Monday, September 13, 2010

We own property – protect us from taxation!

Lib Dems risk Tory rift with 'soak the rich' land value tax

The reactionary middle-class baby-boomer vitriol in the comments is breathtakingly simple-minded.

Posted by paul @ 08:25 AM (2362 views)
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26 thoughts on “We own property – protect us from taxation!

  • The reactionary middle-class baby-boomer vitriol in the comments is breathtakingly simple-minded.

    Do not vote TORY for low house prices.

    {New Labour are proven Facists.}

    Vote Lib Dem for a return to FAIR house prices?

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  • If you want to appreciate just how much this idea is hated in the UK, look at the ‘Worst Rated’ comments underneath the article. This is the worst rated of the lot:

    Great idea and about time too. There are too many people and companies just sitting on land when it should be used. Look at supermarkets buying and property developers buying land only to never build on it and then there is the biggest issue, empty housing.

    When there is a whole generation priced out of the housing market, using taxes to encourage proper use of land can only be seen as a good thing. (Rating -93)

    Is it really any mystery that LVT never gets a mention in the mainstream press with this kind of irrational and selfish boomer attitude?

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  • “Senior Tory MP John Redwood last night condemned the idea of a land-value tax as a ‘dagger at the heart of property values’. ”

    But I thought the tories are all cute little fluffy bunnies who want house prices to correct downwards.

    “If you attack the rich to distribute wealth to the poor you destroy the country’s ability to generate work. I have a large house set in 4 acres which I paid for out of my earnings. I wasn’t left it and I worked up to 16 hours a day to afford it. Why should I pay extra taxes to fund the lifestyle of a generation of people who are too lazy to get off their rear ends and go and improve their life. House prices may be expensive but they will never get any cheaper, they will continue to rise in price and nothing will change that short of a total desolation of the world population. ”

    Knobhead

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  • The LibDems do like to dance with the fairies when they have their party conferences..

    Yes Paul, the idea finds very little support amongst the electorate who take the trouble to vote; and for that reason, it will never happen..

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  • The last MP who tried to pass LVT was WInston Churchill and he was defeated by the Tory party. That’s how unpopular an idea it is/was. It’s also an indicator of how good an idea it is. Pity good ideas are often the ones the sheep like least. John Redwood is a clown, this country is never going to improve while we still have this latent landed gentry class able to force their choices on everyone. Redwood is effectively calling everyone who doesn’t own property with a few acres lazy. If there was a competent opposition in this country this would a knife to stick into the coalition governments plans. As it it they good ideas will always be sabotaged by selfish greedy gits like Redwood.

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  • This sums it up nicely, taken from http://www.amazon.co.uk/Owns-Britain-Ireland-Kevin-Cahill/dp/1841953105

    “For Britain, Cahill analyses this landownership, showing how a tiny minority exploits British society. 160,000 families, 0.3% of the population, own 37 million acres, two thirds of Britain, 230 acres each. Just 1,252 of them own 57% of Scotland. They pay no land tax. Instead every government gives them £2.3 billion a year and the EU gives them a further £2 billion. Each family gets £26,875.

    By contrast, 57.5 million of us pay £10 billion a year in council tax, a land tax, £550 per household. We live in 24 million homes on about four million acres. 65% of homes are privately owned, so 16 million of us own just 2.8 million acres, an average 0.18 acres each.

    The top landowners are the Forestry Commission, 2.6 million acres, the Ministry of Defence 750,000, the royal family 670,000 (including the Crown Estate 400,000 and the Duchy of Cornwall 141,000), the National Trust 550,000, insurance companies 500,000, the utility companies 500,000, the Duke of Buccleuch 270,700, the National Trust for Scotland 176,287, the Dukedom of Atholl 148,000, the Duke of Westminster 140,000 and the Church of England 135,000.

    The Forestry Commission, Britain’s biggest single landowner, runs its holdings conservatively and secretively. We could expand the forest estate by a million acres a year, producing rural jobs, getting profits from the sale of wood and pulp (cutting our balance of payments deficit) and reducing the output of greenhouse gases. This would cost between £588 million and £750 million.

    Through the 18th century enclosures, the landowning class stole eight million acres from the people. They still hide their crimes and their takings. The 1872 Return of Owners of Land was made, but then hidden and never updated. Shares have to be registered; land doesn’t. The Land Registry does not know who owns between 30 and 50% of land.

    Cahill compares Britain with other countries where revolutions have ended the feudal tenure of land. Denmark redistributed its land to the peasantry in 1800. In Ireland, in 1876, 616 landowners owned 80% of the country. By 1930, 13 million acres of Ireland’s 20 million acres had been sold to owner-occupiers. Now, there are no landlords – home ownership is 82%, Ireland’s 149,500 farms are 97% owner-occupied and owner-farmed, there is no poll tax, water is free and pensioners get free transport, TV and glasses.

    Cahill claims that Blair’s reform of the House of Lords “definitively cut the permanent link between power and the landowners.” But just as in 1872, the state is defending landed capital by making it less visible. Class power does not depend on sitting in the House of Lords, but on private ownership of the means of production, protected and subsidised by a capitalist state. The Greens, like the heritage lobby, shield the landowners against public ownership of the land.

    The Department for Environment, Food and Rural Affairs says its mission is to shift EU subsidies from food production to land management, but the EU already does this, with its £2 billion annual subsidy to the landowners, not to working farmers. We need to produce our own food: food production is in our national strategic interest. It is a national security issue that must not be determined either by the EU or by the market.

    Landowners’ wealth is a parasite on Britain, the least productive part of the economy, with the most state support. Their wealth comes not from farming, nor even from renting, but from trickling land onto the urban housing market. They sell land to property developers, at an average price per acre of £404,000 in 1999. The clearing banks and building societies strip our industries of investment capital, then support their clients the landowners by running the rigged and overpriced land market.

    Britain needs land reform. “Windfall gains on development land should be made subject to windfall taxes.” We should also tax land and stop the owners avoiding tax through offshore trusts; this could raise £17 billion. The European Convention of Human Rights says there should be no confiscation without compensation. Haven’t landowners had enough compensation already? We need more land for housing. This would cut land prices, free more to invest in good quality, spacious homes and gardens, and revive the building industry.”

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  • phdinbubbles @2. It’s about time people realised once and for all the Tories represent the political wing of the land owner minority.

    Anybody who thinks otherwise is a foolish slave.

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  • The comments have disppeared…

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  • LVT has nothing to do with “rich” versus “poor” or “wealth creators” versus “scroungers”.

    I have ground the figures.

    IF went the whole hog and replaced ALL taxes (apart from duties on petrol, booze fags) with LVT (which would average out at about 8% of property values, whether residential or commercial) (with exemptions for pensioners so that it is a reasonably close match for income tax, and I can’t even be bothered with LVT on farm land)

    THEN the maths is quite simple:

    IF the current value of the home you occupy is less than six times your households gross earned income (including salariy, profits, dividends, interest – that’s all earned) then you would be better off from day one. IF your ratio is above seven, you would be worse off. Between six and seven is not much difference.

    ENDIF.

    So comparing like with like, everybody will be paying much the same tax as their immediate neighbours (excluding pensioners). So all things being equal, it will favour higher earners and increase tax burden on lower earners. We can smoothe this out a bit with more universal cash benefits (hooray for Citizen’s Income and a bit of sensible, non-distoritinoary redistribution), but all things being equal, this would encourage hard work, entrepreneuship, wealth creation etc etc…

    A very high earner in a £1 million house who earns (say) £150,000 or more gross would be better off than before. A low earning couple earning £30,000 between them in an average £170,000 house would be better off, and so on.

    Also, I second what John Redwood said. Let’s kill off house price bubbles once and for all using the LVT “dagger” 🙂

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  • There are a couple of things the government has to worry about when it comes to taxing the rich.

    In times of high inflation and high interest rates and yields, the 50% tax on income is pretty handy. Right now the inland revenue must be missing the tax on all assets,

    The other is that every international multimillionaire wants a house in London because it is untaxed, it is stable (think the Greeks and Russians), and the currency is a hedge. When they come to sell the house, there is no witholding tax unlike other global centres. i.e. the UK does not ‘withold’ the tax on the unearned capital gain until they prove they have paid tax in their own country. It’s up to them to declare it honestly when they get home.

    If the Libdems were to sell this tax to the public then they should talk about offsetting. It does sound pretty relentless to be taxed as you earn, taxed on your retained assets, and taxed on anthing left when you die. How about reducing one of the other taxes to offset some of the LVT? They could also make the LVT progressive, and hopefully regional. I’m sick of being classed as rich because my London wage is higher than the national average, but all the extra buys is parking and a sandwich.

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  • @ Doomwatch: “The Land Registry does not know who owns between 30 and 50% of land.”

    This is misleading. HMLR does not record or publish this info, but these large agricultural landowners all have their land registered with the Rural Land Register which is a requirement before you can get your hands on your share of those lovely £4.3 billion agricultural subsidies 🙂

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  • the number cruncher says:

    The daily mail are just a mouthpiece of the Tories and are demonstrating just how the average hard working man is in servitude to the rich. LVT is the only option that will free the common man to enjoy the fruits of his hard work.

    Its a shame most people are to stupid to realise it.

    The landowning squiurarchy of f the Tory party are very much aware of its affects and that is why they will campaign so vehemently against it.

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  • You will never get radical tax reform in this country for a very simple reason:

    Every tax reform has its winners and losers. The winners keep schtum and never say thankyou, while the losers scream blue murder.

    Any tax change that creates a significant number of losers causes uproar – think about the poll tax (actually quite a good idea, but disastrously introduced) or that storm in a teacup over the 10p tax band..

    One can theorise about radical tax reform until the cows come home, but no government will ever introduce it.

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  • UT: “Every tax reform has its winners and losers. The winners keep schtum and never say thankyou, while the losers scream blue murder.”

    Yup. But we live in a democracy, don’t we? If a tax reform benefits at least two-thirds of the population, as well as boosting the economy overall, why wouldn’t we vote for it?

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  • phdinbubbles @2

    I would like to give John Redwood the benefit of the doubt that he does want a correction in “property values” but via the slow process of erosion by inflation rather than a cliff edge .

    This is what he stated on his blog but with him being a politician one never knows whether he really means what he says .

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  • It’s a win-win in my take. Extra tax on the swathes of land “owed” [stolen] by the “gentry”, which will ultimately
    force them to release lots more for development of decent sized family homes, with decent sized gardens, instead
    of these horrible “town houses” with postage stamp gardens we have seen over recent years. The only losers would be 0.3%
    of the population, so what’s the big issue folks. If they don’t like it, they could f00k off to the Bahamas to go live
    with their off shore trusts.

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  • sibley's b'stard child says:

    The comments below the article remind me of the Question Time election special hosted in New York (I think), I forget the absolute details but I believe they were discussing Obama’s planned introduction of a tax on the rich which would only affect the top 5% of earners. Every single member of the audience were vehemently opposed to this taxation claiming it was socialism and against ‘the american way’ (my words). I remember thinking, I doubt any of you even come close to earning the requisite salary in order to be effected by this taxation, and it’d be used to help the poorest in US society, so what’s the problem?

    Same with these reactionary, closed-minded f*ck-wits. I doubt the super-rich would even deign to wipe their derrieres with this rag. Aspirational, pseudo-middle classes who do the bidding of the true landed gentry without even realising it.

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  • “If a tax reform benefits at least two-thirds of the population, as well as boosting the economy overall, why wouldn’t we vote for it?”

    Because the losers have a louder voice, and the electorate are very averse to inflicting hardship upon those whom they perceive as having done nothing wrong.

    The electorate can be very frustrating for those who have grand designs for their welfare, and from time to time politicians believe they know better than their electors..

    But to quote Churchill:

    “It has been said that democracy is the worst form of government except all the others that have been tried”

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  • @MarkW,

    That is very good – you have eventually start to produce information about who are the winner and who are the loser of the LVT. That is a good start.

    And yup, shifting from taxation of labour to capital is what is needed to reform the economy. However all these mainstream LVT proposal seemed to be talking about additional tax rather than replacement tax – which is not good.

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  • EBM, the winners/losers debate is as simple as that. If you have a high income-to-home value ratio, you win; if you have a high how value-to-income ratio you lose. I guess the cut off is about six-and-a-half. End of. These are of course static losses – if you own a second home, you can sort this out quite easily by selling it. If you have a house with a massive garden, then sub-divide your plot and build another one and sell it off or let it out. If your tax bill goes up, you can trade down, sublet a room, find a better paying job (which will be much easier once income tax etc are scrapped), all of these seem to be Good Things to me (but I might be wrong).

    PS, LVT is not a tax on “capital” generally (as this would be just disguised income tax), it is a tax on “land values”. There is no more to it than that.

    Completely agree on replacement/additional taxes of course. I like the way that John Redwood slags off the idea of “higher taxes” when it was his own government who just hiked VAT from 17.5% to 20%, claiming it would raise £11 billion a year (which is like increasing council tax by half!!).

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  • In a tiny village on the Irish coast lived an old lady, a virgin and very proud of it.

    Sensing that her final days were rapidly approaching, and desiring to make sure everything was in proper order when she died, she went to the town’s undertaker (who also happened to be the local postal clerk) to make proper ‘final’ arrangements. As a last wish, she informed the undertaker

    that she wanted the following inscription engraved on her tombstone:
    ‘BORN A VIRGIN, LIVED AS A VIRGIN, DIED A VIRGIN’

    Not long after, the old maid died peacefully.

    A few days after the funeral, as the undertaker– postal clerk went to prepare the tombstone that the lady had requested, it became quite apparent that the tombstone that she had selected was much too small for the wording that she had chosen He thought long and hard about how he could fulfil the old maid’s final request, considering the very limited space available on the small piece of stone.
    For days, he agonized over the dilemma. But finally his experience as a postal worker allowed him to come up with what he thought was the appropriate solution to the problem.

    The virgin’s tombstone was finally completed and duly engraved, and it read as follows:

    ‘RETURNED UNOPENED’

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  • When the country is full of house owners who cheerfully agree that they coldn’t possibly afford the house they are living in if they had to buy it today, a dagger at the heart of property values is frankly what we need.

    I’d like to ask the man with a large house and four acres how much he paid for it and what it is worth now – probably several times what he paid. Then he can explain to me why he thinks that that huge wodge of unearned wealth deserves to remain tax-free.

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  • mark wadsworth says:

    Si, comment 8. the comments are still there. We can wind them up a bit by selecting the “worst” comments and giving them all a tick in the “agree” box- the system works on “agrees” minus “disagrees” so it a hundred or two of us click, then they might become the “best” comments.

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  • 18. uncle tom said….But to quote Churchill:

    “It has been said that democracy is the worst form of government except all the others that have been tried”

    -The failing of Democracy, as with all others, is due to a brainwashed society.

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  • 3. phdinbubbles said…”Senior Tory MP John Redwood last night condemned the idea of a land-value tax as a ‘dagger at the heart of property values’. ”

    But I thought the tories are all cute little fluffy bunnies who want house prices to correct downwards.

    “If you attack the rich to distribute wealth to the poor you destroy the country’s ability to generate work. I have a large house set in 4 acres which I paid for out of my earnings. I wasn’t left it and I worked up to 16 hours a day to afford it. Why should I pay extra taxes to fund the lifestyle of a generation of people who are too lazy to get off their rear ends and go and improve their life. House prices may be expensive but they will never get any cheaper, they will continue to rise in price and nothing will change that short of a total desolation of the world population. ”

    You tell em bro! You missed out, or a huge ‘bank’ run. 🙂

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  • 7. doomwatch said…phdinbubbles @2. It’s about time people realised once and for all the Tories represent the political wing of the land owner minority.

    “Anybody who thinks otherwise is a foolish slave.”

    We were born into slavery when our mothers signed us over.. Check out Jordon Maxwell re- birth certificates.

    “I am not a number, I am a free man”

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