Thursday, August 31, 2017

Killer Arguments Against LVT, Not (421)

From the comments to my post here of a couple of days ago...

Like most of our age, I can remember the introduction of poll tax. At the time council tax (rates) was going through the roof and had no bearing on demands or ability to pay.

Sadly the poll tax was equally badly implemented, yet if it had been implemented fairly it would have been a much fairer alternative and much better understood. The poor implementation and the "poll tax riots" by all those who never paid bugger all for the services they received scuppered the tax.

We are now faced with council tax that now that the brakes have been taken off go the same way as rates. What is basically wrong with council tax/rates is that only roughly 38% - and that was from the chief accountant in Suffolk twenty years ago - actually pay the tax; the reasons are all there to see but too long-winded to go into now, but in essence there was nothing wrong with the poll tax if it had been properly administered. After all this current tax is to pay for services enjoyed by all but less than half contribute!


The second half is incorrect. I don't know what the collection rates for Council Tax were twenty years ago, but unsurprisingly, collection rates are actually close to 100% and jsut about every home is liable for Council Tax.

He defeats his own argument in favour of a Poll Tax by saying that Domestic Rates had "no bearing on demands or ability to pay". A Poll Tax would have even less correlation with ability to pay. Most low income people own or rent lower value homes and smaller households own or rent smaller homes (or at least could choose to do so), so under Domestic Rates/LVT, the tax payable is nearly always affordable.

As we well know, riots aside, Poll Taxes are very difficult to enforce and collect, there's no way you can "implement it properly", let alone fairly. And they are antithetical to having a welfare system, before we try and collect a separate tax from low income people, it's much easier just to reduce their benefits/old age pension.

But the fundamental misconception is the idea that the government should charge for services provided to 'people' generally, especially if people are compelled to use those services or compelled to pay for something which they might not use. So charging individuals who choose to apply for a passport = OK. But if we had compulsory ID cards, then charging for them = not OK or charging people a fraction of the cost of upkeep of a local park (which they might or might not use) = not OK.

Nope.

The government (or 'the state' or 'society') is the ultimate arbiter on who owns which bits of land and provides the framework within which rents can arise in the first place. So it should charge for benefits accruing to land (or landowners). Who generates the rental value? Everybody and nobody, so to whom does it belong? Everybody and nobody, but short of throwing the proceeds into the North Sea, the government might as well spend it on things which benefit everybody (welfare payments, health, education, whatever), or which benefit the economy in general (education, roads, legal system etc).

It's impossible to spend money in a way which benefits everybody equally because a lot of the benefits of 'good' government spending or action lead to higher rental values (roads benefit or burden some bits of land and leave most others unaffected). But that doesn't matter because that extra value can be recycled back into the system (and the owners of the burdened land get a tax cut to compensate them).

5 comments:

wiggiatlarge said...

The second half is incorrect. I don't know what the collection rates for Council Tax were twenty years ago, but unsurprisingly, collection rates are actually close to 100% and jsut about every home is liable for Council Tax.
I am not going to go through all that is written above, but you have misconstrued what I said about percentages, the quote I gave from the Suffolk auditor was for all homes, and of course many people are excluded from paying council tax as it is paid by benefits.
The article at the time was arguing that the poll tax being an individul tax meant that homes were the signatory was exempt from paying rates, as of the time, would often contain family members who worked earnt a decent living but contributed nothing to the tax, hence the percentage the auditor came up with was correct as it included households in that non paying sector.
You cannot just eliminate that sector to suit an argument.
The author of this has been on a mission to implement LVT as the prefered method of tax, he is entitled to his view, but no tax is perfect and many far more qualified than myself have taken apart aspects of LVT on his site, the author also rather spoils his pitch by using phraese like "homies" as a derogatory term for all home owners and feels for some strange reason that anyone who has a garden should bear the sins of mankind, all rather strange.
The comment on paying for a park = not ok, presumably means as none of us use all of the services we pay for with one or two exceptions, that much of what the councils provide is not ok as for instance I have no call for child care services = not ok.
There isno magic panacea for how taxes are taken to provide for council services but in my humble opinion a well planned poll tax is better than the current system and better from what has been laid out for LVT, about which despite reams of information I and many are far from convinced.
And as with all taxes there is never a guarnatee that one will actually replace the other rather than becoming simply an extra tax which is what usually happens, governments cannot be trusted to do the "right thing" rather like the claim the Dartford Crossing would be free of charges after it was paid for, yeah right that worked out well.

Mark Wadsworth said...

LVT is a more sophisticated version of poll tax. It has all the merits but none of the disadvantages. See my earlier post. lvt has nothing to do with size of garden but value of location. If you want to pay less, then move somewhere cheaper, same decision as every renter or home buyer has to make.

Homie dies not mean home owner (I am one), it means Home-Owner-ist.

Mark Wadsworth said...

"as with all taxes there is never a guarnatee that one will actually replace the other rather than becoming simply an extra tax"

I could say the same for poll tax, so that is simply not an argument.

Mark Wadsworth said...

As to "get what you pay for", that is the whole point of LVT. You get the location you pay for. Do not confuse tax raising side with spending side. They are opposites.

Or would you find prisons by charging inmates?

Mark Wadsworth said...

And why the focus on council spending? If poll tax is a good idea at local level, then why not have a national poll tax? Every man woman and child pays £10,000 a year each, sorted. That's unaffordable for most people. An LVT will always be affordable for most people.