Wednesday, September 17, 2008

Reader’s letter of the day

Land behaves differently too

A good argument for Land Value Tax as a way of preventing house price/credit bubbles. By a chap from Lib Dems ALTER group (but let's not hold that against him...)

Posted by mark wadsworth @ 04:46 PM (694 views)
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5 thoughts on “Reader’s letter of the day

  • Mark,

    You might be interested to know that Wadsworth, Ohio, has been voted one of the 25 best places to live for affordable homes (CNN) 😉

    The ALTER group is the Lib Dem splinter group on “Action for Land Taxation and Economic Reform”. Leaving aside the last two words (it’s the nature of opposition parties to propose economic reform), the land taxation group sound fairly reasonable. The real problem is that the Lib Dem old guard are still commited to local income tax, which is a popular policy amongst the asset-rich income-poor elderly voters. The Lib Dems’ main power bases are rural: northern Scotland, Devon & Cornwall, mid-Wales. Those are generally areas with high land/property values and low incomes. I can’t see the LeoparD changing its spots any time soon.

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  • mark wadsworth says:

    Yup. The Lib Dems are totally split on this – the clued up ones from ALTER would replace Council Tax with LVT, the stupid/cynical ones say replace it with local income tax. I guess the stupid/cynical ones have got the upper hand.

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  • I’ve often wondered whether Labour aren’t trying to introduce LVT by stealth. The last decade has seen council tax bills increase well above the rate of inflation, and the Tories accuse them of making the council tax higher in Tory areas, which generally have higher property values. The recent action on commercial property rates points in the same direction too. Admittedly if this is some over-arching plan, they’re making pathetically slow progress.

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  • @drewster . LVT supporters on the left,(there are n’t a lot of them,but they are quite noisy), often wonder the same thing :is Labour introducing some kind of stealth tax version of LVT? Or as they call it LVT-lite or decaffeinated LVT. The Gov. put rates on empty commercial property from last April almost unnoticed and rating of empty RESIDENTIAL property in Northern Ireland is scheduled but unnoticed for next April.They are forever talking about taxes/ rates ( they still call them) on derelict land in NI .(Land has n’t been rated anywhere in the UK since the Thirties.)
    The rating of empty commercial buildings has had a tremendous effect, including demolitions to evade the tax ( of course, putting the rates on the land renders this tired old dodge pointless). The word in NI is that the rating of empty residential property will have a more galvanic effect than the rating of empty commercial property even,so things could get interesting. But I agree, why don’t they go for the real deal?Perhaps the collapse of the commercial property market makes them realise how powerful LVT can be.

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  • Drewster I’ve often wondered whether Labour aren’t trying to introduce LVT by stealth.

    I have it on good authority from my chums on the Labour Land Campaign that Nulab have opposed LVT all the way (the golden opportunity to introduce it would have been in 1997 when land values were very very low, perhaps 10% or 20% of what they are now).

    And the reason they opposed LVT is because LVT keeps land and house prices low and stable. So there would have been no credit/house price bubble to give the illusion of an ever-growing economy or to keep Middle England happy. And because most Labour MPs are second home owners. Who understand nothing about economics.

    So the merry brotherhood of Land Value Taxers (spread across the Green Party, the Labour Land Campaign, LibDems ALTER and a fair few of us in UKIP, but sadly very few Tories) now have a fighting chance of pointing out that this is what happens when you don’t introduce it.

    Our chances of success, realistically … nil? Or a bit less than nil?

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