Skip to main content

A dialogue of the deaf

In response to an article on housing policy in the Observer, which needless to say did not mention LVT but came up with a list of tinkering measures

ME: There is no solution to the housing problem without land value taxation – that is a prerequisite.
Without LVT, all the measures listed in the article are just useless tinkering. With LVT, most of them would not be necessary

REPLY FROM Lune13: Zzzzzzz

ME: You do not conceal your towering intellect, do you?

Lune13: Not ever. You are a fanatic who believes an extremely minor single taxation change would have a huge impact. It won’t. it is also comically out of line with how most new business generates wealth. Clue- it does not involve land.

ME Fanatic? What word describes someone who comments on something they obviously know absolutely nothing about? There is so much material around on the subject that I am not going to waste time explaining here.

Well, Mr Genius, perhaps you would care to explain why the price of it keeps on going up and up when nobody wants it or needs it any more?

Lune13: How much land do the following highly profitable companies use, and could you possibly tax them on it the same as CGT?

Shell; BP; All the banks; Vodafone; Google; Apple; Etc The answer is- you can’t The only valuable thing that LVT can be applied to is peoples houses. The biggest vote losing proposition ever formulated.

  • ME: Shell; BP – Nearly all of their revenue consists of resource ie land rents. “Land” in economics means the entire natural world apart from man ie the surface of the earth, radio spectrum, minerals in the ground, fish in the sea, virgin forest.
  • All the banks – Banks own vast amounts of land through their secured mortgages. A mortgage is a device whereby the lender creates money at next to no cost for the purchase of real estate. The borrower is the bank’s tenant for the duration of the loan. What is labelled “interest” is in reality “rent”.
  • Vodafone – Redio spectrum is classified as “land” in economics
  • Google; Apple – Google and Apple cannot operate in locations where land values are low – although they do their best. They need well-serviced sites where labour with the right skills is available. In this case a lot of their revenue flow is from intellectual property rights ie like land, they are a monopoly granted by government, analogous to land titles. The first thing their highly-paid staff do is to purchase valuable real estate.
  • The only valuable thing that LVT can be applied to is peoples houses – In valuable central business districts like London and New York, more than 80% of the rent paid represents land value. The dukes who own most of central London are not living in penury by having to rely on the land value of their property.

Lune13: 80% of the land value of the UK is in residential property. You do know that, right? So, tell me again, how is LVT going to replace any other taxes.

ME: What is your source for this claim? Please show your calculations based on LAND RENTAL VALUE, not selling price, and allow for the fact that some land value is already collected through the UBR and Council Tax.

You have forgotten to take account of Ricardo’s Law of Rent, from which it follows that all existing taxes are at the expense of land rental value ie a cut in tax of £1 billion will lead to an aggregate increase in land value of about the same amount. If you can disprove Ricardo then you will get a Nobel Prize in Economics. I will make the journey to Stockholm to congratulate you.