Land Value Taxation Campaign

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Land rent for public revenue

Greece votes no

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The Greek "No" vote looks as if it will turn out to be a pivotal historic moment. The Euro was always a political project. It was not grounded on sound economic principles. For countries to share a single currency, the first precondition is that all the members' governments follow the same fiscal policies. The second requirement is that there is a means of counteracting the effects of geographical difference; in the absence of such measures, the wealth flows from the periphery to the centre; the centre prospers whilst the periphery languishes.

This is the persistent experience within individual contries. The UK suffers from chronic regional economic imbalance. The same phenomenon can be observed pretty much throughout the Eurozone. It does not depend on the size of the country; little countries in the centre of the zone are not in trouble.

If Greece finally drops out, it would be in the same position as the fictional African Republic of Alodia. At the turn of the 21st century, Alodia was a struggling, debt-saddled, former French colony in West Africa. Its agriculture and industry functioned well below their capacity; it had a large and growing population of AIDS victims; it had deepened its people’s suffering in order to secure debt relief; its natural environment had been deeply degraded.

Faced with impossible conditions imposed by its creditors, it just defaulted on its debts and was forced to batten down its hatches and live off its own resources. It introduced this constitution, with these two clauses in the first section.

7. Access to the bounty of nature, not created by human beings, being necessary to all life, the people’s right to equal access to and enjoyment of the land and natural resources shall be secured. No persons or corporations holding title to land shall be deprived of such land without due process of law, but the rental value of all lands and natural opportunities shall be paid to the community. Land and resource values shall be assessed and collected in a manner prescribed by law. Assessment data shall be updated annually and made public, and landholders shall have the right to appeal their assessments in a court of law.

8. No lawful property shall be taken for public use without just compensation. The rental value of land and natural opportunities, being the rightful property of the community, shall not be construed as the property of any individual or group, and the public collection of such rental value shall not entitle the resource holder to compensation.

"The Alodia Scrapbook" by Lindy Davies, describes what happened to the country.The first few years were hard, but eventually the country succeeded in picking itself up by its own bootstraps without dependence on external finance. That is the model for Greece, but it would be astonishing if it was followed.


What is LVT - at length

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A new 3000 word article available as a download discusses LVT in fuller detail, beginnning with an explanation of how land value arises and what it actually is (and is not). One of its aims is to dispel the growing misconception that LVT is a wealth tax based on the selling prices of land. LVT is not a wealth tax and it is a charge on the its rental value, which is an actual or imputed revenue stream. Selling prices are of significance in so far as they are the capitalisation of the rental income that is retained by the title holder, and are thus one means amongst others of establishing rental values.


House prices surge near Crossrail stations by up to 82%

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More land value channeled into private pockets. Article in the Guardian, with not a word about LVT as a clawback mechanism for these windfall gains at taxpayers' expense.


What people think other people think

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Research conducted for the organisation that represents renewable energy companies, RenewableUK, taken together government surveys, suggests that people underestimate public support for wind power, putting backing at around 40% on average. When these results are combined with those from  the latest survey by the government, which shows support is at 74% for offshore wind and 68% for onshore wind farms, the conclusion must be that people are under a misapprehension about what everyone else is thinking. The same is probably true for land value taxation. In this case there is the added difficulty that many of its advocates do not properly understand it either. One of the  warning signas is when they refer to land value tax as a tax on wealth. Thus they fail to put across the case as effectively as they otherwise could.

The same thing is probably true of  a whole range of public policy issues. Link to article in Guardian.


Begging according to Georgist principles - update

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Abour twenty years ago there was a man in Brighton who would go up to people in the street and ask them for ten pee. He cannot have been very successful as he later reduced his request to a pee. Perhaps he did not generate sufficient sympathy, being big, sturdy and obviously well-fed. Other beggars adopted different strategies. A popular one was to ask for the bus fare to Eastbourne as they had lost their return ticket, or, more daringly, the train fare to Southampton to see a dying mother. New Cross station in south London was a popular haunt. One beggar needed the fare to go to London Bridge for an appointment at Guy's Hospital; another lurked around the entrance, and, following a pace behind women with children in prams, ask people coming in the opposite direction for money to feed the child.

That sort of begging seems to have taken hold in the 1980s as the social fabric started to fray. In more recent times there has been a huge increase in beggars from Bulgaria and Romania, following their entry to the EU. This has brought begging into countries where it was unknown in modern times, including Germany and Scandinavia, where comprehensive welfare states had made it unnecessary.

People find it an irritation and embarrassment, and there is constant talk of doing something about it. But what? If people didn’t give, the beggars would go away, but obviously enough people are happy to drop a coin in their direction, for whatever reason. There are more who will buy them a sandwich or coffee. They can even perform a useful service, collecting empty bottles and claiming the deposits, or taking unwanted food sold as 3-for-the-price-of-2 offers. Others are a nuisance, when they come up to people in the street. There are rumours that they can act even more aggressively, for example, by escorting people to cashpointss and forcing them to take out money and hand it over.

There are claims that they operate as organised gangs. There is indeed evidence that some kind of mafia is in operation. Homeless people in Sweden who sell a magazine called Faktum (equivalent of The Big Issue), have been complaining that they have been forced off their regular pitches, sometimes at knifepoint, by heavies from Rumania and Bulgaria. There is certainly collaboration between the beggars – for example, in organising transport, and probably accommodation as well. There is talk about banning begging altogether in Sweden, but the fact that the best pitches - at the entrances to railway stations, shopping malls or next to busy bus stops, are now coming under control by protection rackets taking a cut of the taking points to a potential and constructive solution. The mafias are collecting a rental value which could be collected by the local authority instead, thereby applying Georgist principles to bring the whole activity under control?

All beggars within the city area would be required to purchase a license, valid for a month or two. They would get a badge with a photograph, registration number and expiry date, which they would have to display when at "work". There would be conditions which they would have to comply with – for example, they should not be allowed to approach people. If they broke the rules they would lose their licence.

What about those rental values? These arise in the busiest areas of the city. It would be necessary to designate zones where it was only permitted to beg at particular marked pitches. To use these sites, between, say, 8 am and 8 pm, an additional session permit would have to be purchased; these could be for an hour or two. Initially, the charges could be set as a rough-and-ready flat fee, but they would have to be reviewed regularly so that the charges more closely reflected the values of the different sites. Obviously a balance would have to be struck between optimising the charges and keeping the system as simple as possible. The permits might allow limited trading or other activities such as playing music.

In effect, the community would take over the role of protection currently provided by the criminal gangs, who would be forced out of business. This would be to the advantage of the beggars themselves. Given that the criminals obviously find it is worth the effort, the revenue should at least be sufficient to pay for a team of inspectors, and possibly a profit on top for the city’s coffers.


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