New members have been asking about Lib Dem organisations that they can join. You are welcome to submit similar items on behalf of other organisations.
Do you think we should tax wealth rather than work? That regressive taxes like Council Tax should be replaced with a progressive tax on landowners instead? Do you agree with the Institute for Fiscal Studies’ Mirrlees Review that “the economic case for taxing land itself is very strong”?
If so, have you considered joining ALTER?
Last week, new member Simon Gilbert wrote a piece in which he described himself as a Georgist and declared his support for the land tax. Feeling like we had discovered one of our own, ALTER contacted the LDV team, asking them to introduce us to Simon.
The LDV team not only passed our message to Simon, (who has since joined us) but also invited us to introduce ourselves more widely to the LDV readership. So this is a short piece to introduce who we are, what we stand for, what we’re trying to achieve, and why you may wish to join us!
ALTER – Action for Land Tax and Economic Reform
ALTER is an Associated Organisation within the Lib Dems that focuses on economic reform, with particular focus on the land value tax. The land value tax is a long time Liberal policy, the one that led to the showdown between Lloyd George and the Tory House of Lords with the People’s Budget in 1909. On our website there is a selection of articles that explain the benefits.
The three key points would be:
- Progressiveness – Wealth inequality in this country is far greater than income inequality, and much of this wealth is land ownership. As a result, a land value tax would be even more progressive than income tax.
- Fairness – One of the arguments for the fairness of LVT is that it’s a tax on “unearned wealth”.Whereas buildings and other improvements on land require expenditure to maintain their value, the value of unimproved land is due to the value of its location. This location value is largely determined by infrastructure, services, communities and other amenities around it, rather than the work or investment by the landowner.The land value tax can therefore be seen as society taking a little back from the value it adds to the property.
- Economic Efficiency – Income tax is great for raising revenue, but is often accused of dis-incentivising economic activity. The land value tax does the opposite. Compared to business rates that punish landowners for improving their premises, the land value tax is charged purely on the location value, so incentivises landowners to develop and get the best out of their site. The tax will act as a strong disincentive to land banking as well as encouraging owners of derelict buildings and brownfield sites to either develop them or to dispose of them at a fair price to others who will do so.As such, the land value tax is a popular policy with a wide range of economic thinkers, ranging from those with environmental concerns who wish to maximise use of brownfield sites, to right wing economists like Milton Friedman who described LVT as the “least bad tax”.
What we do
The key aim of ALTER is to promote the land tax within the party. This means engaging with both grassroots members and parliamentarians to foster wide support across the party. Some of the actions taken by ALTER include:
- Running stalls and fringe events at a range of Party events such as Federal. Regional and SLF conferences.
- Running conferences of our own where we have invited speakers in to speak on issues including the land value tax, on banking and the financial crisis, and also on housebuilding and planning.
- Put together a number of educational materials, including dozens of leaflets, a book with a foreword by Vince Cable, a video that explains the Land Value Tax and we have also contributed towards a non-party documentary called The Taxing Question of Land.
- We have put forward pro Land Value Tax motions and amendments at conference debates where we have won near unanimous support from voting reps from all “wings” of the party.
- We have also engaged with parliamentarians and the manifesto working party and in 2015 achieved the first manifesto commitment towards implementation of a full land value tax.
Wish to Help us?
Like all groups within the Lib Dems, we are a member based organisation. We rely on our members’ support to do what we do, whether through volunteer work, funding or just showing support.
We are also looking to broaden our scope from just land value tax to other areas of economic reform, such as banking and monetary policy. Members will play a key role in that discussion.
Whether you’d just like to offer your support, or to join and help shape us, we would be pleased to welcome you.
We also have a Facebook Page and Twitter Feed where you can keep up with our activities.
Should you ever see our stall at a conference, please stop by – we’d love to chat!
* Daniel Henry is a member in Leicester.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Market Harborough goes bananas on Carnival day
You have no idea if the Spending Review boosted growth
Developing your new business pipeline
Weekly Road Report - West End Ward #dundeewestend
Wales set to lose most from disabled benefit cuts
Thelma Davies
Simon R
Suzanne Fletcher
Cassie
Nonconformistradical
33 Comments
I really like the concept of land tax based on the geolibertarian model. One of the big draws of the Lib Dems for me.
All good stuff.
I don’t agree with the land value tax. I think it punishes people who have bought land for no good reason. Personally I would prefer a net-asset tax with personal valuables such as jewellery and paintings excluded. I don’t want the tax officials snooping around people’s houses.
Regards
‘I think it punishes people who have bought land for no good reason.’
Surely the point of an LVT is that it might be your land, but it isn’t your fief. Unless you are a royal I suppose.
There is, of course, nothing to prevent people selling land if they don’t like the tax liability.
“I don’t want the tax officials snooping around people’s houses.”
Which is why a land tax is a good idea, Eddie (well, it’s one reason) — they don’t need to snoop around your house at all in order to value your land. That’s not so true of Council Tax and definitely wouldn’t be true of the nightmare of a general wealth tax (which I rather suspect you’d end up describing as punishing people who had savings for no good reason…).
No Malcolm, my point is that the same amount of money could raised from a net asset tax, which would include a land tax, but it would be spread among a wider base, so I think it would be fairer.
I don’t think it would be terribly hard to calculate. A lot of assets are valued electronically and a simple balance sheet can make up the ones that aren’t. It would only apply to millionaires. Some rich people seem to go around advertising their net worth anyway.
Regards
PS, it could even raise more than a land value tax. I just think when some rich people are targeted for taxes and others aren’t then it fuels a sense of resentment, a bit like the mansion tax, but not as bad.
I’m in no way rich by the way, I’m just trying to help develop the best policy.
Dear Eddie, with a place to live and the work of your body and mind you always have hope. I would prefer people hold shares, intellectual property and Picasso paintings rather than land. Currently it is cheaper for a Chinese businessman or Russian olygarch to hold their wealth as empty central London property rather than gold or productive assets. This impacts on the freedoms, quality of life and aspirations of all the UK population. A LVT will encourage the best use of land for all, without the economic impact on the poor that result from all other taxes.
Eddie, sorry to pitch in as well contra your point, but the key point here is “rent”. The “Law of Rent” explained 200 years ago by David Ricardo (and largely elided from economic history by Marx and Marshall simply because they both thought that an urbanising population made land a much smaller issue for an economy – but who were both wrong) shows that all these other taxes ultimately come out of the economic rent of land.
It is about economic justice. The value in locations is created by all of us, communally. Not so with most “wealth” – I refuse to call land value “wealth” since it is not something generated by the thing – the location – itself but by others making it a popular and productive area.
Churchill compared land and other forms of income/wealth thusly:
“Nothing is more amusing than to watch the efforts of our monopolist opponents to prove that other forms of property and increment are exactly the same and are similar in all respects to the unearned increment in land. They talk to us of the increased profits of a doctor or a lawyer from the growth of population in the towns in which they live. They talk to us of the profits of a railway through a greater degree of wealth and activity in the districts through which it runs. They tell us of the profits which are derived from a rise in stocks and shares, and even of those which [321]are sometimes derived from the sale of pictures and works of art, and they ask us—as if it were their only complaint—”Ought not all these other forms to be taxed too?”
“But see how misleading and false all these analogies are. The windfalls which people with artistic gifts are able from time to time to derive from the sale of a picture—from a Vandyke or a Holbein—may here and there be very considerable. But pictures do not get in anybody’s way. They do not lay a toll on anybody’s labour; they do not touch enterprise and production at any point; they do not affect any of those creative processes upon which the material well-being of millions depends. And if a rise in stocks and shares confers profits on the fortunate holders far beyond what they expected, or, indeed, deserved, nevertheless, that profit has not been reaped by withholding from the community the land which it needs, but, on the contrary, apart from mere gambling, it has been reaped by supplying industry with the capital without which it could not be carried on.
“If the railway makes greater profits, it is usually because it carries more goods and more passengers. If a doctor or a lawyer enjoys a better practice, it is because the [322]doctor attends more patients and more exacting patients, and because the lawyer pleads more suits in the courts and more important suits. At every stage the doctor or the lawyer is giving service in return for his fees; and if the service is too poor or the fees are too high, other doctors and other lawyers can come freely into competition. There is constant service, there is constant competition; there is no monopoly, there is no injury to the public interest, there is no impediment to the general progress.
“Fancy comparing these healthy processes with the enrichment which comes to the landlord who happens to own a plot of land on the outskirts or at the centre of one of our great cities, who watches the busy population around him making the city larger, richer, more convenient, more famous every day, and all the while sits still and does nothing! Roads are made, streets are made, railway services are improved, electric light turns night into day, electric trams glide swiftly to and fro, water is brought from reservoirs a hundred miles off in the mountains—and all the while the landlord sits still. Every one of those improvements is effected by the labour and at the cost of other people. Many of the most important [323]are effected at the cost of the municipality and of the ratepayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is sensibly enhanced.
“He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing even to the process from which his own enrichment is derived. If the land were occupied by shops or by dwellings, the municipality at least would secure the rates upon them in aid of the general fund; but the land may be unoccupied, undeveloped, it may be what is called “ripening”—ripening at the expense of the whole city, of the whole country—for the unearned increment of its owner. Roads perhaps have to be diverted to avoid this forbidden area. The merchant going to his office, the artisan going to his work, have to make a detour or pay a tram fare to avoid it. The citizens are losing their chance of developing the land, the city is losing its rates, the State is losing its taxes which would have accrued, if the natural development had taken place—and that share has to be replaced at the expense of the other ratepayers and [324]taxpayers; and the nation as a whole is losing in the competition of the world—the hard and growing competition in the world—both in time and money. And all the while the land monopolist has only to sit still and watch complacently his property multiplying in value, sometimes manifold, without either effort or contribution on his part. And that is justice!”
The “rent cycle” as I call it created not just unearned value, but is a fundamental injustice that needs resolving – as a tenant, for instance, I pay twice – once in my taxes on labour and consumption of ordinary goods, which, in turn, sees land values rise and me having to pay yet more in rent. A landowner, whether they pay these other taxes or not (and of course the vast majority do) see those taxes spent to increase their property values and negate their taxes.
Fred Harrison, about a decade ago now, in a book called “Ricardo’s Law” calculated that London land values, for instance, rise in aggregate by more than the entire combined tax bills of Londoners. It’s disgraceful. It is an injustice that has been going on for, well, 800 years at least (Magna Carta was a charter for enclosure) and in spite of widening suffrage and popular democracy it is still with us. We are not an equitable society while such power continues to go with land.
“PS, it could even raise more than a land value tax.” – if Ricardo was right (and essentially economists ignore, not argue against him – the law of rent is explained in the first chapter of Undercover Economist for example, matter of factly, not contentiously) then all taxes ultimately come from economic rent.
If we aimed to collect all the economic rent of “land” in its broadest sense – so everything we use or extract from nature with no cost of production – we can estimate, based on exiting “rent” in the economy plus existing taxes, that there would be something over 50% of GDP in land rents. Every single person I know worth a decent amount would be hit harder by such a levy than by taxing either their incomes or other types of assets.
There’s enough, on that basis, either to give a £10k per annum dividend to every single man woman and child in the country and get them to make their own choices about services to use, or, if you are more enamoured of state monopoly provision of things than I am, say everything government currently spends could be kept and give £5k dividend to everyone. It’s a vast flow. That’s why it is so damned unjust.
Hi Jock, I agree with a land value tax as part of a net asset tax, but I think that is as far as we will get.
A lot of the “unfair” arguments can be made to things such as intellectual property rights. If people think land ownership is fundamentally wrong then they should seek to ban it. If not, then I think it should form part of a wider tax reform.
Thanks for your messages 🙂
IP rights’ financial manifestation is economic rent 🙂 They should be, if anything, abolished entirely IMO.
As I say, if Ricardo is right and all taxes come from rent, why tax the intermediate stage assets or incomes when it is easier to value and collect on the source that takes the incidence of all other taxes.
I do not feel an injustice because I can’t afford a Ferrari. I certainly do, and justifiably so in my opinion, because I pay twice for somewhere to lay my head between working 50% for the state. I need the latter. I’m happy with Shanks’s pony for my transport.
Occupancy and use is not fundamentally wrong by the way, just the *theft* by landowners of the social surplus created by *all* of us which manifests itself financially as rent/land values. You cannot say the same about most other assets.
People used to tell me that “taxes are the price we pay to live in a civilised society” – not so, “rent is the price we pay to live in a civilised society” and landowners steal it all.
Where does this proposal leave farmers?
By and large agricultural land is, of course, substantially lower in value than anything remotely urban. If you are a tenant already paying a market rent for your farm you’d not really be any better or worse off financially since a landlord can’t pass on a tax he’s already charging you for in your market rate rent.
There’s a chapter in the ALTER 1909 commemoration book on agriculture by farming PhD doctor in Scotland called Duncan Pickard – http://www.amazon.co.uk/dp/0856832278/?tag=libdemvoice-21 – who argues, amongst other things, that it would enable more people to get into agriculture if they wanted to because land currently hoarded as collateral for capital would become available to start-up farmers.
The ALTER book is not in eBook format so far as I am aware, but you can hear me reading it in Audiobook format here: http://jockcoats.me/static-pages/case_new_peoples_budget
If, however, a farmer tries to exploit “hope value” and applies for planning consent for non-ag development, they will start paying taxes at the higher land value and so encourage quicker development of permitted sites and reduce the incidence of hope value more generally.
Oh, and none of this sort of windfall: http://jockcoats.me/content/therell-be-singing-vale-tonight-no-doubt or this: http://www.independent.co.uk/news/uk/home-news/farmer-rejects-275m-from-developers-for-his-sussex-land-in-local-fight-against-building-sprawl-on-green-areas-10242455.html
Fair economic system=fair distribution of the factors of production=aligned incentives=optimal economic efficiency.
All the above are one and the same thing.
Produced factors should remain private, otherwise transfers of income/capital from producers to non-producers via taxes distorts incentives.
And the value of the non-produced factor, Land, should be shared equally. If not it’s value when capitalised into selling prices/rental income merely represents a transfer of wealth and welfare from producers to non-producers which again distorts incentives. A common feature of monopolies.
As Land by value is highly concentrated towards the wealthiest end of the population, a fair economic system would see a large reduction in wealth and income inequality.
Only one caveat. As Winston Churchill noted, land may be the Mother of all monopolies, but it isn’t the only distortion that affects our economy.
Treating the root causes of dysfunction, rather than the symptoms via taxing income/capital and redistribution, is the correct solution.
Good things happen when we align incentives. Fairness, freedom, prosperity and peace.
It really is that simple if you’ve the mind to see it
So what would happen to someone who, as they grow older becomes more and more asset rich and cash poor? Would they be forced to sell up or is there some mechanism built into the system to recover the debt on death?
Two questions:
1. Is there room in ALTER for those who might be persuaded to subscribe to the australian system whereby the primary residence is exempted from LVT? You would appeal more widely then to those who like the idea of a property owning democracy in general, and my-home-is-my-castle in particular.
2. I am broadly content with ONS statistics that show that when the effects of taxes and benefits are [both] taken into consideration, all quintiles of the households income index lose roughly 1/3 of income to the exchequer. What I am not happy about is the toxic labyrinth of in work benefits that labour made to get there, How does LVT help with this?
Land Value Tax unquestionably sound in theory and as such backed by a wide range of influential economic commentators; the challenge is to find a practical way of introducing it partially somewhere , somehow in the UK so as then to win political backing for full scale reform – St which point it would have to be instead of other taxes, not in addition to them .
TimP, I hope you will understand that what you ask about is a problem primarily in the transition to such a system, rather than an issue with the system. So yes, since the “poor widow bogey” as had been, apparently, the primary objection since well before Churchill used it in 1909, much thought has gone into this sort of issue.
One of those is indeed rolling up the tax liability till the property is sold or passed on. But there are others, such as issuing a bond (I suppose a little like those mortgages McCarthy & Stone organise) that would pay the tax like an endowment and get repaid out of the proceeds later.
For me, I am a purist – because I believe the economic justice of LVT is so important that I would hit everyone with the tax as soon as possible and then compensate losers on a one off basis. But yes, there are lots of shades of opinion on this.
jedibeeftrix,
1. Yes, I guess so. There are lots of shades of opinion even in ALTER about how to implement. I think more favoured than the Australian one (which of course is far better than we have but still only a part of a portfolio of taxes rather than fully “single taxing” as Henry George would suggest and the Law of Rent would demand. For instance, rather than a whole first property exemption, some have suggested a “homestead allowance” a little like a tax free allowance, so it probably would not exempt all of a £25 million property with an ex-footballer living in it, but might be geared around some average of local house prices. Also, it has been party policy (and remains so) to start with LVT for business rate replacement and to include residential landlords as businesses for rates purposes to show how it would work before affecting people’s homes.
However ultimately it is the attitude of “property owning democracy” that is the problem. We have been conditioned by successive governments to aspire to home ownership as a primary asset. It’s not, it’s a primary *cost* of living. A fully implemented LVT would likely reduce the cost of most property by anything between about 25% and 75% depending on how much of the proportion of cost is made up by the location. Ultimately you would not be paying this to a previous say in a lump sum financed by toxic debt, but paying its annual rental value instead of your other taxes. So your mortgage would be, say, halved, and your taxes absorbed into the cost of your housing.
You would of course be left with a long term liability, just as you have now with income taxes, to pay the land tax till you leave the property, either in a Pickfords van or a box of your own. But in such a market it is easy to envisage institutions and mechanisms to insure you against shocks of large changes in land value when, I don’t know, Crossrail stations come near you and your land value doubles. You could, for instance, take out a package of insurance, you could even borrow from a bank to pay it off over 25 years or however long you expect to stay there. You could call it a mortgage 😉
Many Georgists follow George’s idea that whatever the government doesn’t spend of the rent collected should be returned as an unconditional equal (but perhaps localised so that income support is more matched to regional costs of living or something) dividend of what remains. This is potentially an enormous sum of money. If David Ricardo’s explanation that “all taxes come from rent” eventually, then there’s about 55% rent in the economy at the moment, amounting to what, about £700bn, so sufficient to spend about the same as now on services if you want plus a dividend of about five grand per man woman and child in the land per year. Or, if you are more libertarian, a dividend of 10 grand each and they go out and procure their own services from non-monopolistic non-coercive non-state institutions.
Of course as you reduce other taxes to replace them with LVT, according to Ricardo, rental values will rise to start with as the surplus no longer collected from other taxes finds its way back to rent/land values. So it is very important to introduce it as a replacement else reducing any other taxes will eventually lead to higher housing costs and further concentration of land value into owners and particularly owners of more homes than they need and those they let out.
Duncan – I refer you to existing manifesto commitments (such as they are worth with no chance of government at the moment!) that currently the thought is to implement it to replace business rates and to bring residential letting into the business rate regime instead of council tax regime. That in itself would have a big effect, since landlords price their investment on the basis of yields, other house prices will start to fall as yields for investors, currently the price-makers in many housing markets, fall.
By the way there is a fantastic resource for answering all sorts of questions about LVT at the “Killer Arguments Against Land Value Tax…Not!” blog at http://kaalvtn.blogspot.co.uk – the author, Mark Wadsworth, is an accountant and LVT activist – he started a party for this last election, the “Young People’s Party” running on a platform of LVT to publicise it. Mark is a member of the cross party and no-party “Coalition for Economic Justice” which involves pro-LVT campaigners from across the political spectrum, including Labour, Tories, Lib Dems, Greens and others (even a few UKIPpers) and helps to arrange events for parliamentarians (maybe even still an APPG on the issue).
Bottom line – post implementation – no taxes, just ground rent to the government, redistributed as much as possible after government spends its necessaries, your housing costs halved, more income from no taxes on that or capital or consumption. Better to start teaching people that investing in a “cost of living” is not such a good investment unless you are dead, and that investment in productive capital is what will enable us to support ourselves longer term, especially as we approach higher levels of automation and lower need for labour. Which is really what Thatcher was thinking with “Right to Buy”, wrongly.
Ultimately, it is such a change in the economic system that has been corrupt for 800 years (do NOT celebrate Magna Carta in three weeks time as a people’s charter but as a thief’s charter for stealing the land from under us!) and there is sufficient embedded rent to tax it all and compensate all losers on a one off basis. For me that would make its beneficial effects felt more quickly and be more just. The current system may treat a home as a castle but it is robbing from those without on a grand scale – as a tenant for instance, over the past ten years alone, I am more than a quarter of a million pounds down on my colleague at the next desk who managed to buy a home ten years ago – his tax compeltely mitigated by his asset value rising, mine being utterly shredded by continuing to pay taxes on my labour that feed the very rent increases I am obliged to pay. That is a very far cry from justice and why I see it as fundamentally the first thing we must promote as liberals.
Finally, a recent, very readable, book, “Land: a new paradigm for a thriving world” by a chap called Martin Adams, is a very readable, contemporary explanation of LVT and various methods to introduce it and mitigate the transition effects. His web page and details of the book are at: http://www.unitism.com
Oops – looks like I’ve said too much for the auto-bots 🙂
@Tim P The problem of ‘rich widows in mansions’ could be resolved in various ways. Someone could take in lodgers if they wished to receive extra tax free income. Or they could take out debt or a mortgage/equity release. This would certainly incentivise downsizing, as well as families sharing housing, as in many parts of the world. The current system incentivises living apart and not making the most of what is a very limited asset, whilst preventing the young from making progress unless they are lucky enough to receive an inheritance.
Coupling LVT with a universal basic income would also incentivise downsizing or making better use of large properties. It would also reward those who move to cheaper areas, thus mitigating the cost of living disparity across the country.
Ultimately all taxes impact on some more than others – the current regime is ultimately unsustainable, divisive to society and needs to change.
@simon longevity is fuelling house price inflation. We need some way to get family house s onto the market
Another huge aspect of this is that if Ricardo is right, and it looks like he is, then also all surpluses go to rent eventually too. In simple terms, as Piketty and his most recent critic Rognlie at MIT show, rent, the return to land, grows and squeezes out wages, the return to labour, and interest or profit, the return to (non-land) capital. So profits and wages get squeezed while land value go up and landlords get rich. This is the opposite of a productive economy. Freeing up wages and capital from this slowly tightening noose of rent will free up industry (and decimate casino banking – because they aren’t being called on to create so much money to pay for land value in homes).
It should also be part of international development policy. It is, for example, I believe, the missing link in Paul Collier’s “Bottom Billion” argument, and in checking the predatory extraction of value from poor countries by global corporate interests and making sure more of foreign direct investment is captured for local populations rather than expatriated to the home country of the global corporates.
And if you’re going to tax it, you need to define it – so all those precarious farmers in Africa being chucked off government owned rented land to make way for M&S rose growing, Chinese rice growing or Duchy Original bagged salads, will have rights to resist such expropriation and dispossession.
@ Eddie
My counter arguments to your idea of a “net asset tax” are:
1) Logistics – valuing all these assets would be tricky and time consuming, especially as their owners would now have an incentive to hide them.
LVT is far easier.
Working out a location value can be done based on sale and rental values in the area, without having to inspect the minutae of each building. (I think you misunderstood Malcom Todd when he made this point)
A full property tax would require each building in this country to be fully inspected at regular intervals – much more work! (And that doesn’t even touch trying to list and value other forms of wealth such as jewelry)
2) LVT isn’t just about taxing wealth.
The tax is about incentivising good, efficient use of the land. Supporters of LVT favour it for its positive effects on economic development as much as for its progressiveness..
@ Jedi
1) This is indeed debate within ALTER as to whether there should be a “homestead allowance” for residential properties, perhaps as a transition, possibly as a permanent feature of the tax. We’d be very happy for you to join it. 🙂
2) The problem of in-work benefits is a huge topic altogether and I doubt any policy, even LVT, could provide a magic bullet.
We do think LVT could contribute though.
By incentivising more efficient use of land, and for landlords to avoid leaving properties empty, we believe that this would lead to more supply and competition, which would hopefully drive down rental costs and reduce the need for in-work benefits.
With regards to homestead taxes the incentive would be to stay in large properties rather than downsize or live with other people to reduce one’s tax burden.
Taxing all land would be true to one of the key incentives, that is to make best use of the land. If this means families live together without being financially penalised, this is a good thing. Coupled with a basic income it would mean that indviduals can trade off their living circumstances against their income in a very real way.
One more thought, I would generally be in favour of a national rate on land value tax and basic income/LVT dividend, as it would give people the option to move to somewhere where land is cheaper yet keep the financial benefit from doing so. Distributing local LVT procedes locally would duplicate the existing system where vast sums of housing benefit are paid to those in the expensive areas, yet if they move to any number of underpopulated empty areas their housing benefit is dramatically cut. Thus the working poor commute past this trapped non working poor population on the way into work each day.
@ Duncan
ALTER’s intention is that LVT be used to replace other taxes.
The first taxes to be replaced would be the existing property taxes – Council Tax, Business Rates, Stamp Duty Land Tax and Inheritance Tax.
Any further revenue raised by LVT could then be used to put money back into people’s pockets, either through reducing income tax further, or by implementing a citizen’s income/negative income tax.
ALTER would agree with you that this shouldn’t simply be an additional tax on people.
@ Simon – I currently share your position on homestead allowances and exemptions but it’s definitely an area for further debate.
With a citizen’s income, I think it would have to be separate to housing benefit, simply because of the disparities around the country, as you say. I think the only way to reduce the housing benefit bill is to reduce the cost of renting.
Duncan,
“Land Value Tax unquestionably sound in theory and as such backed by a wide range of influential economic commentators; the challenge is to find a practical way of introducing it partially somewhere , somehow in the UK so as then to win political backing for full scale reform – St which point it would have to be instead of other taxes, not in addition to them .”
My thoughts on this are that LVT should be introduced in London first. The GLA precept for a typical Band D property is currently circa £300. A change in the basis for assessment of the precept to LVT coupled with the introduction of additional council tax bands for higher value properties would provide for a relatively seamless rebalancing of local authority council tax assessments between high value properties in Central London (that typically pay the lowest council tax) and those on the outskirts.
Following a suitable period of evaluation, the land value base for moving business rates and council tax to LVT would already be in existence.
A good campaign for the Liberal Democrats candidates for Mayor and London Assembly members to get there teeth into.