Land value taxation is not the panacea that its proponents claim

[@jason_hughston]

Here is Western Australia, a state government department determines the unimproved value of all properties. They are reassessed every 3 years. They have access to the data for all property sales including vacant land. They can also assess the value of the buildings on the land using quantity surveyor data and also the insurance upon those buildings. Working it out is not that difficult if you have the data. Applying a land tax would be relatively simple. The reason it is not applied as LVT proponents would hope is because the people who own most land are politically powerful. As other commentators have said, here in Australia there is slow evolution toward land taxes rather than stamp duty. The main justification is that is provides a more reliable tax base.

[@colinmacdonald1939]

You're not very smart, are you? Idiotic critique.

[@drewcampbell8555]

Kicked off with a straw man, Richard. Few proponents of LVT claim it is a panacea to all taxation ills - very few, in fact. Most advocates see it as a key component of a fairer system of taxation. In Scotland, where I live, there are serious issues around ownership of vast tracts of the country that impact our ability to address the climate emergency (amongst many other issues of exploitation and imbalances of political power). LVT-style proposals are being developed that (hopefully) will be applied to landowners holding more than 1,000 hectares, but linked to their carbon emissions which can be monitored and read from satellites. It's not perfect, but it should have a major influence on landowners' most exploitative, excessive and neglectful land management practices.

[@RichardJMurphy]

I know this is the case in Scotland - but it is not in the centre of cities. There are ample other ways to address this issue in Scotland

[@ChuckY229]

And Scotland is so well governed. Sturgeon, Yousaf etc.

[@schumanhuman]

Oh dear, Richard.... 1 Straw man, no not all wealth is derived from land, according to the ONS 60% of UK wealth is, this would also be extended to large parts of the stock market (REITs, corporate land holdings, bank stocks given most bank lending is to real estate) The point is all of this value is not earned by the title holder , it is all economic rent. Even the most ardent purist Georgists would also add other forms of privilege to the list such as excessive IP rights. 2 The untaxing of labour would result in even higher returns to land, as all things equal higher incomes would raise rent (something JS Mill noted), the point is taxing labour is far less efficient as by hitting incentives to work it creates dead weight losses. To make the case for any other tax, you'd have to show they are collecting some revenue that LVT would not capture without dead weight losses in excess of that. 3 Valuations of land are easier than valuations of buildings which are more intrusive, Zoopla, Right move algorithms already include estimaes of the land value from data, it is the building value you have to adjust manually becuase capital goods depreciate. You rightfully point out how absurd it is to use 1991 valuations for council tax, then basically give creedence to the argument that we shuold never revalue even council tax because like LVT it would lead to complaints about revaluations. If you look at where LVT has been implemented in the US at the local level such as in Pennsylvania, simply by shifting the rate from builds to land (in some places untaxing buildings completely) this resulted in most of households getting a tax cut so guess what, thewy didn't ccmplain, and yes ofc there were some objections from the 25% like any tax shift where there are winners and losers, but where the tax was higher this resulted in more development of sites. The evidence says it worked very well. 'When the people of Allentown voted for the land value tax in 1994, nearly 3 out of every 4 properties saw at least some sort of tax cut. Today, many of the properties that did pay more have new or better buildings on them, stabilizing the tax base to the point where we haven’t had a tax increase in five years. In that time, the number of building permits in Allentown has increased by 32% from before we had a land tax.' 4 Oh dear, this is the worst of all the points. Ironic that you call it stupid. No, long term interest charged does not affect market rent, the only landlords who can raise rent are those who were in effect undercharging before the costs went up. Correlation does not prove causation. Did rents only rise with mortgaged landlords and not those wh oown outright given their costs remained equal? Why wouldn't landlords raise rents if taxes on labour or things they buy went up too? This is attributing some magical power to landlords that does not exist, their capacity to charge rent is determined by the surplus of labour relative to the concentration of the market. LVT especially would not raise the rent, first it shifts the burden from households to speculative owners of vacant land who can olny 'pass on ' the tax by getting a building and increasing supply. It also means landlords with inadequate under utilsied buidlings will have an incentive to develop their property up to standard, increasing supply of housing = lower rents which more than compensates for any raising of rent from landlords who were undercharging the maximum they could have out of inneficiency (they largely do this because the price is rsing so are less worried about yield, landlord charity to tenats is not a good way of relying on lowering rents) 5 Taxes on rental income are decent, certainly better than rent caps, but they do not capture imputed rents so limit their scope by reducin gthe rental market whilst retaining privilege of those who may enjoy the best locations as homeowners - an owner of a flat in scunthorpe enjoys as small imputed rent, the owner of one in Mayfair maybe 50x as much. These taxes like rental caps also have the incentive of creating a blakc market, as Singapore discovered before abandoning them, if you're paying a high tax on rents or if they are capped it doesn't mean the market value for the land is lower, so landlords will fi nd ways for tenatns to pay extra or not declare at al, LVT has none of these issues. 6 Taxes on sales of and and development all carry dead weight losses of making such developments and sales less likely to occur, to claim these are 'better' just because we are used to them is not a good argument. Regions in Australia are shfting away from their stamp duty towards land tax for these precise reasons. 6 'Most people would not understand LVT' So? People also do not remotely undertand the current tax system at all, they just pay it where they cannot avoid it. To use his as an excuse for intransigence when both the theory and practice suggests LVT can work is weak, the true pragmatist would look to finding ways of implementing and moving towards this, not make the 'all very well in theory' argument which itself belies the evidence in the real world.

[@DileepaRanawake]

Excellent analysis- thanks for writing this up

[@johnburns4017]

Excellent post.

[@johnburns4017]

In the late 50s LVT was introduced in Denmark. The results were startling: *Geoism a Proven Success* Denmark prospered under the Geoist system for three years until the vested interest of landowners dismantled the economic system. The Danes, by tradition, recognised that land is common belonging to the people. The rapid industrialisation and land enclosures of the 18th and 19th centuries began in the United Kingdom cascading into Denmark, challenging the tradition of land being common to the people. Land was turned over to industry as Denmark industrialised. *Liberals Adopt Land Value Tax* Farmers were economically pressed in the latter half of the 19th century with many supporting the ideas presented in the book "Progress and Poverty", by Henry George, the biggest selling book in the world after the Bible at the time. George recognised people needed title to land, loosely referred to ownership, however the wealth that soaks into the land giving the land its value, is commonly created and must be reclaimed to fund common services. The added benefits was that income, sales and other taxes can be abolished, making matters simple for tax collection as land cannot be moved, and business as fewer expensive tax accountants would be required. As the economic situation worsened for small farmers, a Georgist movement began with the Danish Henry George Union being founded in 1902. Some of its more active members wanted a higher profile platform for the Georgist philosophy cooperating with other philosophic groups and public leaders in forming the Liberal Party, which declared: *1)* Land value taxation, LVT, (site revenue) should collect all the publicly created economic rent of land for government expenses; *2)* Income Tax to be abolished accelerating the free market and enterprise; During this era, Karl Marx was advocating that the workers unite to fight the desperate conditions of the working people while great wealth was being created through mass production. The Danes took the line of Henry George. Social Democrats were inspired by George advocating in its political manifesto the taxation of land values, known as *_Site Revenue._* *Parties joined to create the Economic Justice Party* Over the next fifty years, not only in Denmark but around the world, there was long and intense debate about liberty and freedom amongst free traders, pacifists, humanists, philosophers and religious institutions. Many of these ideas merged. The disparate parties merged forming the Justice Party, with the aim of gaining seats in the Danish Parliament. The economic policy of the Justice Party was simple, to collect tax only from the values of Land, abolishing all taxes on Labour and Capital. The effect was astonishing and quick for a new political party. In 1952, the Justice Party won 12 seats out of a possible 179. They influenced the appointment of a Government commission for ground rent in Denmark, who wrote a report clearly highlighting and advocating the benefits of site revenue. In 1957 three parties, the Justice Party, the Social Democrats (Labour) and the Radical Left Wing Party (Liberals) formed what was to be later known as the Ground Rent Government, overseeing the most prosperous era in Denmark. The three political parties agreed on the following: *** Collection taxes from the values of land only (using Land Value Tax); *** Liberalisation of trade; *** A tax freeze; It was expected that after the formation of the government, some kind of Land Value Tax would be introduced. Land speculation ceased immediately in anticipation of the introduction of land value taxation. Legislation on the taxation of increased land values was prepared and passed by parliament.The economic effects of the near elimination of land speculation were astounding, arousing much attention. On the 2nd October, 1960, the New York Times headlined, "Big Lesson from a Small Nation." *Prior to the 1957 election* Denmark had: a sizable deficit on her balance of payments, was considerably in debt abroad, burdened with a relatively high interest rate, high unemployment figures and an annual rate of inflation of approximately 5%. From 1957 to 1960, the following improvements in Denmark occurred: *** The big deficit on her balance of payments was turned into a surplus;• Denmark's total debts abroad amounting to 1,600 million kr. were reduced by one quarter to about 400 million kr; *** The rate of interest, and hence mortgage levels dropped; *** Unemployment was replaced by almost full employment; *** Considerable increases in production and wages; *** Inflation was halted; *** All wage increases were real wage increases, the highest ever in Denmark; *** Apart from one tax, no other taxes were levied during this period; *** The country was free of strikes; *** Industrial production rose 32%; *** Investment rose 135%; *** Savings greatly increased, as once again it became profitable to accumulate savings; After three years Denmark had no foreign debt, no inflation and an unemployment rate of 1%, which was considered full employment. So why did this success not continue? *** A minor conflict developed in the use of revenues emanating form LVT. Until 1960, the Social Democrats were advocating LVT to pay for government social schemes, the Radicals and Justice Party advocated LVT for the purposes of income tax reduction. *** Prior to 1960, Georgist beliefs dictated that when a heavy tax is levied upon land values, land prices will decrease. The consequences of full employment, no inflation, no foreign debt, expanding industry and rising real wages however, brought about a great demand for homes and of course land. Enterprise flourished demanding more land. Land prices did not initially fall, as was predicted. In fact land prices rose because of the boom that was created by the introduction of LVT. Although it was predicted that when the economy settled after the transition, land prices would stabilise or even drop. This took the Justice Party by surprise, being unprepared to counter accusations on the transitional stage; *** In the late fifties, the Danish foreign debt was regarded at crisis levels. To assist in reducing the debt the Ground Rent Government levied an income tax as a temporary measure. Real incomes were reduced, due to the progressive nature of income tax on higher incomes. The self-interested wealthy landowners focusing on one temporary negative point confused the issue in the eyes of the public, ignoring the fact that overall taxes were reduced 10%. The general public believed anti-Georgist propaganda that stated that LVT was simply another tax on top of all the other taxes. The landowners had no problem in promoting the now growing belief that the socialists, who were regarded as communists during this Cold War era, wanted to confiscate your property; The 1960 general election, the opposition had the largest budget ever in any Danish election campaign, financed by the Conservatives and self-interest groups of landowner associations. With its limited financial resources and lacking support from the national press, the Justice Party was unable to withstand the unfounded attacks. Opposition against the LVT legislation continued after the election with the new weakened government giving in. Further pressure from landowner associations influenced the repealing of LVT in 1964. *After 1964:* *** The currency surplus became a currency deficit; *** The annual deficit on the balance of payments in 1972 was 3 billion kr;• Debts abroad since have risen remarkably; *** The interest rate rose substantially; *** Land prices rose sharply; *** Denmark's overall land value rose from 17 billion kr. at the assessment of 1960 to 67 billion in 1969, reaching 100 billion at the following assessment in 1973; *** Rents in new housing were six times of 1964; *** The rate of inflation immediately rose from barely 1% to 5-7% being 8.6% in 1965, the year after repeal of the land tax law in 1964; *** Taxes were five times higher; A comparison between the three periods, before, during and after the so-called Ground Rent Government, gives a clear picture of the importance of eliminating land speculation. LVT did that painlessly with effective cascading economic effects. The Justice Party underestimated: *1)* The population was not educated on what LVT was - only a few Danes understood what LVT was and its positive and stabilising effects. Most people were not aware of the positive effects enjoyed because of LVT and that the possibilities in general would improve further when the LVT levy was increased. People in general did not understand that the wealth accumulated in land, crystallising as land values, belonged to them all, with LVT being the reclaim mechanism. *2)* Landowners & Self-Interest Groups Opposed - The extremely powerful opposing powers dominating the public media promoted the misunderstanding that LVT was a tax like all other taxes, not a mechanism to reclaim commonly created wealth. They promoted the notion that only landowners would pay all taxes, ignoring the fact that income and other taxes were abolished or vastly reduced. They emphasised that poor citizens having no or small incomes would see no benefit in a reduction of income taxes. *3)* Land prices rose - This was unexpected, as the Justice Party predicted land prices would drop. The reason why was that Land Value Tax diverted investment from land into enterprise, expanding enterprise, creating a demand for land. The demand for homes also was a factor in rising land prices. When the economy settled after the initial boom, land prices would settle. This was not communicated to the population.

[@NotnotKingofficial]

So a land value tax will be passed onto renters but a tax on rents won’t.

[@johnburns4017]

Landlords attempt get as much rent as possible at all times. What caps their rental is market forces. LVT cannot be passed onto a tenant as market forces come into play as it does right now. They can try and up the rent but they will not have tenants as they will move elsewhere.

[@downshift4503]

@@johnburns4017 Except that tenants will find few places to move to. Same has happened with interest rate rises. Landlord costs rise, costs are passed on and renting has gone up despite people being able to move elsewhere.

[@danksheev66]

​@@johnburns4017The problem with market rate in the landlord sector is it's like an extremely cornered market by landlords, and it's not regulated enough to make the market even remotely fair to the average tenant.

[@schumanhuman]

And why wouldn't a tax on incomes or sales be passed on to renters. Landlords tend to have other jobs and buy stuff no? It's an absurd argument, costs do not determine prices in this way at all.

[@johnburns4017]

@@danksheev66 But the landlord at all times attempts to get as much rent as he can. The implication is that they are not doing that, and LVT would force them to do it. LVT would promote land to be sold to its occupier, eliminating economic parasites - a very good thing.

[@drumstyx]

I just learned about the concept of land value tax, and for each new country I see a video talking about, I like to run some rough numbers: 242,000km² - land in the UK 172,000km² - active farmland -- we tax farmland ZERO, to incentivise farming 70,000km² - taxable non-farmland £1.2T - total government spending at all levels So we need to raise £1.2T from 70,000km² of land, which is about £17.15 million per square kilometer, or £17.15 per square meter. This would replace ALL taxes for everyone. Income tax, VAT, council tax, even congestion charges (which admittedly would probably need a replacement, as taxes have been used as a behavioural disincentive for a long time) The average land plot is apparently (not a government stat) 1/10 to 1/12 acre, so let's call it 400 square meters, towards the high end. The average homeowner would thus pay: £17.15 x 400 = £6,860 per year. Unlike in my USA and Canada calculations, that's quite a bit more than people pay in UK council taxes on average, but with no income tax, business tax, VAT, tariffs, fuel tax. Large estates with land being used inefficiently would be charged more, possibly hundreds of thousands, but again no income tax, no capital gains tax, nada. If big businessman made big bucks to buy a big property, they saved more than enough by having no income taxes to cover the land value tax on enough land to satisfy anyone. Less than £7k per year on the average, and that's just with simple flat taxation across the board, and no tax for farmland. I honestly think that's fair, but maybe there's a way to apply things better scale-wise that I've missed. Regardless, the point is that, in the worst-case scenario, there's no reason land value tax couldn't work as the sole source of revenue, it's certainly affordable for the average homeowner.

[@barerfont]

Richard do you think the massive disparity in the ownership of land is an issue? What would you do to try to address this if not using LVT?

[@DileepaRanawake]

Great question - second this

[@davidmcculloch8490]

George Monbiot wrote a paper on returning land to the commons. It won't happen but I find some logic and social justice in the argument. Property developers also engage in land banking because they can.

[@andyinsuffolk]

To what end and what cost? - Disparity of land ownership is not intrinsically a problem. I do not want my 'fair' share of the land that comes with my 'fair' share of LVT just for the sake of it.

[@andyinsuffolk]

@@Vroomfondle1066 - That's your problem, I'm an (ultra) democrat. The political rulers are always throughout history the main disruption of economic abundance -- not the mega rich. Henry VIII or Starmer we have to serve them first and that is VERY expensive.

[@RichardJMurphy]

So are you planning to appropriate land? Yiu think that rates at that level would be affordable for everyone else? How? Or might better taxes on land transfers be better at achieving this goal? I suggest they would be

[@marcusmoonstein242]

Wow that's a lot of information gone over very quickly. But let me (as a LVT true believer) help you out. 0:41 No, not even LVT enthusiasts such as myself believe that all wealth comes from the land. We actually believe that wealth ultimately comes from our labor, since the other factors of production (land/capital/natural resources) cannot be converted into wealth without labor. However, we also believe that the fruits of our labor belong to us and therefore taxing those fruits is legalized theft. To emphasize this point: taxing our incomes is literally theft. But since the land (and the mineral wealth it contains) was NOT created by anyone's labor they should belong to us all. Therefore charging someone a tax/rent to have exclusive use of what is actually a communal asset is seen as fair. Hence LVT is the fairest tax. 1:06 No, it's not that we think we don't need to tax labor. It's that taxing labor is unethical. It goes back to the principle that you own your own body and mind. You therefore also own whatever you produce with your body and mind i.e. the fruits of your labor. Taking the fruits of someones labor without their consent is theft, and therefore income taxes are theft. The only reason it's not legally recognized as theft is because the government writes the laws, but from a moral perspective it definitely is theft. 1:18 Yes, we do have the secondary agenda of reducing government revenue. "Starve the beast" as we say. Politicians will tax and spend without limit unless we (the people) stop them. If politicians could tax 100% of what we earn they would definitely do so (and then they'll still complain that it's not enough money and they need to borrow to balance the budget). 2:08 Yes, in order for an LVT to work we do need an up-to-date record of all current land values. 3:14 Yes, pure land value is more difficult to calculate than traditional property value. But as someone who has worked as a property valuer I can tell you that there are multiple ways of estimating land value with reasonable accuracy. One of the easiest ways is to take the total property value and subtract the depreciated value of the buildings to get the land value. 3:39 No. I actually found LVT easy and intuitive to understand, and I don't see why other people would struggle. The reality is that you don't own your land. The government owns all the land on behalf of the people and you are paying rent to use a piece of it. If people can understand something as arbitrary as vehicle depreciation allowances they will understand LVT. 4:30 Yes, the LVT would need to be high if it was the only source of government tax revenue. BUT remember that the LVT can never be higher than the real rental value of the land, or otherwise people simply won't want to pay the tax to have exclusive use of the land. This puts an automatic upper cap on the LVT tax rate the government can charge.. 5:00 No, definitely not. As a landlord myself this is a very common misconception that I see all the time (that the landlords expenses influence the rent the tenant pays). Landlords always charge whatever rent the highest paying tenant is willing and able to pay. Any additional expenses that come up later will ALWAYS be paid by the landlord because the rent simply cannot go any higher. If the expenses exceed the rental income too often then the landlord goes out of business. In reality an LVT would only reduce the resale value of a property because ownership expenses will be much higher, and so potential buyers will need smaller mortgages to offset that. The tenants will still continue to pay the current maximum they're willing and able to pay. 5:52 No, a surtax on rental income would not work in the same way a LVT because it would exclude owner/occupiers from paying the tax. None of the other taxes you mention would work in quite the same way as an LVT either. Very interesting video. Thanks!

[@peetasmith4403]

Land (and all monoply) and externailty taxation, as best can be achieved, is the unversal panecea you do not recognise. Land valuation can be easily assertained - as extensivly reserched and practiced.

[@jontalbot1]

I heard a spokesman from the NFU on the Radio 4 farming programme this morning again dismissing the evidence on this by citing ‘research’- needless to say without attribution. After years of listening to the NFU l lost all respect for them. Any organisation prepared to lie for what is clearly a political campaign has no credibility.

[@bigsunflower88]

The state of Baden Wurtemburg in Germany is about to introduce a 1.3% land value tax next year. Though you may believe it is impossible to implement clearly at least some German politicians disagree. Time will perhaps tell who is right.

[@xtc2v]

15% tax on rental income will simply be passed on to the tenants by the agent as just another overhead of running a clients property portfolio. Taxes on shelter should be as light as possible as it is an necessity.

[@arkatub]

Rental income is already subject to income tax which, as you say, is passed on to tennants, this obviously creates a lot of poverty.

[@euanstokes2828]

In doing so, raising rent would be a landowner acknowledging the land is more valuable, thereby raising taxes on themselves. Its therefore very difficult to pass on to tenants. Even then, if it were passed on, it'd be being paid by tenants who are no longer paying any other tax, no VAT, no Income tax etc, so it wouldn't be as much of an issue.

[@xtc2v]

@@euanstokes2828 If there are no other taxes being paid what you are left with is a massive tax on trying to put a roof over ones head. Doesn't sound right somehow.

[@euanstokes2828]

@@xtc2v the theory of LVT as written by Henry George argued for a single tax system, even if you don't agree with that, the revenue from LVT can still partly replace other taxes, so this remains true. Its not a 0-sum game. Also, Land Value Tax expressly doesn't tax the value of a property, only the value of land. Individuals and businesses need not worry, it would essentially just be a new form of council tax or corporation tax. The only people who need to are a) those with valuable land they are under-utilising and b) landlords, who add nothing to the value of what they provide in most cases. So yeah, this is designed to harm landlords and that's a good thing.

[@xtc2v]

@@euanstokes2828 The rich invest in woodland especially in Scotland. I assume woodland will not be classes as under-utilised or all the trees would get cut down to save tax? Basically taxes should be raised on unnecessary or damaging expenditure like fags and drink or second homes. Most land makes money by intensive agriculture so only rocky and steep land would come under your tax. Its a tax on Welsh sheep farmers!!!! Under-used land is very rare so revenue would be tiny in the scheme of things

[@andrewphilip3308]

It is better called site-value taxation. I've lost confidence in Mr Murphy. He hasn't bothered to look into this properly. In Lipsey's Positive Economics, Lipsey has a section explaining that while the theory is sound economics, it would never be able to raise the sums needed by modern government. There was and perhaps still is a cultic streak among some proponents of Henry George's idea but that doesn't mean anything except that p[eople get bees in their bonnets. The point is that, among taxes, this has a claim to be the fairest. George noticed that as America grew, no-ne would accept wages less that what could be earned at the margin - the frontier. Once land was fully enclosed, there was no margin and wages fell to least people would accept. Site value taxation was a way of restoring a margin as it bore down upon a value which was entirely created by the community. No need to say any more as the comments here are well informed.

[@adenwellsmith6908]

How's the RSPB going to pay its billions? Same for the MOD?

[@dennismccarthy7032]

@@adenwellsmith6908 exactly, the same goes for farmers ,a fair amount of whom are hard pressed to make any money at all, and now the could be faced with another bill , which could push most of them into insolvency.

[@adenwellsmith6908]

@@dennismccarthy7032 It's the plan. Forrest commission. Another.

[@ster2600]

Obviously you can give exemptions to charities which preserve land

[@ster2600]

MoD should pay up

[@adenwellsmith6908]

@@ster2600 They are hording land. Tax em. They aren't using the land effeciently. Easy to do. Get planning permission on their land, they have to pay the tax. Of course they go bust, state then owns the land so the state pays the tax.

[@ajn2370]

Perhaps the simplest way for a government to implement Georgism would be to abolish freehold. All land would be owned by the state with only leases available for private ownership. The land tax could then be the ground rent. There are still issues. Somehow, farmland has to end up costing less per acre than brownfield sights. Perhaps the value of the leasehold could be useful there. Rackrents could have their uses too. This isn't a totally mad conception of land ownership but is definitely far from most British people's understanding of property rights. Clearly this would not be undertaken by anything other than a very radical Georgist government; it's not a simple tweak of the current system.

[@xtc2v]

Farmers do not pay any business rates on their farm land and they can pass on their farms to their children free of any inheritance tax. Who else gets advantages like this for their business?? Totally unfair

[@johnburns4017]

It all should be removed. LVT would promote owner/occupying of farms, eliminating tenant farmers.

[@johnburns4017]

@@PhilipMatthewsPAEACP Tenant farmers pays *rent* to a landowner, even if he makes no money.

[@johnburns4017]

@@PhilipMatthewsPAEACP When the USSR was breaking up a team of adviser, US and UK, went to Russia. They pleaded to them not to sell off land, but lease it. The greed of those in high levels prevailed as it was being carved up. Having all land leased by the government is the best way. Land was given by nature not man. Its value is fully location dependent. But the next best way is Land Value Tax. By its nature it will naturally redistribute land ownership. Harmful land speculation is eliminated, housing will be stable, with no bubbles, amongst other side benefits, like elimination of Income Tax.

[@xtc2v]

@@johnburns4017 Exactly, rent is not based on the ability to pay so it would be unkind for the government to grab an extra 15% for themselves. The left is not known for kindness

[@xtc2v]

@@johnburns4017 The USSR needed a marshall plan to cover the cost of development as it was broke. The US never wanted to help Russia but to divvy up its resources like they did in Ukraine after getting their US puppets in power

[@cillianennis9921]

Its not to tax the land only. Its to tax the land mainly. The land is the main provider of value to well property. Which explains why somebody can buy a property sit on their ass for a few years & sell it off for profit because the neighbours have been doing the labour that improves the property value by land. So if you don't tax the property value & instead only tax the land you basically encourage the people who buy the land to invest in it so somebody will buy it later. When it comes to factories you basically are making them not ruin the land because well they ruin the land & then nobody can use it so its got no value. You'll still tax the labour but you can do it less removing the burden from the workers & then you are mainly putting it on the companies who can't just decide to move to another country to avoid these taxes as they aren't directly on the business but the land encouraging the business to improve the worker ability to produce stuff for them to benefit.

[@dennismccarthy7032]

The mechanism paving the way for a corporate land grab , mainly from farmers , control of the food supply etc?

[@dennismccarthy7032]

@@RobinHarris-nf4yv explain

[@ster2600]

If the land can't be developed on, it won't be worth much. We can introduce rebates for land management and maintenance. If the land could be developed on, and it would be worth a lot of money if it were, we should let that happen, not prevent construction for the sake of low-economic value farming

[@schumanhuman]

70% of UK land is rural but it's land value is only about 2% of the total, farmers would not be pushed off their land by LVT, it would help tenant farmers acquir land cheaper to compete with esblished landowning farmers.

[@johnburns4017]

@@schumanhuman Only *7.7%* of land in the UK settled. The place is empty.

[@schumanhuman]

@@johnburns4017 Yep, LVT would preserve more green space by reducing urban sprawl too. Farmland prices are pushed up by speculators hoping for rezoning gains.

[@euanstokes2828]

2:25 yeah if we implemented an LVT we'd need to keep more accurate track of Land Value, I don't think this is in dispute. 3:50 so? I'm pretty sure people understand that land in cities is worth more in rural areas etc. I've had no bother explaining this concept before, and its not like there arent appeals over things like council tax etc all the time. 5:00 Land Value Tax attributes to the value of the land everything about a property other than the property itself. Thus raising the rent on a property without changing it is acknowledging that the land is more valuable, ie raising taxes on the landlord themselves. Also, even if it did raise rents, the renter would have no issue paying since LVT is supposed to replace other taxes. I'd add that making buy-to-let harder isnt a side effect of LVT, its the desired effect, the hope being that this will allow more people to own their own homes, and renting will go from being the standard mode of living to a choice made for convenience. 5:50 so your plan instead of an LVT is to tax renters who already cannot afford to own their own homes? That sounds plain evil. 6:20 This would have the opposite effect of an LVT. An LVT seeks to capture value from land without discouraging development, this just makes even less incentive to change the built environment at a time when its almost functionally illegal to change the built environment. 7:00 Again, I've had no issue explaining an LVT to anyone I've tried to. Your also acting as if some countries dont already have one and it works fine.

[@malcolm8564]

Land tax means increasing the cost of food and increasing food imports.

[@robinpetty3180]

From somewhere on the Wirral I can hear Half Man Half Biscuit singing 'Irk the Georgist'..

[@titusjames4912]

Is it possible for labor to produce anything without resources?

[@12theotherandrew]

Land value tax might have worked for William the conqueror.

[@johnburns4017]

It works for Singapore, Hong Kong and Taiwan, economic powerhouses, to name a few.

[@johnburns4017]

@@PhilipMatthewsPAEACP All land needs taxing on its value. LVT cares nothing about who owns it.

[@commentarytalk1446]

You're right: the current tax bands for properties are already odd and land tax would just compound that. Agree, increase tax rate on renting is a better solution. Easier and more transparent/measurable for value generation off the given land USE itself.

[@schumanhuman]

? The current tax blocky council tax bands were a reversal of the more fair and LVT like 'rates', how would returning to the previous system of rates be a compounding of what is really crap about council tax? You could just increase the number of council tax bands and remove the cap and it would already be more like LVT or rates. When we had rates we also had huigher taxes on rental income too, it's a continuum but LVT should be the gold standard as it has none of the issues of taxing rental income or property sales.

[@commentarytalk1446]

@@schumanhuman My take on this subject is very simple and perhaps limited however here goes: In my experience of the past 30 years the housing market in the UK has become financialized ie house/land asset value + renting value = total price which is thus inflated massively. Namely renting taxation will be a system that angles at market conditions and should vary with them and this is a major problem in the UK. Disadvantage is rents will go up but then I think ultimately government is going to end up controlling the rental sector so that fits that outcome politically as well as economically. As the video suggests LVT is an idealism that's not realistic. I don't know if you agree with the above or not but I hope it's clarifies my support of the video's view in my original comment?

[@schumanhuman]

@@commentarytalk1446 'Disadvantage is rents will go up' Richar's error was claiming LVT would like ihigher IR's (also largely a false claim mistaking correlation for causation) be passed on as higher rents rents but then not applying the same logic to taxes on rents (or any tax for that matter, if you raised VAT wouldn't landlords want to pass on the cost as much as any other tax?). At least you are more logically consistent, but still wrong. Ceteris parabus rents will not go up if rents are taxed either through LVT or taxes on rental income. Landlords will usually already charge as much as they can regardless of costs. If they're not they are charging some form of mates rates or just too lazy because they are more worried about capital appreciation than rental yield, relying on this for a healthy rental market is not a good idea, much better they chase yields by competing with good services as a building manager (labour) and allocator (capital). Niether a tax on rental income, higher mortgage rates nor a land tax will increase tenants surplus wages from which prices are derived, so the costs will be 100% swallowed by the landlord over the long term. Read up on 'Ricardo's law of rents' for a detailed explanation of how market rents and the marginal price is determnied. LVT especially will not raise the rent at all, by falling more proprtionally on vacant and under utilsed land and incentivising more supply, just the opposite. That is why it is vastly superior to taxes only on rental income which may lead to less supply.

[@jonb5493]

Land Value is readily, and fairly, open to assessment. Some of RJM's arguments are just silly, apart from being straw-men.

[@danksheev66]

Georgism always felt like it was full of holes, it does talk about LVT as if it was a silver bullet when in reality policies are far more efrective when part of a hollisitic policy approach.

[@johnburns4017]

Few holes in Georgism. Modern version are to charge for all commonly owned resources not just tax land values. BTW, what I earn productively is mine and no one else. But HMG can look into my personal affairs, when no criminality is there, which they should not be able to do. Should be in a written constitution.

[@mnh31113ah]

Cancel tax should be paid by homeowners in all instances. It would be a lot easier to collect. Of course landlords would have every right to pass it on to their tenants and they'd still squeal about it.

[@briankerrison8504]

Nope..as it’s only apart of the economic equation.. & a percentage SDLT..is supposedly to help build affordable housing.. or even purchase land or reclaim it.. 🤔🤔😎

[@Jaymark-gk4li]

Well put 👏 👌

[@sicko_the_ew]

I suspect that I might be a bit of a crackpot (and, if not that, then at a minimum I'm about 99% uneducated when it comes to this kind of thing), so if you do waste some time reading further please be ready to "get what you paid for" - with that genuinely valuable time of yours. OK, here goes: How about a gradual (partly to make it reversible if it turns out to be stupid idea in practice even if one day approved by the wise) nationalization of "fixed property" (such as land, houses, leases etc), _with full compensation_ (another reason to be gradual), then having the state take over as landlord of those "fixed assets" (trying for generality here - maybe a farm, maybe a fishing rights lease, maybe a family's home). Detour into the compensation: I like the idea of an "active investor bond" that can be turned into something like a real labour-employing enterprise - maybe even specifically geared to favour employment in times of high unemployment. Anyway, I get even further out of my depth here, so might as well stop before the water hits my nose. Pick a segment of the "real estate investment" sector of the economy that offers high rent to price ratios, gradually take that over by nudging the investors involved to change their investment portfolios to include more things like vaccine labs or nuclear power stations etc, and then try to use the rental profits to erase the lowest income tax bracket over time. A detail when it comes to peoples homes that seems to me essential is to offer a lower rent to someone who regards the place they're in as Home (so, approximately, the current long term occupier). And so on, and so on, to the point where this might start becoming to complicated to understand from what we can know today. In principle, in the end you'd have everyone being a tenant (maybe with increasing security of tenure just by long tenure - since the landlord gains the option of being humane in this system.) Benefits? Well you could drop the idea of "planning permission" from the places taken over, which cuts a whole load of bureaucratic crud as far as future development goes. And if you manage to eliminate a few income tax brackets, you'd get rid of that bureaucratic overburden, too. (This is in addition to various extensions of the idea that the landlord gains the option of being humane, but that's not directly good for the economy/ social efficiency). I suspect that if you took over all land, if you put out tenders for development of new mansions you'd get stuck at the "proposals to let new development" stage. It's only where a house can be used to make more of what you have be just for you - regardless of what actual value for money you get - that it makes a kind of sense to kit it out with additional empty rooms, or nearly empty rooms used for doing nearly nothing. If it came down to a a normal value-for-money decision, most people wouldn't bother with that billiards room, for instance. If they had to pay a better than break even (for landlord) rent on it, they'd skip it. Doesn't matter if I'm right or wrong about that. If there's a good market for billiard rooms - with good rent for investment returns, that's great. Let there be a billiard room over every rose garden, if it comes to it. Anyway, I've probably said much more than enough, now, so better shut up.

[@ooo-vc4xl]

The issue with a tax on the rent is that it would be passed on to the renter and renters tend to be the poorer in society. To add this tax fairly would require welfare and bottom end tax adjustments.

[@johnburns4017]

Very wrong.

[@FONASDeadlock]

There's no reason that council tax isn't revalued when a change of ownership takes place resulting in an increase. This is already reported to the Land Register. When a building warrant is applied for, you already need to provide a valuation of the work - when the completion certificate is awarded, the work is done and any increase in value can be recognised. For any property that hasn't had a revaluation in 10 years, we have RICS members to provide valuations.

[@andyinsuffolk]

So taxation would vary according to revaluation frequency rather than estimated wealth? Why not just use inside-leg measurement?

[@FONASDeadlock]

​@andyinsuffolk revaluations happen on events and at set periods. That's how it works. Council tax valuations right now do neither.

[@andyinsuffolk]

@@FONASDeadlock -- Yes LVT and Council Tax are both ludicrous; replacing one with the other also.

[@homelesseconomist]

Land value tax would fix that

[@billB101]

I like this channel, you answer the questions I've been asking for a long time. What I really want to know though is why Labour have about faced and decided to head down the route of austerity. Really scratching my head with that one?

[@gladiatorknight6316]

This guy did not tell why it doesn't work. Just said it was not tried so it won't work

[@SlowCarToChina]

Is there any country that has implemented a 'best' or even 'ideal' tax regime?

[@andyinsuffolk]

Land VALUE Tax is as illogical as any other wealth tax, complex valuations & massive bureaucracy with no rational basis why the state charging rent on unrealised wealth should not apply to other asset categories. This is just ideology from those who don't want to understand the roots of prosperity -- property rights are good, we've proven it. On the other hand ... Land AREA tax which could actually perform an administrative function as well as recognise the finite resource and state involvement surely has some merit? By my calculations £25,000 per acre per annum would exceed the revenue from all other taxation - not that this would be sensible to have a single tax for everything. Ten percent of this applied universally would raise more than council tax & business rates - although I don't suggest that either - but it would be far far simpler than any wealth tax. FYI The suggested density of semi-detached homes per acre is apparently 12 to 20.

[@johnburns4017]

It is best you do some reading and understand LVT.

[@andyinsuffolk]

@@johnburns4017 -- If Richard thinks it's problematic it must be really really awful as he's so tax happy most of the time. After studying the effects of complex taxation everywhere else it would be pretty staggering to find an example that doesn't do the exact opposite of the claims -- complex taxation reduces prosperity in the long-run there are no special exceptions.

[@johnburns4017]

@@andyinsuffolk LVT is simple taxation. Land's location is known to the mm. It cannot be taken offshore. The tax cannot be avoided.

[@andyinsuffolk]

@@johnburns4017 -- Where does the valuation come form and how much will it cost? If they're not updated annually how do we address the inequality between tax-payers ... what about valuation changes by external forces affecting revenue? It's all vast increasing complexity. On top of that we have tax systems already that really do measure our slice of the cake -- why not just adjust those rates and get rid of unnecessary bureaucracy?

[@johnburns4017]

@@andyinsuffolk Market forces dictate land value. A great thing as authorities are out of the picture.

[@OneAndOnlyMe]

Richard, any thoughts on replacing council tax with a property value tax (say, 0.5% of property value)? Some people, for example, Grace Blakely, support this, but I wonder if this would be open to abuse by governments who could raise the rate dramatically when it suits, but this would massively impact retired folks or low income folks who just happen to be in a property that has gained in value. It doesn't feel fair.

[@eddieharris6004]

Why is it so odd that your House built in 2003 should be taxed in accordance with legislation drawn up in 1992? Someone born in 2003 and convicted of murder might expect to be sentenced in accordance with guidelines stretching way back into the 20th century.....you can't update legislation every week according to the date on the invoice.

[@andyinsuffolk]

Think he's making the point that a 1992 valuation for something that didn't exist is 'interesting'.

[@hareb_]

Thanks for another good vid. Wouldn't increasing tax rate on rents, or investment income surcharge you mention, simply lead to landlords increasing rents further as well?

[@jonb5493]

.. straw-mannery; LVT proponents do not claim all these loony things.

[@MichaelJuska]

How are we talking about raising revenue, when tax is just destruction of money? Serious question. Maybe I’ve missed something??

[@Beni10PT]

You missed the point but I am sure you will learn a lot from reading the comments.

[@siskinedge]

I think in this video you have failed to research each of your points. Land value tax would address the issues with how land in the UK is treated as a store of value similar to gold instead of a productive asset. There are empty ghost towers of housing in london, half the UK is owned by the aristocracy who dont farm their land but inherit it tax free as 'agricultural' and there are plenty of developers who after getting planning permission do nothing with it. If you do nothing with land, it should be burning a hole in your pocket. By taxing land value land owners will have to sell to people who will do something with it, bringing down the investment cost and incentivising more intensive use rather than concreting the countryside. While I do find the arguement that landlords wouldn't put up prices in the short term dubious, they would pay the same tax if a rental is occupied or not. As all of them would be competing for the same tenants there would be a market signal to lower prices when more housing is built. Overall I could see rents coming down from it as value of land is eroded by taxation, more housing being built from the tax incentive and landlords having stronger incentive to compete for tenants.

[@joemomberg8624]

A bit of a contradiction here. You've said that landlords will pass on a cost of a land tax, but then suggest a surcharge on rental profits. How would this be different? You've also linked rent increases to interest rates. A cursory glance at rental indices shows no evidence of this. Interest rates plummeting after the GFC but did not result in any rent decreases. Rates soaring well into the double digits in the late 80s / early 90s were not associated with rent increases. If anything, rents appear to be correlated with wages. So they are in effect a privately collected tax on labour. This to me is an injustice and land value tax is one way to solve it. Another, anarchic way is to get rid of all planning permission and even allow tents on public land. A core tenet of free markets is that no one is forced to participate. Absent a free for all on land, everyone is forced to participate. Lastly, demographic changes are making labour more scarce. We're already at the limit on how much we can tax labour I think, time to think of something else.

[@DileepaRanawake]

Richard -appreciate you posting however seems a few flaws in logic here. Land taxes or any costs landlords face could be handled with rent controls. Of course LVT wouldn’t work in isolation - just like any other tax! Does the public need to understand LVT? I have no idea how or why NI or income tax is valued at what it is, or my council tax - I just pay it. Something like 18% of land in the UK belongs to former aristocracy vs 5% for all buildings. People buy land and sit on it for years, ditto for 2nd 3rd houses. Or derelict buildings. What I’d be much more interested in than a critique of LVT - what problem would you address and what are the alternative methods? You mentioned rent tax - how is that different to income tax? How does that not encourage landlords to jack up rents as you suggested LVT would? The thing I’m interested in is how we significantly reduce wealth inequality and how we can run nationalise / run more sustainable public services. Would love for example coverage and analyses on UCLs Universal Basic Services. Thank you.

[@Tensquaremetreworkshop]

Land? No. Labour? No. Most wealth is created by ideas.

[@danthorley6592]

Complete nonsense.

[@safirahmed]

Proposals for land value tax must be scrapped. If land value tax is implemented then land value tax must only be paid on land holdings worth more than £10 million by the owner of the land. If land value taxation is implemented it must only start with the biggest land holdings first and ending with land value holdings above £10 million. The world's biggest landowner is the British King with an estimated land holding of 6.6 billion acres according to the New Statesman. Property tax is much more fairer than land value tax.

[@yellowgreen5229]

Most land is not taxed, we need a per hectare tax at least, or ideally to abolish monarchy and Kukaks. So, disliked. FYI i had to leave Britain to start a small farm because of land hording in Britain so you have no idea what u r talking about.