Land Value Taxation received a good airing in the FT this week. It started with an article by Tory MP Nicholas Boles who wrote a piece entitled: It sounds bonkers but we should embrace a land tax. Boles suggests that taxing land value is usually associated only with those not in the mainstream but he points out how in particular a version of the tax in use in New South Wales works well in stimulating land use.
Two letters appeared later in the week:
Right first time – a land value tax would be ‘bonkers’
From Mr Kevin Cahill.
Sir, Nicholas Boles would have done well to stick to his Conservative instincts and eschew the idea of a land value tax, first proposed in the 19th century when less than 4.5 per cent of the population held all the land of the UK (“
It sounds bonkers but we should embrace a land tax”, September 30).
The commonest characteristic of those currently advocating this totally obsolete tax, apart from their peculiar political backgrounds, is that almost none of them know anything about tax, economics and least of all land. Mr Boles excludes farmers and domestic dwellers from land value tax. In so doing he excludes about 80 per cent of all land in the UK. Another 15 per cent of the remainder is road, mountain, bog and moor, so is untaxable. He would apply land value tax, as do most of its advocates, mainly to commercial property, already taxed through business rates. A bad tax would simply be followed by an insane one. And Mr Boles has overlooked that most currently decisive of land value issues, its plummeting price. Land value tax might work if universally applied in a rising market. In a falling market it would simply make any government deficit significantly worse. As your headline writer so elegantly put it, “bonkers”.
Kevin Cahill, Exeter, Devon, UK
and then today:
Who’s ‘bonkers’ about a land tax?
From Mr Geoff Copeland.
Sir,
Kevin Cahill ascribes the commonest characteristics of those advocating a land tax as of “peculiar political backgrounds” and that “almost none of them knows anything about tax, economics and least of all land” (Letters, October 4).
I believe that in the past both
Sir Samuel Brittan and
Martin Wolf have written warmly of this tax in your columns, albeit in a somewhat more comprehensive form than Nicholas Boles MP suggests. Would Mr Cahill regard them as “bonkers”? Or is it Mr Cahill’s political persuasion that informs him?
Geoff Copeland, Woodford, Cheshire, UK
The letters have continued this week:
We already have six land taxes!
From Mr Clifford Lawrence.
Sir, I refer to the article by Nicholas Boles proposing a land tax (“It sounds bonkers but we should embrace a land tax”, September 30) and Geoff Copeland’s letter (October 6) giving further support.
They are too late! There are already six such taxes. They are as follows: business rates (when occupying or even not occupying a property), stamp duty land tax (when purchasing), Section 106 payments (when building on the land), the community infrastructure levy (also when building), corporation tax or income tax (on rental income) and capital gains tax (when selling the land).
How many more taxes are they proposing?
Clifford Lawrence, London SW1, UK
Of course he is right but each of these taxes has its disadvantages. How much more simple and efficient would it be if they we collectively replaced by a tax on the rental value of land falling on the owner.
Tags: land value tax Nicholas Boles
Land Value Taxation received a good airing in the FT this week. It started with an article by Tory MP Nicholas Boles who wrote a piece entitled: It sounds bonkers but we should embrace a land tax. Boles suggests that taxing land value is usually associated only with those not in the mainstream but he points out how in particular a version of the tax in use in New South Wales works well in stimulating land use.
4 Comments
@Clifford Lawrence.
LVT is called the SINGLE TAX. No income tax, VAT and host of other needless taxes. Yes taxing the UKs land by its “value” can eliminate all these rather daft taxes.
It works. Hong Kong use it to have super low income and Corporation Tax.
It promotes enterprise.
It prevent harmful speculation LAND#
It prevents boom & busts
I find it bizarre that Kevin Cahill accuses others of not knowing anything about economics. He stated:
“Land value tax might work if universally applied in a rising market. In a falling market it would simply make any government deficit significantly worse.”
In a falling market the reduction in income tax would do the same? Governments would have little need for deficits as the economy will be very strong under |LVT. Everywhere it has been used it created economic growth
LVT is known as the SINGLE TAX – only one tax. LVT promotes enterprise, stops booms & busts, reduces harmful speculation and gives stability. Hong Kong and Singapore use it – I have no need to highlight the enterprise spirit and success of these two places.
Adam Smith (father of modern economics) , David Ricardo, Winston Churchill, Leo Tolstoy, Milton Freidman, Nobel prize winner Bill Vickry, Martin Wolf, Fred Harrison, etc, etc, all advocate(d) LVT.
Kevin Cahill’s limited economics knowledge fails to realize that when an economy grows surplus money always ends up in the land market because it is tax free. The 1928 and 2008 crashes were LAND fueled. LVT stops that in its tracks.
He needs to understand what “unearned income” is. Hint, it is what parasite landlords get when taking in rent. The rentiers have taken over by masquerading as capitalists.
Kevin needs to know about classic economics and the perverted neoclassical economics which merged LAND into CAPITAL – since then we have had periodic world-wide crashes.
Kevin needs to learn a lot.
This animated Youtube vid is good. Maybe Kevin Cahill should look at the list of Nobel prize winning economists who support LVT at the end of the vid. Maybe they know something Kevin doesn’t.
http://www.youtube.com/watch?v=itO7OoKtNUc&feature=feedf
Re “almost none of them know anything about tax, tax, economics and least of all land” I think Kevin Cahill has had any formal training in economics and when I spoke to him did not appear have much knowledge of leading economists arguments for land Tax; he dismissed Adam Smith’s support for land Tax for example. In the 60′s he was a platoon commander in Aden and NI, in 70′s he did a degree in English lit and became system analyst before becoming a journalist in 1979 writing for computer mags. His knowledge appears to come from working on the Sunday times rich list in 88 and in 2001 he wrote Who Owns the World: The Hidden Facts Behind Landownership. Where he say the queen own 1/6th of the earth, which I believe includes Antarctica.
“excludes farmers and domestic dwellers from land value tax. In so doing he excludes about 80 per cent of all land in the UK. Another 15 per cent of the remainder is road, mountain, bog and moor, so is untaxable” This is fairly typical of his arguments, he quotes area as if it was as important as value. Farm land is about 85% of UK land, but only 2% by value.
He claims that it would be very difficult to prove who owns the land, although he seems not to of heard of geographic information systems and ignores that many countries around world have land Taxes. The UK did have a land Tax of sorts between 1692-1963 and the records of land ownership are still in the National Archives and of course there is the Doomday book. It would appear we are not capable of doing with all our computers and Satellites what William the Conqueror managed in 1086.