The Apollo Project
Liberal Ideas for the 21st Century
Tuesday, December 20, 2005
First steps towards a land tax
by Peter

Here is a little early Christmas for SVTaxers out there: Public Finance examining the case for LVT.

There have that nice quote from Churchill:

"Roads are made," he argued, "streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains - and all the while the landlord sits still… He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived."

All very fine. In general you can probably get a lot of support for a tax on landlords (with a suitable exemption for buy-to-let people).

The test is whether the tax can be designed in a way that makes it acceptable to owner occupiers who are staying put. The odds on this are not so high:

Reform must creep, rather than gallop. The knock-on consequences for the rest of the tax system are to some extent unpredictable, and the Treasury will be aware that the political barriers are substantial. Those with expensive houses but low incomes, such as pensioners, could face higher taxes.

So something to think about. And please let us at Liberalism 2010 know what we should think about this attractive but tricky tax.
posted by Peter Pigeon @ 2:43 pm  
  • At 20 December, 2005 16:39, Blogger James said…

    Two suggestions, neither of which are my own:
    1. A homestead allowance up to £X for an individual's main residence.
    2. Allow people to defer payment until after the asset is liquidised; so if the value of a house suddenly exceeded the income of its owner, the owner could still live there without being crippled by tax.

    The latter could be made affordable by allowing local authorities issue bonds against the expected (near guaranteed) income.

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"What is Liberalism?: I should say it means the acknowledgment in practical life of the truth that men are best governed who govern themselves; that the general sense of mankind, if left alone, will make for righteousness; that artificial privileges and restraints upon freedom, so far as they are not required in the interests of the community, are hurtful; and that the laws, while, of course, they cannot equalise conditions, can at least avoid aggravating inequalities, and ought to have for their object the securing to every man the best chance he can have of a good and useful life." C-B.


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