Why we need LVT
Summary
We need Land Value Tax because our tax system:
is too big,
is unfair,
is easy to avoid (HMRC estimates we have tax gap of almost £60 billion),
was written by lawyers to provide work for lawyers.
This has resulted in a lack of trust in our government and political system.
A good tax system should be easy to understand without needing a lawyer!
Take a look at the chart below which shows how much land contributes to the cost of housing. Land has been escalating in price as landholders make massive windfalls when selling land for development. We, as a society, give permission for development - yet we, as a society, gain nothing from the huge increase in land value that follows. Landholders laugh all the way to the bank!
Land contributes up to 60% of new-build housing costs inside the M25 - which, along with high demand, explains why house prices are so high there.
Land Value Tax will help sort this out.
More detail
Our current system is unfair - as a proportion of income, total taxes fall far heavier on those with lower incomes than those with higher.
Council Tax is the most hated tax because it is unfair. A three bedroom house in Gateshead pays more than a multi-million mansion in Westminster.
As a society we own all the land in the country and we control its use through planning. We should therefore benefit from its use.
Land has not been taxed for 1,000 years.
Our “tax code”, the biggest in the world, contains over 10,000,000 words which makes it 12.5 time longer than the Bible and 12 times longer than the collected works of Shakespeare. See “Simplify our tax system” on this page.
“Donations” and gifts to political parties and MPs are seen as corruption.
People no longer trust our political system because it is unfair so they turn to populists and extremists for simple solutions – “divide & rule” and scapegoats.
Our politicians still see our economy in a way that has failed us for 40 years leading to austerity, falling living standards and unfair distribution of wealth.
We need tax
It doesn’t matter if you are a Reagan/Thatcher neoliberal or you support the more trendy Modern Monetary Theory - we still need tax.
“Neoloberalism” thinks running a country is like running a houseold and that “tax pays for things”
Modern Monetary Theory thinks that government investment and spending creates money (no one else can create money!) and drives the economy but tax is required to prevent inflation.
Please see the article “Neoliberalism, MMT and LVT”.
Whichever model you favour, we need tax – so it makes sense that we use taxes that are simply to understand, fair and absolutely impossible to avoid. LVT is such a tax.
Compared with other countries in Europe:
Do we have the lowest energy costs?
Do we have the best water supply and sewerage processing system?
Do we have the cleanest rivers and beaches?
Do we have the best transport system?
Do we have affordable housing for everyone?
Do young people find it easy to get a home to buy or to rent?
Do we have the fairest distribution of wealth?
Do we have a fair national media owned and run by UK citizens living and paying tax here?
Do we stop foreigners and other counties interfering with our politics?
Do we prevent tax avoidance by those who abuse the system?
Does our education system meet the needs of young people and our economy?
Do we have the best health system?
Do we have the longest life expectancy?
Do we have the best survival rates from cancer?
Do we have the lowest pro rata prison population?
Do have the speediest justice system?
The answer is “no” in all cases and in many cases we are the worst.
For 40 years all our political parties have supported an economic model (“neoliberalism”) that has failed to provide better living standards and a fairer society – though it has made the rich richer and it has lined the pockets of “the financial sector”.
There are alternatives – so why do politicians continue to flog a dead horse? See this article.
Land Value Tax can help restore fairness because it is simple, fair and impossible to avoid.
What else must be done?
See the article “LVT can’t solve everything”.
