A homeopathic dose of LVT

Saturday, 23 July 2011 15:24
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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.
 

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