Land Value Taxation Campaign

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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.

What are banks for? A personal view

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What exactly are the proper functions of a bank?

A homeopathic dose of LVT

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"Making the change revenue neutral should avoid opposition from Treasury and minimise increases for those required to pay more." (comment in a discussion on implementing LVT)

Do were really believe in what we are proposing? Some people need to pay more tax because many others are paying too much at the moment, often to the point that it is not worth employing them at the margin, and then the taxypayer is landed with the welfare bill.

The government did not worry unduly about what people would think when raising VAT from 15% to 20% within the space of a year. Why are we so lily livered? Who will take any notice if we are so terrified of upsetting anyone at all.

Put the right system in place (all land subject to LVT and the tax is on annual rental values), so that it starts off with around 50% paying a little bit less, which should not call forth an overwhelming chorus of opposition. That will not be revenue-neutral. It will raise a bit of extra revenue and pave the way for the much needed increase in tax thresholds.

We need to bring the public with us by explaining the strategy and then there will be support for the measure. There is no point in watering down the proposal to homeopathic levels of dilution - when the probability of ingesting a single molecule of the active substances is vanishingly small.

But if people do not want it, then so be it.

A neat coincidence

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"If they are making money in UK, then they should pay UK tax." (comment on a newspaper article)

"Should pay" is one thing, "Can actually be made to pay" is another. The rights and wrongs of it are something else again, because whether people ought to pay tax depends, surely, on how the money is "made"? It is immoral and harmful to for the state take money from the wages of labour, which has become the principal source of public revenue.

The only taxes that people can be made to pay are those that fall on fixed property eg land. All the others can be and are avoided and evaded.

By a strange and neat coincidence, the only tax that the state has a moral right to charge is one on the rental value of land. Or perhaps it is not a coincidence, since it suggests that the world is better ordered than is generally realised.

An exchange of comments

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I reproduce this exchange from the Guardian's Comment is Free pages, commenting on an article by Peter Wilby on paying for care. I am sure, however, that there is no argument under the sun that could convince the author of the comments (in italics), who seems to have got out of bed on the wrong side this morning and is showing signs of irritation.


Is it "Give us jobs!" Or "Laborare est orare"?

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I noticed today an article under the headline"...British youth protest needs the spirit of los indignados...We're marching from town to town to build a mass movement against the cuts, demanding job creation, not destruction."

The author of the article, Paul Callanan, writing in today's Guardian, is the national organiser for the Youth Fight for Jobs campaign. He continues

"if the present economic crisis and attacks on young and working people show anything, it is that capitalism has not been able to solve the question of unemployment and poor living standards in the decades since the march. Yes, we may live much better now but we face 75 years of gains, like the NHS, the welfare state and the right to an education, being blotted out of existence. This government wants to wind back the clock to the 1930s. That is why we are bringing the spirit of "los indignados" to Britain and marching again.

"Young people, unemployed people, trade union activists and students from the struggle last year will march from town to town, starting on 1 October and arriving in London on 5 November, myself among them. We will be organising protests, demonstrations and meetings to bring together all these groups. We're demanding job creation not destruction from the government. We're demanding a wage you can live on for all, including apprentices and interns. We're demanding a halt to the brutal attacks on benefits, already lower for young people. To beat this government and to win a decent future, young people need to be part of a broad anti-cuts movement. That's why the solidarity shown on 30 June was so important. We want the march to help build a mass movement.

The tragedy here is that it seems as if the opponents to the British government's policies, unable to move the debate onto fresh ground, are condemning a generation to fighting over old territory in a battle that was never winnable and not even worth winning.

Jobs are tasks that have to be done though we prefer to avoid doing them. Their life-enhancing power is minimal. Jobs are not fulfilling. Jobs do little to develop or allow the expression of individual talent. Jobs are not life-enhancing. Jobs have nothing to do with human creativity. They can be done with a good grace and indeed it is good for all of us to do unpleasant but necessary tasks at times. And those doing them should be properly rewarded and valued. But there is more to human life than spending one-third of one's waking hours in drudgery, in exchange for a minimal reward. Aspiring political activists should be raising people's sights and exhorting them to aspire to something better.

Work and jobs are not quite the same thing. Work is of the highest value. As St Benedict expressed in when writing his rules for monastic life, "Laborare est orare" - to work is to pray. Everyone needs to work as that is our means to a livelihood and mutual care, and most people's mode of self-expression. And whilst a job is not a natural human right, the means to a livelihood most certainly is. Furthermore, work allows the flow of creativity and gives dignity. Where does work come from? It is something that people do, quite naturally. We work and produce things and share them with each other. But in order for work to be like this, everyone needs free access to the surface of the planet and its natural resources. Even for something as simple as being a street musician.

A few simple questions put the matter into focus. "If you are willing and able to work, and people want the things you make, and you still want the things they make, what it is stopping you?" And as for jobs, the question is "Is it really the job you want? Or the wages? Don't we really want to minimise jobs and maximise wages?"

The wages are what satisfy us, not the jobs. Without the wages who would take on a job?

It is depressing that a rising political leader has nothing better than this with which to inspire those he claims to lead, and is stuck in the mindset expressed in the slogan "Give us jobs!" Or could it be that he really views his followers as lumpenproletariat?

As a postscript, one of our members, Robin Smith, sent me this

The pain on the high street

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Empty shop in Brighton's main shopping street

An editorial in the Guardian today refers to the failure of major retail chains and the increasing number of empty shops on Britain's high streets.

The retailers referred to were all part of the froth economy and it was inevitable that they would fail when the going got hard. Some, perhaps most, had failed to keep up with changing tastes. However, the fiscal incentive is to keep vacant premises empty. In the absence of proper LVT as the Campaign advocates, what is needed is legislation to ensure that
  1. 100% rates are payable on vacant business premises
  2. Constructive demolition (ie to reduce rates liablility) is treated as tax evasion and ratesĀ  continue to be payable at the old valuation.
  3. Upwards only rent revision clauses are null and void.
This would force rents down to market-clearing levels and ensure that landlords brought vacant premises into use at realistic current market rents. But none of this is going to happen. On the contrary, government thinking is in precisely the opposite direction. This will prolong the recession. Real rents will eventually fall, but this will be due to inflation, which appears to be the policy of both the Conservative/LibDem government and the Labour opposition. Thus, rather than take steps to remove the present dysfunctionality in the property market, the favoured strategy is to punish the thrifty and prudent by destroying the value of their savings.

Damning European Court of Auditors Report

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Andy Wightman has picked up this and reports it on his blog.

The European Court of Auditors has just published a damning report on the Single Payment Scheme which was introduced as part of the 2003 reform of the Common Agricultural Policy (ECA Press Release here & BBC report here.).

It is my view that this kind of thing comes about as much through ignorance of the laws of economics as from corruption. Applying what we know, this and more was entirely predictable.

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