Killer Arguments Against LVT, Not (451)

Sobers, arch-Home-Owner-Ist and a reliable source of flaky KLNs on KLN#448

“… giving the State the power to determine who occupies a piece of land (which is what LVT does, it makes the State the effective landowner and the nominal owner the tenant) means that if it wants to the State may remove any or all owners from their land by the simple expediency of increasing the ‘rent’ until it can not longer be paid.

The proponents of LVT should be open and honest about what they want – all private landowners to become tenants of the State, liable to eviction if they don’t pay the rent.”

Ignoring the facts that a) he assumes democracy will be suspended and reversed, against all historical trends, and b) land and building owners are expected to pay for their own utilities, repairs and insurance, so it seems perfectly reasonable to expect them to pay for the public services they receive…

… tax and spend is about numbers and logic, so let’s do a simplified example and compare and contrast.

In an average area, public spending costs £10,000 per home per year and generates a site premium of £10,000 per home per year. Let’s look at two tenants and one non-taxpaying/non-working owner-occupier* in Sobers’ perfect vision of society. The tenants are paying £10,000 site rent and the owner-occupier is paying none. The cost of public services for all three households is £30,000, so each tenant has to pay £15,000 in income tax on top of £10,000 rent each.

The two tenants are paying £50,000 in income tax and rent and are enjoying public services/location value of £20,000 so they are down by £30,000.

Where does the £30,000 go?

Their landlord is collecting £20,000 in rent, on which he pays very little tax, and the non-taxpaying owner-occupier is enjoying public services/location value of £10,000 which the tenants have paid for.

In Sobers’ Utopia, the landlords “have the power to determine who occupies a piece land, which they can remove by the simple expediency of increasing the rent until it can no longer be paid”**. The Home-Owner-Ists are open and honest about what they want – for all wealth creators and taxpayers “to become tenants, liable to eviction if they don’t [hand over half their output and earnings in tax and] rent”. Two strivers are expected to expected to support three spongers.

Even in Sobers’ imagined non-democratic dystopia, the evil State would be charging 250% LVT before the wealth-creating tenants are noticeably worse off. The landlord is serving no useful purpose, so let’s not shed a tear there. If Sobers wants to argue that the two working tenants/recent FTBs should chip in £5,000 income tax each to pay for the non-working owner-occupier’s public services, well fair enough, but that would still be a massive improvement on paying £15,000 income tax each.

* Quite where the non-taxpaying/non-working owner-occupier gets the money from to pay for food and utilities and so on is never clear in his examples. Let’s ignore the majority of taxpaying, owner-occupier households who are being taxed stupid on their output and earnings but receiving public services/location value worth a similar amount.

** Quite why rational landlords – or a rational, democratically elected government – would do this is never made clear.