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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.


Liberals' well-deserved battering at polls

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The Liberals' battering at yesterday's election should give LVT supporters no pleasure, but it is well-deserved. Given the first serious taste of government since the end of World War One, they failed utterly to present the party's distinctive philosophy. LVT, together with free trade, was an important component of that. Even today, two members of the cabinet claim to be LVT advocates, but not one word have they uttered on the subject since they came into the government. This is the more shameful since LVT is an essential ingredient in any programme of economic recovery.

It seems as if the Liberals lost their soul when they merged with the Socialist-lite Social Democratic Party in the 1980s, but this would probably never have happened if members of the party had not, long before, forgotten what the Liberal Party actually stood for. Over the decades from 1950 onwards, its intellectual quality degenerated as it turned into little more than a party of compromise occupying the soft centre of politics in the middle ground between left and right.

This is not a safe place to be, as it is a requirement that the occupants have no political principles. Without firm principles, any politician is liable to be blown in any direction, depending on the strength of the wind. This is what we have seen.

What are LVT supporters to make of this? The first conclusion is that, in the absence of an improbable break-through, an effective switch to land-rent collection will not happen in Britain for at least two decades. We should therefore stop rushing around and spending time and energy explaining to the Treasury and other officials how it would function. They are not interested and neither is any conceivable government. Nobody in power wants, or has the courage, to upset the huge home-ownerist interest, let alone the banks and the old landowning classes. Even if they had, their understanding is so weak that they could easily be talked out of the policy we advocate.

What we can do, however, is to lose no opportunity for pointing at the inefficiency of the present tax system and the real harm that it does. Above all, we need to work at spreading an understanding of the economic theories out of which the concept of land rent as public revenue arises.
 

Alternative vote - yes or no?

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If there are three factors of production, land, labour and capital, one might logically expect three political parties reflecting these three interests.

Over simplifying wildly, one could say that in the nineteenth century, before labour got the vote to any significant extent, there were two main parties reflecting the interests of land and capital.

Once labour got the vote, the UK saw the rise of a working class party, stiffened by a few middle class intellectuals. But the voting system still leaves only room for two major parties. That is the arithmetic of first past the post, born out by historical experience. Under a constituency, first-past-the-post system a third party will normally be all but wiped-out until it gets around 30% of the national vote. The rise of the Labour Party pushed the owners of capital and owners of land together into the one Conservative party - a situation which does not reflect economic reality, the two interest groups being in a natural state of conflict.

The process was aggravated because workers' parties everywhere were strongly influenced by Marx who put capitalists and landowners in the same group, and also in reality the landowners become important owners of capital even though functionally different. So the business interest was scared off and joined up with the landowning interest even though it made little sense. Thus we see the Conservatives are opposed to the abolition of upwards-only rent revision clauses even though retailers are amongst the main victims.

A win for the Alternative Vote (Yes) could open the door to other political groupings that could present other ways of looking at the world than the received ones. So in the long run it could help change things for the better. With the two party system, political discourse is locked down since both collude in sustaining the false and illusory left/right dichotomy.
 

The dreaded T-word

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Land Value Tax is not a tax, any more than paying to use a car parking space is a tax. It is a payment for a benefit received: the exclusive use of a plot of land and whatever benefits that go with that use. The principle is to use land rent as the main source of public revenue. Yet it has always been referred to as LVT. A point that comes up regularly from some of our supporters is this damages the case. A few suggestions have been made for alternative names, such as location benefit levy, land value charge, land rental charge, etc, but they do not put across the idea that this charge is to be used for public revenue.

Some of the translations of "What is LVT" on this site do not use the equivalent word for tax, but it seems as if we are stuck with it. Or are we? Should we change our own name? And is it such a turn-off anyway? Or how about going for broke and calling ourselves the CAMPAIGN TO ABOLISH TAX - CAT? A nice reference there to our old friend the cat in the tree, and it would give the Taxpayers' Alliance something to think about.

All suggestions will be appreciated.
 

Spare a thought for the poor landowner

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[Photograph by John Digney]

The correspondence in the FT has been continuing, with a letter from a landowner in a National Park who claimed that his estate was costing him money. A response from Carol Wilcox was published - she suggested, in irony, that perhaps we ought to pay landowners and put a few estates up for auction to see if they really were worth less than nothing.

I thought we already did pay out money to landowners, through the CAP, "stewardship grants", etc. One wonders why he bothers, but the most likely reason is that he enjoys his estate, and looking after it is his hobby. It is costing him money in the same way that a householder's garden costs money.

My own (unpublished) response was this...
Read more...
 

Dishonest principles

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One of our supporters sent a copy of our comments on the report of the Treasury Committee Tax Review Inquiry back to the Treasury Committee. It was answered by the House of Commons Committee Assistant as follows:

"The Committee did not give an opinion either way on whether land value tax was worth further consideration. Instead it noted that radical tax changes had been mooted, and drew attention the tax treatment of debt and equity as well as land value tax. Its conclusion was:

"While we attempt to construct some principles to guide policy makers, we recognise that sudden wholesale reform is likely, in some areas of the tax system, to be impracticable. The principles we and others set out can shape the system over the long term. We welcome the fact that tax policy making is currently the subject of considerable analysis and scrutiny, particularly by practitioners. If this can be sustained, there is a reasonable prospect of gradual improvement to the tax system."

"I’m afraid I cannot add to what is in the Committee’s report."

Underneath this polite and complacent language lies a cesspit of intellectual dishonesty.
Read more...
 

Woodland grab - the Great British Land Heist continues

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Private land
Peter Smith of the Wildwood Trust writes, "The recent political turmoil provoked by the Government proposal to sell the nation’s woodland was a travesty of public policy. Unfortunately even though the Government has now ‘U turned,’ the sad fact is it will continue to sell off public woodland, but just at a slower pace. The historical trend of the loss of public land will continue, the taxpayer will continue to be burdened and wildlife will suffer because of the greed of the few. To understand the catastrophe that has befallen us we must first learn of the powerful political and economic forces that have been behind this policy."

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Big Society humbug

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by Henry Law

If "Big Society" sounds like a phrase dreamed up by a posh West End advertising agency, that is because it almost certainly is. Eventually we shall find out which one. I am all for voluntary work, community groups and the domestic economy. The value of their work probably far exceeds that of the formal economy. But the money economy was invented to facilitate the exchange of goods and services outside people's immediate circle of friends. And taxes whatever form they take, have to be paid with real money. Thus this "great society" seems to be expecting people to do for nothing tasks for which they can reasonably expect to be rewarded in some way or other. To say nothing of how their are to survive, unless they have private means.

Of course we know that the government is short of funds, partly because the state is being expected to do all sorts of things that ought to be done by other means, and often not at all. This applies to the large amount of public spending on poverty relief, when such poverty should not exist in the first place.

Paradoxically, given the failure of politicians to do competently what they can reasonably be expected to do, people have come to expect the same politicians to deliver that which lies within the gift of the Almighty. That cannot go on. It is also the case that much of the informal and voluntary sector takes place under the umbrella of religious organisations, and for a variety of reasons, including the collapse of faith, the decline of the traditional family and mismanagement. Within in particular some of the Christian denominations, there has been conspicuous misbehaviour followed by apparent inaction by the church authorities. But the same charges can be levelled at the heart of government itself. Society is indeed broken, and in Britain probably more than elsewhere in Europe.

Parliament is inevitably made up of people just like the rest of us, but even if it were composed entirely of men and women beyond reproach, government cannot do little to mend the damage at that level. Worse still - and this is inexcusable - it will not contemplate doing the one thing that is within its power - to reform the country's immoral and inefficient tax system so that that which is private is left in private hands and that which is public is collected for the public good. What we have at the moment is a double robbery. Putting right this injustice must lie at the heart of any programme for a great society. Big Society - big humbug.
 


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