Financial Times : October 6, 2004
Human rights are not applicable
This letter is the most recent of a thread on LVT appearing in the Financial Times.
Sir, A combination of a tax on land values with taxation of income from that land could indeed amount to aggregate taxation of over 100 per cent.
But this is not the form of land value taxation proposed by the Land Value Taxation Campaign, which argues for an ad valorem tax on the rental value of land using current evidence as a replacement, initially, for existing taxes already falling partly on land value, such as council tax, business rate, stamp duty land tax and planning charges.
If levied at appreciating and increasing rates, land value taxation could also allow the phasing out of other taxes, such as income tax, corporation tax and value added tax. The letter refers to land value taxation as a breach of the human right to peaceful enjoyment of property. This objection applies to all other taxes.
The widget crafted by an artisan is his property. If sold, the income from his labour is a confiscation of that property.
Arguably, land is a special case because it is not the product of human labour, and its value is therefore not an appropriate subject for appropriation. That value arises from, is sustained by and is dependent on the presence and activities of the community as a whole, which also upholds the landowner's title.
Surely it is not unreasonable for the landowner to pay the community for its continuing recognition and defence of that title?
The notion that human rights apply to land ownership has no more validity than the slave owner's claim over the labour of his slaves.
Henry Law
Land Value Taxation Campaign
Land value tax will have beneficial effect
September 24, 2004
Sir, Roger J. Southam is quite right to draw readers' attention to "the devastating effects of development land tax in the 1970s" (Letters,September 20). This was tried three times by previous Labour governments - with equally disastrous effects, not just for the property industry but for the economy as a whole. To avoid the tax, the provision of development land dried up and the cost of accommodation for jobs and homes escalated. It is, to say the least, unfortunate that yet another development tax (in the shape of a planning gain supplement) has raised its ugly head in the Barker Report on Housing Supply. However, the land value tax advocated by Henry Law (Letters, September 9) is not a development land tax but an annual tax on site value payable by all owners. This tax will have a beneficial effect on developers like Mr Southam's company, not only by bringing to market unused land for development and reducing capital land values but by replacing those property taxes that have negative effects, such as council tax and business rates on buildings and stamp duty on property transactions.
Carol Wilcox
Labour Land Campaign
Tax will foster more efficient development
September 24, 2004
Sir, Roger J. Southam's criticism of land value taxation campaigners has little substance (Letters, September 20). LVT campaigners opposed the 1970s Development Land Tax legislation at the time precisely because it was not indiscriminate in its effects - it discriminated against developers' improvements of land and in favour of owners of underutilised landholdings. LVT is not a panacea for all ills relating to housing and land - an adequate supply of development land for housing ultimately depends on an enlightened planning system. However, I have yet to see any critic of land value taxation refute satisfactorily that a system of taxing land values would encourage more efficient development and use of brownfield sites, thereby reducing the need to encroach on greenfield sites. Mr Southam appears to be unable to understand the difference between development land tax (only on land under development) and a universal tax on land values.
Christopher Cormack
London
Land tax argument made little sense
September 20, 2004
Sir, Seldom have I read such a muddled argument as that made by Mr Henry Law (Letters, September 9) regarding the utilisation of a land tax on values. It is extremely concerning that there is a body campaigning for land value taxation if, as would appear, it sees it as a panacea for all ills relating to housing and land. Taxation is a blunt instrument with regard to housing because it is indiscriminate in its effects. I suspect most in business have no recollection of the devastating effects of development land tax in the 1970s. I would respectfully suggest some homework for those thinking this is an easy way to address matters and read about the effects on the development market. The only real long-term solution to the escalation of house prices is to ensure an adequate supply of housing to meet demand.
Roger J. Southam
London
In support of LVT
September 9, 2004
Sir, The main reason for Dane Clouston's support of inheritance tax and his proposals for reform appears (FT letters 6 September) appears to be to achieve inter-generational justice. However, inheritance tax, however reformed, will inevitably be avoided by those that can afford to exploit the loopholes. Thus, inheritance tax is essentially an impost on the not-quite-poor. In any case, what is the justification for taxing pictures on the wall? And how do you tax stashes of jewellery and small valuables? What Mr Clouston seems to have overlooked is that most of what is inherited is actually land; the current rises in house prices are actually increases in LAND value. The way to deal with the land value issue is through an ad valorem tax on the annual rental value of land. Provided the tax were at a sensible rate, this form of land value tax would knock down land values to the point that there would be little land value to inherit. House prices have gone haywire largely due to the lack of LVT.
A proposed 'universal inheritance' would be of little real value - it would just about pay for a new car. LVT, in contrast, would make land readily available to the next generation. It would also permit substantial reduction of taxes which effectively saw off the bottom rungs of the economic ladder and are themselves a major factor in preventing young people from making decent livelihoods. It would also resolve other long-standing and intractable problems eg how to raise public revenue efficiently and reliably, how to pay for transport infrastructure, how to collect development value, how to prevent tax avoidance and evasion, and how to address the issue of regional economic imbalance.
Henry Law
Land Value Taxation Campaign