Property is theft!
January 22, 2013 1 Comment
There is an interesting article in the New Statesman about land value tax (What’s the justification for a land value tax?).
The clamour (if a few lefties arguing for it can be considered such) for this new tax is, to be put it simply, because to fund public services one has to find ways to fill the coffers of the Exchequer. Land value tax, it is argued, is fair. Justification comes in many guises, and the New Statesman article argues that since all land originally had no owner, ownership has since been acquired from what can loosely be termed as common ownership.
‘Acquired’, in the context of this discussion, is a loaded word. One can imagine Rooseveltian diplomatic techniques coming to play, and re-visiting the concept of manifest destiny. However the arguments about acquisition, land now acquired could be taxed.
Is it a fair tax? Is it simply constructed? The answer to the second question is an almost certain ‘no’, and if there is one criticism of our current taxation system that really does stick is that it is overly complex. Complex equals difficult to understand (and hence a whole industry – accountancy – justifies its existence), and this leads to complaint. What is not simple cannot be seen to be fair, and lends itself to all sorts of loophole finding.
A simple land value tax, one that is based on a set charge per acre, must have parameters that take account of location, land type, and somehow accommodate high-rise living.
This would be a largely theoretical argument if all income was through PAYE. Direct taxes are fair taxes.
What has become increasingly obvious is that as the global village has evolved so have global solutions to tax avoidance. The very rich can shift their pots of gold to wherever it is less prone to tax. If land was taxed I could envisage all sorts of solutions, including avoiding land ownership, becoming another weapon for those who see themselves above taxation. What we really want is an end to tax havens.
I suspect the rich getting away with it will not be the strongest driver for change here. I suspect that a simpler, and more transparent, tax system provided with any land value tax would enable its smooth introduction. For every Sultan of Brunei there are millions of home owners and council tax payers who will worry that a land value tax will be an increased burden for them. Solve that and making the very landed contribute more fairly might be possible.