Killer Arguments Against LVT, Not (444)

Back to the tried and tested: “But land doesn’t generate income!”

The traditional rebuttal is that if you own your own home and you could rent it out for £10,000 but prefer to live in it, then clearly it is generating value worth more than £10,000 to you personally, or else you would rent it out, rent somewhere cheaper and pocket the difference. And try telling that to 1.4 million private landlords in the UK (the group which campaigns most solidly against LVT).

“But I’ve paid for my land out of taxed income”

Maybe you did, but that’s all in the past. The point is that the UK government spends at least £350 billion a year on public services which increase rental values. Somebody has got to pay for that, and at present, most of that is paid for out of taxes on output and employment. An LVT is just a pro rata contribution towards that £350 billion, like a service charge.

I might as well give a counter example that I paid for my cars out of taxed income, without expecting all the repair and insurance costs to be paid out of taxes on other people. So why should non-landowners be forced to pay for things which only benefit landowners? If non-landowners want to benefit from all this, they have to pay rent for it (i.e. pay for it twice).

“What about ability to pay? What’s wrong with taxing higher earners to pay for services which benefit lower earning homeowners?”

Nothing wrong with that at all in principle, but why focus redistribution from higher earners only to lower earners who happen to own land? What’s wrong with universal benefits/redistribution (or indeed none at all)?

And, given the actual distribution of earnings and concentration of landownership, the overall redistribution is not downwards but upwards, from the majority working population (all but the lowest earners make a small net contribution) to the minority who own the most land (by value).

Of course plenty of the working population are also home-owners, in which case it’s not redistributive at all (hooray), a tax shift just means that they pay directly rather than indirectly for the value they receive qua landowner.