“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.

1) The housing problem – shortage of affordable housing
2) The government deficit

Housing is not affordable (for purchase) because many people have little or cash saved, but bank lending criteria have tightened dramatically. Banks would lend 100% of purchase price five years ago might be comfortable lending only 70% now. So people who needed 0% of the purchase price in savings now need 30%.

The consequence is that houses will not be “affordable” for large demographic groups, even if the price were to drop dramatically. If prices were to fall 50%, banks would still be demanding unaffordable deposits.

The real “housing problem” is always one of distribution, finance and affordability, not quantity. Building new houses unlikely to help.

Applying Business Rates to unoccupied land will have rather significant effects. The problem is I can’t be sure what. And other people would have their own ideas
about the possible effects. This poses an immediate political challenge, to say nothing of the opposition by vested interests.

My hunch is that it would bring the land onto the market, bringing prices down and impairing the solvency of the house builders. Not much new building will occur at this stage. The opposition parties will announce they would
reverse the legislation, and the government will relent under irresistible pressure. Decision making will be comatose until the political situation is unanimous.
We’ve seen this with much of the previous land tax legislation in the 20th century.

I don’t think the price of houses will be affected much, because the quantity will be almost unaffected, and the demand will be unaffected too. Same supply, same demand -> prices unaffected. Remember, 300,000 sites represents only around 1% of the UK housing stock.

A key problem with the UK economy is excessive levels of debt (private+public). Building and selling 300,000 new houses on credit would result in *more* total debt,
even considering the lower debt from the new NNDR, Stamp Duty, Income Tax and VAT. And the government will be pushed into spending on roads, schools, community centres, exacerbating the debt problem further.

I think any effective solution must affect the main bulk of housing and associated debt, rather than just working at the economic margins.

Unfortunately, for the above reasons, I cannot recommend the proposal as financially, economically or politically sound.

I wrote a paper for Prosper Australia’s Progress magazine explaining how to solve the housing and financial crisis. An abridged version was published here. I will email anyone a copy on request – land at adrianwrigley.com

http://www.youtube.com/watch?v=itO7OoKtNUc&feature=feedf

“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.

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