Danny Alexander has announced a review of business rates to report in 2016. That's a touch optimistic of him: by then I suspect he will have forgotten what Westminster looks like, but that's not my reason for mentioning this review.
My question is how can such a review be started without land value taxation being explicitly mentioned?
The ever-present ability of politicians to miss the point is all too apparent here.
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And the Scottish government is searching for the alternative to Council Tax. But we know that they will definitely be looking at LVT because Andy Wightman is on the commission.
What I hear is that this commission is very much more wide ranging
Which is good news
You are absolutely right. Problem is economists are taught land is capital and so we have land hoarding and speculation along with destructive, avoidable/evadable and unfair taxes. Those businesses that don’t like Business Rates don’t realise that if they are abolished, land values will rise resulting in higher rents and buying price of properties.
I’m sorry – Danny who?
The chance of our craven and cowardly politicians discussing LVT seriously is less than Haley’s Comet passing overhead as I type. The rentier project won’t allow this -the free lunch won’t be over for some time.
The trouble with taxing land and property is that those who own it are highly sensitive to it. On top of that they tend to dominate the ruling and administrative classes. But we are approaching a state of affairs when land taxes may be the only major reliable way of raising enough tax for government to fulfill even its basic duties.
Emphasis has been on small retailers who can’t compete with on-line. LVT is the perfect solution since the value of small shops will fall to reflect that and frequent (cheap)revaluations will ensure that this will continue. Plus the tax is levied on the owner not the occupier – most small businesses rent. It really is a no-brainer.
Replacing Council Tax with LVT is more difficult but see here for the answer: http://www.labourland.org/papers-and-articles/ – second item. Note that this paper is under revision and will be published soon.
If? Danny Alexander has missed the mark feel free to remind him of LibDem Spring conference motion “Strong Economy and Fairer Society”
ALTER’s amendment below to the motion was accepted without a vote.
3. Combating the growing inequality of income and wealth in our society, shifting the overall burden of taxation from jobs and wealth creation by:
a) Reforming Business Rates with a site-value-only levy;
b) Tasking Land Registry with registering the ownership of all land in the UK.
c) Working towards a form of Land Value Tax which would progressively replace other property taxes.
But that is not what was announced
Land value Tax is one of those ideas that has appeal to people across the ideological spectrum, not least because it’s the only tax that has no deadweight loss effects. It would also solve or at least address a number of major problems, including local government finance. Given that this has been a mess ever since the problems were identified by the Goschen report in the 1870s you can see how difficult this is in terms of the politics. My own wish would be that LVT replaced existing taxes rather than being added to them but it would be a major improvement.
LVT has only ever been promoted as a replacement for bad taxes, initially all the current property taxes: Council Tax, Business Rates, Stamp Duty Land Tax, Section 106 Agreements, Community Infrastructure Levy, Annual Tax on Enveloped Dwellings.