAPS transfers. This would raise more than the current 300+ tax laws combined. All taxes could then be scrapped. As it's taken at the point of use there is little chance of tax avoidance. The figures do add up.

As fru-gal said such ideas that are sensible are unlikely to be introduced.

This is interesting. Please can you post a link to the Reset Group and their proposal? Thanks.

Share this post


Link to post
Share on other sites

What happens if the land value falls? What would make up the tax shortfall?

Who values the land, and how often?

And I agree with hotairmail, this has to be a national tax, not a local one, otherwise it will increase local disparity rather than reduce it, leading to even more inequality.

Share this post


Link to post
Share on other sites

One fundamental problem. The proceeds of a Land Value Tax should go to central coffers NOT to the locals.

LVT is partly about taxing unearned gains created from various sources not the responsibility or result of actions by the owner:

1. Access to proximate (commutable) incomes.

2. Local infrastructure and buildings allowed by the community and paid for by others

3. Increases in the money supply created by the community's central bank policy

4. Increase in population created by the community

IT is NOT a local community tax in order to work. It doesn't just replace council tax. It is a national tax looked at in conjunction with other taxes like income tax etc.

Sounds like it is an idea by someone sititng in London thinking how all those lovely head offices, property values and the like could be plundered to improve his own little area and life whilst happily ignoring slum towns and lack of real work outwith the cordon of the M25.

The nature of land has a tendency to create proximate credit bubbles which flood into the local economy making it look far more successful than it really is - lifting revenues and wages in its wake. It is the cycle of this destructive tendency of land that need to be broken and more livable, smaller and more balanced cities created throughout the UK like a Germany or Holland.

Tell @joesarling your concerns please (you are on Twitter). Some LVT'er's have also raised concerned varying the rates by area as they say its self defeating.

Edited by RentierParadisio

Share this post


Link to post
Share on other sites

Except Burnham has recently referred to the mansion tax (or exclusive access user charge on mutually created advantage) as "anti-aspirational" and "spiteful"; the language of rentiers and those who pander to them.

On 'what happens if prices fall' above, the answer depends on whether one's concerned about the State or about the public. The real issue with a LVT for me isn't one of government revenue. Ideally it would replace all work taxation, so if for whatever reason that means the State receives less revenue but average folk keep more (input vs output costs) with greater equality of opportunity that's fine by me. And if time demonstrated that home and landowners need to stump up more in compensation for their mutually ensured rights and protection subsidies then tough because it would reflect market signalling. There are different views, but I'm not very sympathetic to the idea that LVT needs to justify equivalent revenue or that everybody would be financially better off. Not everybody would be, and that's the point - one of efficiency, relative economic burden and greater individual empowerment.

On valuations etc: http://kaalvtn.blogspot.co.uk/p/valuations-and-potential-lvt-receipts.html

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   91 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.