Skip to main content

Absurdest-ever argument against LVT

From the “Guardian’s Comment is Free” website, this must surely deserve some sort of prize as the absurdest-ever argument against LVT

“So someone who earns £1million a year and owns no land (or lives in a small flat) pays no tax, and a pensioner on nothing but the state pension who happens to live in an average house in Battersea, inner London, that he bought for £200 in the 50s would pay loads of tax?”

One could also avoid LVT by living rough. If there was LVT, would the homeless people who are living under the sea front at Brighton be joined by millionaires who were avoiding the LVT they would have to pay if they remained in their houses in Kensington?

The fact that the commentator had to postulate an almost impossible situation supports the case beautifully.

Who, earning a million a year (and they could not be earning it from land rent if that is taxed to the hilt, so we are talking about a few footballers and pop stars), would want to live in a little flat out in the sticks and live as a near-pauper? There was Ken Dodd who remained in his two-up, two-down in Knotty Ash. And if they are choosing not to occupy valuable land, why should they be penalised?

The pensioner referred to will be coming up for his (or likely her) ninetieth birthday, so there are not going to be many of them and she is not going to stay there more than another few years. As the property is worth a tidy sum, there are all sorts of ways of dealing with a problem affecting a tiny proportion of the population. No great loss would be involved in just writing off the amount owing but do not forget that she is sitting on a valuable asset.

The absurdity of the comment could of course have been taken a step further, with the theoretical millionaire living in a cardboard box in Toxteth.

However, this one ran it close
“Actually that is exactly how the rich would game the system so that they paid as little tax as possible. They would domicile outside the UK where the land value tax would not apply and they would ensure that they were paid in the UK to benefit from the zero income tax rate. It is an utterly bonkers idea.”

The land value tax, as it name implies, is a tax on the value of land. The liability to pay the tax goes with the land title. The owner of the title might live in Timbuktu but the liability to pay the tax remains. If it is not paid to the UK authorities, the ultimate sanction is that the title can be confiscated. It is the one tax that the rich cannot “game”, which is why we haven’t got it. Bonkers? We do not think so.