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October2008

Shifting Taxation From Income To Land

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Has this been mentioned before ?

If we have to be taxed, and obviously we do, then let the government devise a system which does not penalise non-property owners.

Let's forget about fairness, but look at practicality. In the age of globalisation we're going to have to tax that which is immobile. So that means:

- Consumption

- Low and middle incomes (so we'll see flatter income tax)

- LAND

This is why the Tory proposal to remove Inheritance Tax for the middle class (which fell mostly on houses) and tax the non-doms more (mobile and high paid workers) will seem like such an amusing anachronism.

No matter how much they attack the tax havens the days of graduated income taxes and taxes on unearned income (apart from rents) are drawing to a close.

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Has this been mentioned before ?

If we have to be taxed, and obviously we do, then let the government devise a system which does not penalise non-property owners.

Nope. Fairest system is to outlaw thieving.

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From strictly academic viewpoint - taxation of land is the most economically efficient (or rather least econmically inefficient) way of gathering taxes.

All taxes on income or goods and sevices (e.g VAT) are likely to result in distortions in the economy. For example, taxing wages results in some people deciding not to work at the margin. Taxing goods and services results in less consumption than would otherwise be the case.

Taxing land value on a annnual basis is broadly economically neutral providing it falls on the landowner (i.e not on the tenant or as percentage of the rent he pays) since he/she will still be willing to rent out the land regardless of tax levied and the tenant will stil be willing to rent it because it wil not change the rent on the land only teh underlying capital value of the land.

The only case where taxes increase overall economic efficiency are cases of properly adminstered taxes on externalities where martkets fail or 'bads' such as polution or congestion or things that damage our health and well being (e.g booze and tobacco).

I am for land taxes and Samuel Brittan wrote a good short article on the issue a while back in the FT.

http://www.samuelbrittan.co.uk/text234_p.html

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Taxing goods and services results in less consumption than would otherwise be the case.

Which is a good thing.

Taxing land value on a annnual basis is broadly economically neutral providing it falls on the landowner (i.e not on the tenant or as percentage of the rent he pays) since he/she will still be willing to rent out the land regardless of tax levied and the tenant will stil be willing to rent it because it wil not change the rent on the land only teh underlying capital value of the land.

When food stops needing to be grown on land then I will agree with your academic "neutral" theory.

Are you expecting a new generation of benevolent landowners who won't pass on any extra costs to their tenants?

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Let's forget about fairness, but look at practicality. In the age of globalisation we're going to have to tax that which is immobile. So that means:

- Consumption

- Low and middle incomes (so we'll see flatter income tax)

- LAND

This is why the Tory proposal to remove Inheritance Tax for the middle class (which fell mostly on houses) and tax the non-doms more (mobile and high paid workers) will seem like such an amusing anachronism.

No matter how much they attack the tax havens the days of graduated income taxes and taxes on unearned income (apart from rents) are drawing to a close.

"The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest amount of hissing."Jean Baptiste Colbert

In the age of globalisation one has to add on to "hissing" the words "or flying away" quite literally! Personally I lean to consumption taxes - they at least preserve an illusion of freedom. There's a lot you don't HAVE to buy and, assuming the current exemptions apply, anything that encourages people to buy 0% VAT fresh fruit instead of (say) 20% rated chocolate biscuits has to be good news. Those who are old enough to remember Purchase Tax (no-one under 40!) will know there were arrays of rates from 0% on foods to (if memory serves) 37.5% on furs & jewellery.

I'm not saying there aren't difficulties (there was a right bust-up in the Commons in 1959 about how to put 5% on expensive clothes without penalising the poor trying to buy a winter coat, but that is something of an administrative detail which, with today's massive computer capabilities, should not be insurmountable.

It also has the advantage of being much more difficult to evade - sure, there will be "under the counter" deals just as there are now with cigarettes, but with £1 in every 7 being spent in Tescos, plus whatever proportion in other big stores it's going to catch the vast majority of purchases.

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That's already against the law. Tax isn't theft, nor's property.

Theft is theft. It's determined by checking against reality, not law.

Taxes are theft. Get over it.

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When you use the NHS are you thieving and if you are, whom are you thieving from?

But I'd rather not use the NHS. I'd rather keep my wages with no NI or income tax taken from them and then spend them on a health service that I choose.

PS If I had a choice, I would almost certainly not choose a health service that wasted £3.5 billion on failed IT projects in the last 4 years alone, and where the wards are filthy and cultivating MRSA

Edited by InternationalRockSuperstar

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When you use the NHS are you thieving and if you are, whom are you thieving from?

Yes you are thieving and it's from whoever was stolen from to get the resources to give you.

Now, I have sympathy with the view that some theft might be needed to balance the scales of inequality or whatever, but let's have it right. It's theft. It might be overall beneficial theft, it might be a good thing overall, but it's theft.

It's taking from one man against his will to give to someone else. This is theft.

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But I'd rather not use the NHS. I'd rather keep my wages with no NI or income tax taken from them and then spend them on a health service that I choose.

PS If I had a choice, I would almost certainly not choose a health service that wasted £3.5 billion on failed IT projects in the last 4 years alone, and where the wards are filthy and cultivating MRSA

You've a point there it has to be said. I have been having a similar debate re the waste of space so much IT is (unless its free).

But you would still have to rely on a free market organisation which would only target profitable areas of healthcare. Who would do the unprofitable stuff?

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Now, I have sympathy with the view that some theft might be needed to balance the scales of inequality or whatever, but let's have it right. It's theft. It might be overall beneficial theft, it might be a good thing overall, but it's theft.

When is a universal free at the point of use NHS not theft? Or to put it another way how do you provide such an institution without theft?

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When is a universal free at the point of use NHS not theft? Or to put it another way how do you provide such an institution without theft?

You don't and why would you?

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You've a point there it has to be said. I have been having a similar debate re the waste of space so much IT is (unless its free).

But you would still have to rely on a free market organisation which would only target profitable areas of healthcare. Who would do the unprofitable stuff?

But what is the TRUE COST of the NHS providing unprofitable work?

It must surely destroy wealth somewhere else in the economy. Intervening in the free market always destroys wealth.

Besides, any medical procedure will be profitable if the sales price is higher than the costs.

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  • 296 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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