I have found a redeeming feature in the Mirrlees recommendations.
They suggest the abolition of stamp duty on sales of domestic housing and the abolition of council tax.
And they suggested its replacement by a land value tax.
As far as I can tell this was the one coherent, progressive and logical moment of this whole morning and the only one that showed that the command of capital does create an obligation to pay a greater amount ion tax than those who do not share that extraordinary benefit.
I make the point deliberately: I am not being churlish about Mirrlees for the sake of it. I am being critical because most of what was said was logically inconsistent, ideologically driven and regressive in its nature, and I think, intent.
There is a strong case for an alternative review of taxation to counter Mirrlees from the left. And soon.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Even this has one potential flaw. Council tax is administered, collected and spent by local government. Who is going to set land value tax – and more importantly, who gets to collect it and make decisions on how it will be spent?
@James
you are right. This does, of course, reduce local accountability. And that is fundamental to local democracy. Do you honestly think something like the Institute of fiscal studies would be worried about that though?
@James. It would be quite easy to maintain local democracy with LVT, although not totally fair or efficient (nevertheless far more fair and efficient than CT). The first step is for the land to be valued – totally feasible – other counties manage to do this on a regular basis. Councils then set the rate according to how much they need to raise in order to replace CT. A small problem lies in the fact that LVT is payable by owners and not all residential land is registered. However if the owner is not known the bill is sent to the occupier who would then pass it on legally to whoever he pays rent to. And after all, councils must send the CT bill to someone if the house is unoccupied.
If the Councils were sensible, they would then lobby to be able to collect LVT from all the unused land in their domain – thus forcing the owners to use or sell up: good economics.
I agree with Carol – there is no reason why LVT couldn’t be levied on a local basis.
Local accountability is shockingly poor as things stand anyway. Eric Pickles, surely the most authoritarian and unpleasant minister since records began (and there is stiff competition in the current cabinet – for example Osborne, Jeremy Hunt, Micky Gove etc.), is forcing councils to slash their budgets while imposing a council tax freeze so they can’t raise CT to meet the deficit. How’s that for local democracy? Dictatorship from the centre, it looks more like.
Richard,
I don’t want to worry you, but I agree that scrapping stamp duty and domestic housing and replacing it with some form of land value tax would be a good move.
And I was disappointed that the Mirrlees review didn’t propose to charge CGT on residential property.
Richard, I have just read the section on land and property taxation and can say that you are not right in saying that they recommend replacing Council Tax with LVT. As we were led to believe by IFS, they are recommending the abolition of Stamp Duty Land Tax and Business Rates (NNDR) introduction of LVT for non-residential (including, surprisingly, agricultural – though I’m disappointed they don’t have anything to say about the benefits of this measure – and there are many). I’m afraid I don’t fully understand what they are suggesting for the replacement of Council Tax. They seem to be suggesting that this is a compromise, because of political cowardice, because it is based on property value, not land value alone. (They do rightly point out that taxing commercial buildings is particularly ridiculous.) However, the distinction they make between owner-occupied and rented houses seems unnecessarily complicated to me. If the bill is sent to the owner (as it would be under LVT) then surely that is all that’s required. This used to be the case with the old domestic rating system – and in fact I don’t know why they don’t just recommend reviving that that – it was a whole lot better than Council Tax.
If anyone is interested in the practical implementation of Land Value Taxation, I recently wrote a report for Scottish Green Party MSPs on the topic. It is easy to read even though it is full of figures. Download at
http://www.andywightman.com/docs/LVTREPORT.pdf
@Carol Wilcox
That’s how they represented it
They did admittedly give it another name
but they said it was LVT for business property
Increasingly I feel there was a lot that was said today that was dishonest – or at the very least spin
I pointed out some logical conclusions of what they said when I was there and they flat denied what they’d just said
It’s obvious the misrepresentation was endemic