Thursday, October 6, 2011

Merryn Somerset Webb talks some sense on housing and tax

A solution to the housing 'shortage' – put a tax on luck

"If the affluent all moved out of their big houses into small houses and put their second homes on the market, supply would rise and house prices would fall in a flash. Problem solved...I can't see anyone doing this voluntarily (so) it seems entirely reasonable to chuck a few property taxes into the mix."

Posted by greenmind @ 09:14 AM (1868 views)
Please complete the required fields.



15 thoughts on “Merryn Somerset Webb talks some sense on housing and tax

  • One million empty homes, five million people on council housing waiting lists. Also the empty homes aren’t necessarily in places where people want to live and work. There are lots of empty homes in former coal mining towns, but too few to sate demand in London.

    Reply
    Please complete the required fields.



  • The fact of the matter is a large amount of individuals [“trusts”] with either expensive house(s) (£1million plus) and/or a portfolio AVOID both stamp duty and capital gains tax as there have offshore “vehicles” / structures set up which take advantage of the loopholes left for them [purposefully ?]. The “ruling elite” have enjoyed these benefits for decades, and I don’t see legislation changing any time soon [as this
    is set by the establishment too].

    Before any property taxes are let loose on the general population, these loopholes and off-shore vehicles should be closed. LOL.

    Reply
    Please complete the required fields.



  • There must always be some empty homes to facilitate circulation / renovation etc. this counts for roughly half of the 1 million empty homes. Tough measures can and should be taken get the other half million back into use. But this arguement is too often used to distract attention away from the main problem concerning the existing stock: under-occupation, with too many older single people and couples hogging much of the family housing.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    Yay!

    Doomwatch, why bother closing loopholes on inherently stupid taxes like SDLT or CGT? Far better to slap LVT on everything and then we can discuss which other taxes to cut.

    Reply
    Please complete the required fields.



  • MW, much that I’d love to see LVT in my life time, forcing the aristos to flog off their stolen land at rock bottom prices to us proles, I’m guessing that as the bulk of the legal system, a major plank of the establishment, is still fed by public school Toby Jugs, this ain’t gonna happen any time soon.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    I left the following comment over there:

    “You unfortunately made the mistake of confusing “land value tax” with “wealth tax”.

    Nearly all existing taxes are on “wealth” or “wealth creation” (from income tax to inheritance tax), but a tax on land is not a tax on wealth, because land (as distinct from buildings) is not wealth, it is merely a legal mechanism whereby land owners can collect wealth from non-land owners, or enjoy wealth created by society in general and nobody in particular (roads, railways, good state school, a nice view etc).

    Land is no more wealth that the legal entitlement to welfare or pensions, these are not wealth in themselves and are merely a claim on other people’s wealth (via redistributed income tax etc).

    As an acid test, with proper wealth taxes (income tax, inheritance tax) there is never a problem with ‘ability to pay’. Now, the excuse that they always use for not having LVT is that poor widows in mansions wouldn’t be able to afford it, well of course not, because these poor widows aren’t wealthy, they are just lucky.”

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    DW, keep the faith!

    Land taxes were the main source of UK government revenue for centuries, it’s only over the last hundred years or two that these have been quietly phased out. Dave Wetzel has been campaigning for a reinstatement of the old rules for decades, what has he achieved? Not much. I’ll spend the rest of my life mentioning it, what will I achieve? Nothing, probably. So what? They said the same to the anti-slavery people or the suffragettes, look what they achieved.

    Reply
    Please complete the required fields.



  • there are also 1000’s of acres of empty fields doing nothing but giving subsidies to farmers build on this land, get rid of some of the MOD land and build on it, what about building on the 10000’s of acres of land councils own god only knows why councils feel the need to own land and leave it untouched unless it is for the gypsies to move onto

    Reply
    Please complete the required fields.



  • ontheotherhand says:

    MW, keep up the good work, but perhaps it is counter-productive to argue the wealth concepts to ‘beginners’ to LVT on other sites.

    Buying the exclusive right to the benefits of some land costs money and is a store of value and so certainly seems like wealth. Millionaire Greeks are taking their Euros and buying property in London to store their wealth. Owning shares in a company is a call on the future dividends or the value of production of that company. Therefore shares are “merely a legal mechanism whereby…” shareholders can collect wealth from non-shareholders. Does that mean owning a company is not wealth either?
    Perhaps the problem is that ‘wealth’ is a good word to sell an envy tax, but opens the whole movement to the poor widow type bogey?

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    OTOH, I’ve done the argument “land is like any other capital asset” to death, well frankly it isn’t. For a start, shareholder do not collect wealth from non-shareholders. The company as a whole creates wealth (hopefully), and this is shared out somehow between employees, managers, customers, shareholders, suppliers, to the government as taxes etc. Shares are also tricky, because they are INDIRECT owernship of other stuff, machinery, land and buildingss, IP, goodwill etc.

    There will be some elements of those underlying assets which are land (or other government protected monopoly rights) and a lot which aren’t (i.e. true wealth, machines, goodwill, good employees etc). So there’s no point looking at “the shares” you have to look at what’s underneath.

    Reply
    Please complete the required fields.



  • Merryn Somerset Webb is no stranger to LVT – it has been mentioned in MoneyWeek many times over the years.

    There are a lot of good arguments in favour of LVT. The best one to use often depends on your audience. Personally I like the argument that the land belongs to all citizens, and landowners should pay rent to the rest of us. Reference to historical quirks can work too – “Why should the Duke of Westminster own half of London just because his ancestors beat somebody else’s ancestors in battle?” I haven’t found a suitable argument to use on small-C conservatives and monarchists; they all seem to have developed Stockholm syndrome.

    Reply
    Please complete the required fields.



  • ontheotherhand says:

    “For a start, shareholder do not collect wealth from non-shareholders” Hmm. Everyone was going nuts bidding for Motorolla recently for its store of patents. I saw Samsung suing Apple yesterday because every device connection uses a bit of IP owned by Samsung. So every time I make a phone call, or take a non-generic drug, I am a non shareholder paying a shareholder am I not? Now I understand that they created this IP, but it is still a toll booth I can set up as a shareholder to collect from non-shareholders.

    Anyway, I suppose my greater question is why does it matter if people call a valuable monopoly right to a bit of land ‘wealth’? How does making the distinction mean more people will support LVT?

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    OTOH, for sure, there are other government-protected monopolies like patents, copyrights, radio spectrum, cherished number plates, land slots at airports, which are suitable subjects for taxation, clearly the rates for patents (where an individual does the creating and the government does the protecting) would be far lower than on pure monopolies which the owner didn’t create in the first place (and which only exist because the government protects them).

    “why does it matter if people call a valuable monopoly right to a bit of land ‘wealth’?” Because it’s wildly inaccurate, that’s why, and enables the Home-Owner-ists to cloud and confuse the issue. I don’t support taxes on real wealth, or the income generated therefrom in the slightest.

    Reply
    Please complete the required fields.



  • There will always be vacant homes (it’s a bit like the economic concept of “full employment”) and holiday homes should not be scowled at in a free society.

    An assortment of taxes could theoretically force people to shuffle around until every home is optimally filled but that is no solution (it was quite useful in the Blitz).

    People are forgetting that our real problem is a severe shortage of DECENT homes and a lack of choice. The average UK home is disgracefully small by first world standards and most homeowners and renters will tell you that they really need a bigger home. Most homebuyers immediately start saving up for an extension that will obliterate their garden

    There is only one proper solution, which is to build MILLIONS of high quality, decently sized homes so that British people have proper accommodation at an affordable price. Forcing a few vacant homes and holiday homes onto the market is just playing about.

    Reply
    Please complete the required fields.



  • holiday homes should not be scowled at in a free society.

    Why on Earth not? I agree with you on the shortage of decent homes point, but why on Earth, in a free society, should people who have seen their local costal communities decimated by absent holiday home owners, not be entitled to at least scowl at those responsible?

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>