LVT - a really bad idea?

[usernamealreadytaken]

The New Poll Tax - from the Labour Manifesto

"We will initiate a review into reforming council tax and business rates and consider new options such as a land value tax, to ensure local government has sustainable funding for the long term."

The suggestion is that the LVT would be around 3%pa. That gives a very real possibility of some in the South East being liable for bills of in excess of £9000-£15000 per year or more, for living in fairly modest homes. That's pretty much a NMW worker's entire salary in LVT. I also read that pensioners would be exempt. Given that a great number of those with large houses and gardens are likely to be pensioners, isn't this really just a tax on ordinary people who can least afford it?

My first post links to an extensive report on lvt. My second post is in response to a query on the ifs view of the deliverability of the manifestos.

Bombardier agreed but it is the draft proposal so far as I can see. It also clearly states that the 0.85% would be an introductory concessionary rate to be raised to the full 3% rate within an agreed timeframe.

If it's in the manifesto can someone link to that?

Because saying it's in a discussion paper, on a website somewhere IS NOT the same as in a manifesto.
If it was in the manifesto, this would be All Over the media.
So I think this is a misleading fib.

Dancing the quote in my OP is from the Labour Manifesto, page 88.

Artisan - your first post links to the Mirrlees review, which concluded 'There is a strong case for introducing a land value tax'?!

Yes? You can access all of it from the ifs website if you want. That's the concluding chapter.

Apologies - I thought you were arguing against LVT! I now realise you are in favour, like me!

how is this a wash though?

Tories:
The Conservatives have very few tax or spending commitments in their manifesto.

The Conservatives have given themselves the freedom to raise rates of income tax and national insurance contributions, but have made no other commitments.

Labour:
They would increase spending to its highest sustained level in more than 30 years and taxes to their highest ever peacetime level

Their proposals could be expected to raise at most £40 billion in the short run, and less in the long run;

could decide to increase the occupation of the premises, for example, by taking in lodgers or sub-letting

Let's just all live in communes then?

It's just more bloody tax to pay for vanity 'social' programmes. What we need is more efficient services, not an endless increase in ££ to pay for yet more 'public sector'. We need a less complex system, so more people can work in income generating jobs. If we did THAT, we could tax people less all round.

I don't know how to even begin working this out. We live rurally so the rental value of my plot would be worth maybe £50 quid a year based on the idea that I rent a field more than 10x the size for £500 pa. Houses are expensive though 400k to 1.2million. So a 3% tax on the rental value of the bare land would see me pay a laughable amount. A charge on the value of the house would mean that my council tax would triple.

If LVT worked it has been suggested that it would replace Council tax, potentially VAT, reduce income taxes and slow house price rises.

This could leave people with more money.

I do have a bit of a problem with Council Tax being in bands which only encompass fairly normal houses.

If my house is assessed at more than the council tax of my neighbours who have a smaller house, why shouldn't the notorious tax-dodging boss of the Daily Mail, Viscount Rothermere, pay considerably more than me for his country estate and his palatial mansion?

Many of the most valuable houses and estates in the country are owned by non-domiciled tax dodgers, including trillionaire Russian plutocrats. Why shouldn't they start to pay their way?

the big advantage of a tax on land is that land doesn't move around, and it's very difficult to hide. So perhaps not as complex and difficult to collect as some other taxes, nor so easily evaded.

As a country we are rather soft on tax dodgers.

Enough people have had a go at TM not providing the number of what the cap would be for social care - she has got considerable flack on why she can't give it yet hear we have JC proposing a LVT but cannot give a figure yet doesn't get the same level of flack for failign to provide clarity.

So its ok for JC to put something like LVT in the manifesto with no further detail and comments are all favourable and its not a problem and it won't be anything like what is being touted. But its not ok for TM to put in something like the social care in her manifesto with no further detail on the cap limit because how dare she not know what it will be. people have some screwed up ways of thinking

I don't think we've quite got to the bottom of whether this is actually in the labour manifesto or whether it is an idea floated by a labour think tank which is being trashed by the Telegraph and Mail just in case.

woman - It is the landowner who pays, not the tenant. And, as has been said over and over again on the thread, the 3% figure is scaremongering.

Furthermore, it's not as simple as a tax based on 'housing value' - this is different to land value! Most LVT schemes absolutely reflect the very different values of farmland compared to land for housing. The central idea of various LVT schemes is normally some variation of a tax on 'betterment' (the unearned increase in value that occurs when farmland is given planning permission). The idea is that planning permission is the gift of the state, which is a democratic institution making spatial decisions that reflect a greater good- so why should an individual landowner be the sole beneficiary of a decision to grant permission for a field to be turned into houses? The decision can cause land value to rise from £10,000 per acre to millions, and all that is pocketed by one individual who has done absolutely no work!

"Fancy comparing these healthy processes with the enrichment which comes to the landlord who happens to own a plot of land on the outskirts of a great city, 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, 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. Every one of those improvements is effected by the labor and cost of other people and the taxpayers. 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 enhanced. 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.

While the land is what is called "ripening" for the unearned in-crement of its owner, the merchant going to his office and the artisan going to his work must detour or pay a fare to avoid it. The people lose their chance of using the land, the city and state lose the taxes which would have accrued if the natural development had taken place, and all the while the land monopolist only has to sit still and watch complacently his property multiplying in value, sometimes many fold, without either effort or contribution on his part!"

Not my words - Winston Churchill's!!

Saying that possible LVT is one of the options to be included in a review of council tax and business rates, is in the manifesto.

Everything else isn't.

There couldn't be detailed figures for any of it before the review because... that's the point of a review.

Which might anyway conclude LVT isn't desirable. Again, that's the point of a review.

Artisan and once again for those who don't RTFT the quote in my OP is from the Labour Manifesto, page 88 so I think we have now got to the bottom of that!

PerkingFaintly when TM says she is looking to consult ton what the cap would be on social care are you are ok with this as well then?

I'm so sorry user. I missed the page reference.

Just like all the papers seem to have missed the reference to unimproved land and are currently giving themselves conniptions at the thought of paying 3% of whatever they think their house is worth.

Depends on exactly what she's said (I haven't checked), spectre.

If she's said, "We've decided to do it like this, but actually we haven't worked out the numbers," I'd be unimpressed.

If she's said, "We're looking at this idea, among other ideas, and will initiate a report examining and comparing the options," I'd think quite right too.

spectre8 "comments are all favourable "

I think perhaps your non-rose-tinted spectacles are obscuring your view.

"It is proposed that the higher (or standard) rate of 3 per cent also be applied to rented residential properties – payable not by the
occupier, but by the landowner, on the grounds that it is land
capable of generating an income "

So that's the same taxes passed on as rent increases to working families then.

Why the fuck not, it's not like you have the time to march down to central London and mount a huge protest when you're struggling to stay afloat, is it.

What a wonderful exciting journey Jeremy Corbyn will take other people on, the rest of us should be happy to pick up the tab really.

This is p.88 of the labour manifesto. I don't see anything about a 3% rate anywhere on the page. Here is a link to the PDF full document www.labour.org.uk/page/-/Images/manifesto-2017/Labour%20Manifesto%202017.pdf