Friday, Sep 25, 2015

Can the new left tackle the Housing Crisis with a Land Value Tax

Gruaniad: Why Labour must become the party of home ownership

This young chap is making waves in left wing politics and by saying New New Labour should build a lot more Houses and Introduce a Land Value Tax. Interesting I shared a platform with him last year and mentioned it to him.... Did not seam that interested at the time but he has obviously been looking into it. I am sure having the new Shadow Chancellor and a few other corbynites who are up for a Land Value Tax does not hurt either. Interesting times if they ever get a majority.

Posted by pete green @ 05:45 PM (3955 views)
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10 Comments

1. clockslinger said...

"Stamp duty is a regressive tax: why not abolish it, and replace both council tax and stamp duty with a land value tax instead"

No Owen, why not keep it but make the vendor pay it.
Then introduce a very progressive scale of council tax
And THEN introduce land value tax AS WELL.

Well, you are serious about sorting it out, aren't you?

Friday, September 25, 2015 06:30PM Report Comment
 

2. icarus said...

Radical LVT proponents see it as a 'single tax', sufficient to meet all government revenue requirements and thus obviating the need for other taxes. Its main benefit is that unlike most other taxes it's unavoidable. If vendors paid stamp duty they would increase asking prices accordingly.

Friday, September 25, 2015 08:02PM Report Comment
 

3. libertas said...

Replace stamp duty with capital gains tax, that first time buyers DO NOT PAY, but like USA let home owners off-set the tax against interest payments and home improvement spend. This is equivalent to a land value tax without taxing people before they have made any capital gain, and a tax that will not price pensioners out of their homes.

Friday, September 25, 2015 09:40PM Report Comment
 

4. i remember the 90`s said...

I agree with libertas on this ,there I said it help me arggggg.lol

Saturday, September 26, 2015 07:51AM Report Comment
 

5. pete green said...

The problems of capital gains tax are that the 'paper' profits may be nothing more than that due to the effects of inflation on all prices. Some of the paper profit is inflation and some is profit. It is also the case that the capital gain may be the result of improvements and investment in maintenance etc. The real work done by home owners is worthy of the full reward for their efforts. It may, however, be that the capital gain is an increase in the selling price of the land element of the asset that is being traded such as or say a new high speed rail link put in at vast taxpayer expense, or the hard work of neighbours, not yours.

This is one of the many fundamental flaws of a Capital Gains tax which is expensive and difficult to administer as opposed to a land value tax which is simple and effective. So governments should collect the rental value of the land as their primary source of revenue.

Capital gains taxes are poor at solving speculative trading our in assets in high value areas such as cities in which those assets value is largely the value of the land.

"Anyone advocating that property sales should be subject to capital gains tax should take note of the situation in Sweden. Elderly people who bought houses in inexpensive areas in the 1970s now find that those neighbourhoods have become desirable and very expensive. If they sell, they are liable for a big capital gains tax bill, leaving them with insufficient to buy somewhere else. They are caught in a tax trap. Their only option is to stay put, reluctantly, in unsuitable property, thereby causing a shortage for those who would actually like to live there."

Saturday, September 26, 2015 08:55AM Report Comment
 

6. icarus said...

@3 - LVT does not "tax people before they have made a capital gain". A purchaser of land/property has already allowed for the tax and has therefore paid that much less, as in buying a leasehold and taking into account that you have to pay rent to a head landlord. The tax is capitalised/amortised in a reduced market price for the land. Besides, liability to LVT is offset by not paying income and corporation tax and VAT etc. if LVT is indeed a single tax.

Saturday, September 26, 2015 09:24AM Report Comment
 

7. cyril said...

I don't think any politician is going to upset the housing applecart - I think we will just have to wait for it to self destruct on its own and hope it doesn't bring everything else down with it.
As far as I can see, nobody even talks about tweaking council tax bands or revaluing houses to take account of improvements. It's political suicide.

Saturday, September 26, 2015 09:48AM Report Comment
 

8. Benjiiiiiii said...

As all taxes lower rental income and selling prices they are all "land taxes". They only differ in their distributional fairness hence their efficiency. It is therefore not only fair but optimally efficient to tax land directly(landowners) instead of indirectly via the producers of capital. Infact doing the way we have chosen is sort of insane as it benefits no one, and greatly harms everyone. And yes, that even includes the likes of the Duke of Westminster who consequently has to live in an (relatively) impoverished and excessively unequal society with the mountain of bulls**t that goes with it.

What idiots like Owen Jones don't realise is that in order to achieve his egalitarian goals, he need never argue on grounds of inequality. He need only ever cite efficiency as his aim.

Very lucky for the wealthy elite that people like Jones want to tax the incomes and capital of the rich, simply because they are rich. Easy to dismiss on grounds of envy and penalising wealth creators.

Not so a LVT, which as a replacement for taxes on output results in the elimination of numerous sources of deadweight losses, resulting in optimal economic efficiency. And the tax liabilities of the top 1% rising by tens of billions.

Saturday, September 26, 2015 10:10PM Report Comment
 

9. libertas said...

Yes, Pete Green, but many people pay stamp duty not even on paper profits, and yes, it is all paper, or digits, unless you come up with a parallel currency, that is the world we live in I am afraid. No amount of fiscal diddling will alter that, even a land value tax.

Sunday, September 27, 2015 09:06PM Report Comment
 

10. nickb said...

Hats off Libertas, the absurd non-sequiteur elevated to an art form!

Thursday, October 1, 2015 08:54AM Report Comment
 

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