Tag Archives: land value tax

Opinion: The raging south east property boom must be stopped, without harming the rest of the UK

Vince Cable speaking on the BBC’s Andrew Marr show today warned of a ‘raging housing boom’ in the South East where large parts of London could end up inhabited by only ‘foreigners and bankers’ (boroughs such as Camden, Haringey, Hammersmith and Fulham already have an average house price to earnings ratio of over 11).

One solution would be to raise interest rates making borrowing less affordable. But as Vince said today:
“The danger of raising interest rates is that you hit those parts of the country which are not yet fully recovered, you push up the exchange rate …

Posted in Op-eds | Also tagged | 30 Comments

Opinion: Why fear this tax?

Our last Manifesto included a commitment to “reform business rates, creating a fairer system where rates are based on site values rather than rental values. “Site Value Rating” (SVR – a purely local tax) had been party policy for decades but until 2010 never made it to a manifesto. The Party had never embraced a Land Value Tax (LVT) as a key part of our national economic policy.

Since the debt-fuelled property boom led to the present global financial crisis there have been statements in support of LVT from leading figures in all the other parties. Tory Planning Minister Nick …

Posted in Op-eds | 26 Comments

Opinion: Lo-Tax for the Lib Dems

landRaising the tax-free personal allowance is the Lib Dems’ headline contribution to this Government – so popular that the Tories are trying to claim it as theirs! But when Danny Alexander said that our next manifesto should include a promise to raise and peg the personal allowance to the National Minimum Wage (almost £13,000) he was setting his tax policy working group a challenge: to find £12bn a year from elsewhere.

According to the Institute for Fiscal Studies this isn’t progressive. Highest earners and others benefit, while …

Posted in Op-eds | Also tagged and | 38 Comments

Opinion: Land is theft

landIn ‘Why Wealth can’t be Taxed’ it was alleged that a mansion tax is illiberal. However, as a liberal, I am concerned for the state of the property market in the UK. The average age of the first time buyer is now 35.

Housing is a policy that has been forgotten, with health and education becoming the areas of priority. However as liberals, we can address the state of housing through taxation, for I would say that ‘land is theft’. There is too much concentration of power in the hands of the few. Land Value Taxation is a key to addressing this.

Posted in Op-eds | 34 Comments

LDVideo: Introducing the Land Value Tax

The Liberal Democrat campaign for Action on Land Tax and Economic reform has recently released a new video to explain the virtues of a Land Value Tax — described by ALTER as ‘making taxation more progressive and addressing the injustice of economic rent, it would encourage development and boost the economy. It’s the kind of measure that our country is in desperate need of right now.’

Posted in YouTube | Also tagged | 78 Comments

Housing: the IPPR’s answer

Over the last week I’ve highlighted how the Britain’s love of home ownership is not based on any evidence that high home ownership brings economic success (if anything, the opposite is true), that the proportion of people living in private rented accommodation is on a long-term rise and that changes in property prices in Britain are widening rather than narrowing the huge geographic imbalances. Add to all that the increasing importance that Vince Cable and Nick Clegg, in particular, are giving to the housing market for boosting economic growth, and it is a sector clearly in need of action.

But what action?

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Opinion: Land Value Tax – an old idea with lots of modern supporters

Adam Smith in the Wealth of Nations (1776) was an early proponent of land taxes as was that great radical Tom Paine.

John Stuart Mill was an advocate and Henry George put the case in ‘Progress and Poverty’ (1879).

The economist David Ricardo gave us the concept of economic “rent” – that land or property derives its value from scarcity rather than investment.

In the debates before and after the peoples budget of 1909 both Winston Churchill and David Lloyd George argued strongly for the introduction of a land tax.

The economists John Kenneth Galbraith and Milton Friedman recommended Land Value Tax (LVT) for …

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Get your skates on and submit a motion to Liberal Democrat conference about wealth taxes

Nick Clegg’s recent ‘open society’ speech confirmed that increases taxes on wealth in some form is very much on the political agenda. However, the default party policy option – a mansion tax – was highly controversial in the party when it was introduced (which is rather a polite term for the rolling lesson in how to bungle a policy launch, annoy MPs, irritate party members and feed negative stories to the media all in one fell swoop).

In other words – now is a very good time for the party to be debating what form of wealth taxes it favours, especially after the opportunity was missed at the party’s autumn conference. As I wrote at the time in Tax: The missing ingredient from the Liberal Democrat conference agenda,

Posted in Op-eds and Party policy and internal matters | Also tagged , , , , and | 35 Comments

Opinion: Why the mansion tax runs against liberal principles – but a land value tax wouldn’t

One of the more appealing characteristics and strengths of the Liberal Democrats is the room there is within the party for genuine debate, and the freedom members have to hold views which differ from those of the leadership.

There are of course certain principles which all who hold the Liberal banner aloft share however; principles around the freedom of the individual from the unreasonable constraints of the state into their personal lives, and these principles bound us together and make the party the pleasant place to be that it is.

The Liberal tradition goes back to the enlightenment, with figures such as …

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New book: The Case for a New People’s Budget

To many of us, notably Vince Cable, it has for long been blindingly obvious that the property boom would end – and end in pain for millions around the world.

The scale of the crash may have surprised even most who expected something like it at this time, as borrowing against unsecured ‘bubble’ land values was bound to lead to massive default.

However the Lib Dems’ campaign group on land value taxation (LVT) which I chair, ALTER, believes that the ‘Credit Crunch’ can be turned into a major opportunity for the Party, if it can press home its renewed conviction …

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Opinion: The FSA’s mortgage credit proposals v. Land Value Tax

Have you heard about the Financial Services Authority’s ideas for restricting mortgage credit? One is to ban 100% Loan To Value mortgages, and clearly in a time of uncertainty that would be prudent – you don’t want to be in negative equity by the time you collect the keys to your new home. The other is to restrict all mortgages to three times earnings.

You may also have seen a report on the housing market in the Daily Telegraph recently where Edmund Conway canvassed the opinions of four leading economists. The most shockingly bearish response in “Do not pass go – or expect house prices to rise soon” was from Citigroup’s UK Chief Economist, Michael Sanders, who argued that

everything depends on the amount people can borrow. At the moment the average loan to value for first time buyers is 76pc, compared with the more recent norm of 90pc. If LTVs stay where they are, or are regulated by the Government, you’re talking about an even more severe fall. If you want to get the deposit and mortgage burden for a first-time buyer back to the average of the last 35 years with the current level of LTVs, then house prices need to fall another 65pc from their current level.”

So, the act of restricting mortgage credit could provoke a massive write-down in the value of property in order to enable buyers to afford anything. And if there’s no “new blood” coming into the housing market at the bottom end in the form of first time buyers there can be little turnover further up the market.

Now, one of the biggest objections to a significant Land Value Tax has always been the predictable (and intentional) effect it would have of removing the land value from existing property values. Yet the government is now suggesting just such a massive write-down with no compensation to the households that lose out.

With LVT, however, replacing pound for pound as many as possible of the other taxes people currently pay, they would at least be seeing some benefit from their capital loss in the form of abolishing, say, NI, Council Tax, Inheritance Tax, Capital Gains Tax and some at least of their Income Tax.

Further, those of us who campaign for LVT say that switching the tax base away from incomes and trade and onto land values will encourage enterprise, will encourage people to maximize their incomes from work. Just at a time when anyone and everyone actually creating wealth in this country needs every encouragement to continue doing so to help the economy recover.

Longer term it will also prevent the sort of speculative land value bubble we have seen over the last decade from happening again, leading to more economic stability – a much better way of doing so than trying to regulate bubbles out of existence.

There’s one additional, timely, benefit.

Posted in Op-eds | 27 Comments

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