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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 is the big deal with LVT?

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The UK already has LVT now, in the form of Council Tax and the UBR. We are simply arguing that, to start with, the present system, which is messy and inefficient, needs to be tidied up. Why does everyone make such heavy weather of this, including LVT supporters?
 

Higher stamp duty puts damper on luxury market

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Sales of luxury homes in London have dropped following the stamp duty changes in March. The expected increases in revenue are not materialising. Sales of homes worth more than £2m – the threshold at which the levy rises from 5 to 7 per cent – are down by 24 per cent in the four months since the budget. Sales which would have been at £2m and a bit have now been renegotiated to a bit under, according to one London estate agent.

Why is this a surprise? This is what happens when unprincipled taxes are applied. What is the principle behind stamp duty? Why should people become liable for tax when they sell a property? There is no justification for this charge other than to cover Land Registry costs. Here also is a good illustration of the tax incidence principle. The buyer pays, but the incidence of this tax is on the seller. To raise increase stamp duty was to compound the idiocy and demonstrated the Chancellor's economic illiteracy. It must make also one question the wisdom of the Office for Budget Responsibility as well, who approved the changes.
 
FT article

 

Keep the suggestions coming

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Some ideas for a change of name. Here are a few that have turned up...
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Land Value Tax Bill by Caroline Lucas: debate rescheduled to 26 April

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The Private Member's Bill tabled by Caroline Lucas, Green Party MP for Brighton Pavilion was due to have been debated on 1 March but for some reason was not. It is now scheduled for debate on Friday 26 April. The wording of the Bill is to "require the Secretary of State to commission a programme of research into the merits of replacing the Council Tax and Non-domestic rates in England with an annual levy on the unimproved value of all land, including transitional arrangements; to report to Parliament within 12 months of completion of the research; and for connected purposes."
 

Tax avoidance - the posturing continues

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People who pay cash in hand to tradesmen are “morally wrong”, damaging the economy and helping tax evaders, Treasury Minister David Gauke has warned. The report, in the Daily Telegraph, has produced over three thousand comments, nearly all of them hostile. Meanwhile, over at the Guardian, veteran warhorse Polly Toynbee has been sounding off about changes to the Council Tax benefit arrangements, but "forgot" to mention that the Council Tax is already heavily loaded against those who live in lower band accommodation, is based on hopelessly out of date valuations and in need of reform. At least it helps to support our case that the tax system is rotten through-and-through, but it is all posturing.
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Massive capital flows to tax havens

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Göteborg Hamn

New research for the Tax Justice Network campaign group – sifting through data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and private sector analysts, shows capital flooding out of countries across the world and disappearing into the cracks in the financial system.

So what has actually gone offshore? Has this capital been sent out by the shipload? Are these containers filled with bundles of high denomination banknotes? Have giant ports been constructed in places like the Cayman Islands to handle this huge flow of goods? Are there secure guarded warehouses full of gold bars, jewellery, machine tools and old master paintings in these tax haven islands?

Of course not. Most of these assets remain exactly where they were to start with and what has been squirreled away are paper and electronic claims on wealth. And wrapped up, and at the core of most of these assets, is something very tangible and immovable - real estate ie land.

Which is easy to tax unavoidably given the will. Unfortunately people like John Christensen and the Tax Justice Network do not want to recognise the nature of the problem, possibly because they have too much intellectual capital invested in their thinking.

 

In the spirit of open discussion - not

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I see that Tax Research is doing a great job in promoting free and open discussion. I received a reply in response to something I had sent to Richard Murphy, reinforcing a point he had made on VAT fraud. Back came this response. Just like this
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