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The LVTC blog, by Henry Law

The comments in the LVTC Blog are a personal view of our Hon. Secretary Henry Law and do not necessarily reflect the official policy of the Campaign.

This is a place for personal observations and comments on politics, economics, current affairs, on-going discussions on the potential for LVT to remedy some of the current ills, and the impact on Society of any of the above. 

Please read and enjoy, and feel free to respond to Henry if you have any thing you would like to add.

Tax Research needs to think more deeply

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Richard Murphy of Tax Research, the think tank behind the Tax Justice Network, came up with this in response to a discusssion. And then closed the forum from further comments.

"Whenever someone mentions tax and theft in the same phrase the response 'anti-social libertarian' (or worse) comes to mind. How about tax for redistribution? Or for repricing market failure? Or economic management? You dismiss all of those?"

I would suggest that he needs to think more deeply. We do not argue that all taxation is theft. Far from it. We assert that the private appropriation of the rent of land is theft, since it is a value that belongs by right to the community and is the right and proper source of government revenue. Failur to collect this stream of wealth gives rise to the necessity for a second theft, as a matter of expediency: the taxation of the wages of labour - the product of his work. That is legalised robbery for it is taking what rightly belongs to the labourer. This is true even of the very high wages received by the rare football star. Many of us might think the amount received for kicking a ball around a field is absurd but it is nevertheless the reward for his labour. We fail to understand how anyone of either a left wing or a right wing persuasion can convince themselves otherwise.

Next, we come to redistribution. To argue that taxes are necessary for the redistribution of wealth is to beg the question why the wealth is maldistributed in the first place? We would suggest that the primary reason for this maldistribution is land enclosure and the private appropriation of the rent of land that has gone with it. This immediately creates two classes - those who receive rent, and those who must pay rent and work for wages.

Market failure can also be traced to the private appropriation of the rent of land, since it places the owner of land at a permanent advantage in relation to those who are not owners. They have no option but to accept whatever terms the land owner deigns to offer. The alternative is to live in the street and starve.

As for the use of taxation for the purposes of economic management - any tax other than one on the rental value of land can only affect the economy negatively. A tax on windows led to bricked-up windows. Taxes on beer and fags discourage smoking and drinking, which is arguably a desirable aim. But since the tax system is substantially levied when economic activity tax place, the only thing it can do is to discourage the production and exchange of goods and services.

We do not for a moment deny that taxation can be put to good uses which sustain and promote economic activity. Our case is that many of the means used for raising this revenue are indeed theft and can do nothing but harm.

Mansion Tax could dash Great Expectations

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We are no fans of the mansion tax, which is as bad an implementation of a property tax as it is possible to conceive. However faced with the prospect, one old friend of mine has decided to realise a long-standing ambition and convert part of his West Wing into additional stables. It will all be done very tastefully of course but the alterations will take the value of his pile just below the threshold. In the meantime he will send off to Sotheby's a couple of twentieth-century paintings which are worth a tidy sum but he refers to as "daubings", and invest instead in two or three good horses - the aim is to go to a Tattersalls auction later in the years. If they bring in a wealth tax, the valuers will have their work cut out to put an estimate on what they are worth.

What the Chancellor ought to do

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Anyone who knows anything about the Campaign will know what changes we would like to see made to the tax system. However, even if the government gave the go-ahead tomorrow, it would take at least three years to get LVT up and running. So what would we like to see the Chancellor do at the forthcoming budget?

The LibDems are said to be pressing for a wealth tax, but they have no business to be arguing for anything of the kind. It is a betrayal, or at least a misunderstanding, of the party's philosophical principles.The Liberal tradition, following on from Adam Smith, was to argue for a tax on the rent of land, which is a very different matter from a tax on wealth, or a tax on mansions, for that matter.

The LibDems have also been arguing for a higher threshold for income tax. We agree. It is absurd that anyone should be subject to income tax if they earn less than they could by working for around 40 hours a week at the statutory mimimum wage. There is a simple and uncontroversial way of achieving it: raise the threshold but increase the standard rate of income tax to compensate for the lost revenue. For most people this would make next to no difference, but it would re-shape the income tax system so as to reduce the barrier against marginal employment, which should cut the government's bill for unemployment benefit.

A slightly more radical way to raise extra revenue would be to change the Council Tax ratio. Top band properties are worth 6 times band A but pay only three times as much Council Tax. There is no reason why this could not be increased to a higher figure. It is far from what we would propose as an ideal solution but it would achieve much the same effect as Cable's Mansion Tax without the cost of the comprehensive revaluation which would be necessary to establish what was a mansion and what was not.

These suggestions are so simple and obvious that it seems strange that nobody in either the LibDem or Labour Parties has apparently come up with them. Or have they just not been picked up by the media? It does not add up.

What the Chancellor is most likely to do is the one thing he should not - a business rates "holiday" for owners of vacant properties. That is what is happening in Northern Ireland and in the Enterprise Zones. It is precisely wrong, since it discourages market forces from operating so as to allow rents to fall to market-clearing levels.

Cast out of Eden

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Does the bible tell us that when Adam and Eve were cast out of the Garden of Eden, they went to their local Jobcentre and signed on to get their Jobseeker's Allowance? Of course not, because they had free access to the surface of the earth and its natural resources. Nobody owned it. Job creationism is not consonant with scripture.


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There is a big hoo-ha in the papers today about government departments using consultants "employed" by service companies so as to avoid tax liabilities. It apparently skirts close to the borderline between avoidance and evasion.

Humbug. No-one who has ever paid their plumber, builder or car mechanic cash-in-hand has any right to complain. That must mean nearly all of us. The customer saves money and the tradesman ends up with more in his pocket. It is the tax system that is at fault. The piece in the Guardian is by Richard Murphy, adviser to Tax Justice Network. If he never pays cash and absolutely insists on a proper receipt from his tradesmen, he must be one of the handful in the country. I wonder?

Lukewarm support from where we would most expect it

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The strange case of Tax Justice Network

Most advocates of Land Value Taxation have arrived at their conclusion because, amongst other things, they regard the present tax system as unjust. We would expect that an organisation going by the name “Tax Justice Network” (TJN) would be actively campaigning in the same direction as ourselves.

Global jobs crisis

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The International Labor Organization has published its Global employment trends 2012: preventing a deeper jobs crisis. It tells us that, "The world faces a challenge of creating 600 million jobs over the next decade."

When the phrase "job creation" is mentioned, read no further. Who in their right mind would create a job for themselves?

The purpose of work is to satisfy our own desires. Since human talents are diverse, we do what we are best at and exchange the products of our labour. So it has been since the dawn of human history.

For this to be possible, everyone must have free access to the natural resources of the planet and free exchange of labour and its products. Land enclosure prevents the first, and the taxation of labour, goods, services and transactions prevents the second. This ought to be obvious, not least to those in outfits such as the International Labour Organisation. Clearly it is not.

When "experts" come out with nonsensical statements about the need to create jobs, they should either be ignored or ridiculed.

I received this comment which amplifies the point.

"I have always detested this term "job creation". I especially dislike it when used in connection with large capital schemes like a new railway or motorway or stadium, where it's as if the jobs will be "created" almost as a by-product of the scheme which is somehow independent of those that will actually build it. Not only does it concretise the notion that capital employs labour - it goes further, suggesting that the project could very well  proceed without labour - but that as a generous and benificent gesture the paymasters will take on a few men."

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