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Down to brass tax

The Latin dictionary defines the verb, taxo, taxare, as to estimate, rate, appraise the value of anything. In modern English, this is still the meaning in the courts of law, where a taxing master is one who taxes costs by examining them and allowing or disallowing the various component items claimed. A wider use of the word has largely taken over from the strict, etymological meaning, so that taxation to‑day signifies a government charge on certain things to provide money for the state.

The expression, taxation of land values, may therefore mean the action of collecting a charge on the value of land to provide revenue for the state or, more simply and in accordance with the original meaning of the word, the act of appraising land in accordance with values assessed on and assigned to various plots or parcels.

The use of the term “taxing land value” in the classical Latin sense presents no difficulty beyond making clear the use intended. However, adopting land value taxation in the broader modern meaning does the policy a dis‑service.

The justification for allowing such a usage is that, in the UK, that is how, historically, it has been known. In the early years of the 20th. century, there were, successively, the Land Values (Scotland) Bill, 1907, the Land Values (Scotland) Bill, 1908, and the Finance (1909‑10) Act, 1910 (which introduced a number of land taxes, none of them actually land value taxation, even though the preliminary campaigning had indeed been for proper LVT!). Later, Section III of the Finance Act, 1931, was entitled Land Value Tax. For well over a hundred years, there have been numerous inquiries, in and out of Parliament and Whitehall, referring either to land value taxation or to its local government equivalent of land (or site) value rating.

Yet, equating LVT with taxes such as income tax, corporation tax, the council tax, the uniform business rate, capital gains tax, value added tax, import duties and excise duties, is to underestimate the superiority and singular character of the former. All of the latter are taxes on work – on the productive process itself or on trade in goods and services or on accumulated savings devoted to capital formation. The land is not man‑made (no one paid to have it produced!) but is a gift from Nature, part of our planet, Earth. What each plot is worth, depends on the demand for its qualities, for the social and other benefits and opportunities it offers. Each plot constitutes a monopoly location: land is not transportable from place to place.

Properly and, as far as practicable, fully implemented, an impost based on the assessed [taxed] rental value of land is to be viewed as a payment to the community for benefits actually received. What the landholder pays to the Exchequer is thus compensation for what he gets the exclusive right to enjoy.

Although generally known as LVT, this policy is more accurately described as a National Land‑Rent Charge. The Land Value Taxation Campaign is therefore advocating the collection of the rent of land for public revenue purposes, to be effected by passage of a National Land‑Rent Bill.

[Originally printed in issue No. 122 of “Practical Politics” (April 2003)]