[diggers350] LVT again

[Chapter 7]

Thanks, Dave, I am still in the process to get my head round this stuff, and
have already sent a response to Jock Coats.

I think one of the reasons for our differences is that I am coming from a
rural perspective, while you and Jock are coming from an urban perspective.
In the city 

It is highly arguable when you state that "many more people desire to use
land in City centres. Banks, insurance companies, firms of solicitors or
accountants,
> investment brokers etc. do not desire to be on a Welsh hillside".

On the contrary accountants, brokers and the like are beseiging the
countryside, and desperate to site both their homes and their businesses in
remote and leafy locations. Sure, property in the centre of London is worth
more than property on a Welsh hillside. But a property in a field in rural
Somerset is worth more than property on the average street in Yeovil. In
both cases it is scarcity which creates the value. In the case of the centre
of London the scarcity is a physical fact, not everyone can be in the
centre; in the case of the countryside it is an artificial scarcity imposed
by a political process.

I do not think that classical Georgist theory adequately accounts for this.
George was writing in the days before accountants and the like could bomb up
and down the M4 in motorcars, and before planning permission was introduced
in order to stop the plebs from doing the same, and confine them to the
towns, from which increasing numbers are now trying to escape.

The inequity inherent in this situation cannot be resolved by imposing land
taxes or development taxes, since these will just make rural housing even
more unaffordable. The only way I can see to solve it is by rejigging the
planning system so that rural development is accessible  to those who cause
least harm rather than to those who have the most money ‹ ie low impact
development.

Otherwise I agree with most of what you say.

Cheers

Simon







> From: Wetzel Dave <Davewetzel at tfl.gov.uk>
> Date: Thu, 9 Dec 2004 13:44:24 -0000
> To: 'Chapter 7' <chapter7 at tlio.demon.co.uk>, Jock Coats
> <jock.coats at oxfordshirecommunitylandtrusts.org.uk>,
> diggers350 at yahoogroups.com
> Subject: RE: [diggers350] Re: Coats, Cahill and LVT
> 
> Cheers Simon.
> 
> Land Value Tax is NOT a development land tax even though you are perfectly
> correct to point out that the highest land values arise where development
> has taken place.
> 
> e.g. The City centres of New York and London are much more valuable than
> sites in the Rocky mountains or on a Welsh hillside.
> 
> This is because many more people desire to use land in City centres and in
> terms of business use it is more productive. Of course, an urban farm in
> Wall Street or the City of London may be less productive than a farm in
> Wales.
> 
> But banks, insurance companies, firms of solicitors or accountants,
> investment brokers etc. do not desire to be on a Welsh hillside (except
> maybe for individual's holiday homes - yet another story) but they do want
> to locate in the financial district of a world city.
> 
> Many of the buildings they occupy were built many years ago and would pay no
> Development Land Tax (DLT).
> DLT arises at the time of development. Consequently, as again you so rightly
> say, "in the past they discouraged development". If you tax an event, the
> tax can be avoided by avoiding the event. In this case, by not developing.
> 
> Hence, the Development Land Taxes in 1947, 1967 and 1977 were largely
> avoided by landowners - and the economy suffered as valuable town and city
> land was left idle. Idle land means fewer jobs and fewer homes. This
> artificial shortage of supply of land also increased its price. Homes became
> unaffordable and marginal firms were unable to start or expand because they
> could not afford the premises they needed.  With valuable urban land left
> idle, urban sprawl into the countryside on cheaper land was encouraged. This
> imposed direct costs of those located farther out, (transport etc.) and
> costs on the community to provide all the infrastructure that these new
> settlements required.
> 
> And all for what?  When Margaret Thatcher abolished Jim Callaghan's DLT, the
> tax revenue was less than the cost of collection!
> 
> Land Value Tax is the obvious alternative.
> 
> All sites are valued according to their optimum permitted use.
> The tax is levied as a percentage of the land value.
> 
> Hence, valuable sites pay a high LVT and low value sites pay very little.
> 
> The landowner is paying for their location benefit - a benefit they receive
> from Mother Nature and the community.
> Improvement to buildings are not taxed.
> Neither does allowing a building to fall into disrepair reduce the tax bill.
> 
> Landowners are encouraged to make best use of their land within the planning
> constraints applied by the community.
> 
> Other taxes on trade and incomes can be reduced or even abolished.
> 
> GDP grows.
> 
> The Government could pay a "citizen's dividend" to every man woman and child
> (as in Alaska).
> 
> You are once again correct to warn us against taxing planning permission
> (Kate Barker's proposal of a "Planning Gain Supplement" for the Government.
> 
> I welcome your support for "resource taxes".
> Our congestion charge in London proves that if you charge for a scarce
> resource (in our case scarce road space in Central London) then people will
> use it more efficiently (we've achieved a 30% reduction in congestion).
> 
> Similarly, LVT is a resource tax, and if applied, people will make more
> efficient use of the surface of our planet, the spectrum, the fisheries in
> the sea and our natural resources such as oil.
> 
> i welcome your thoughts.
> 
> Seasonal greetings,
> 
> 
> 
> 
> 
> Dave
> Dave Wetzel
> 0207 941 4200
> 
> -----Original Message-----
> From: Chapter 7 [mailto:chapter7 at tlio.demon.co.uk]
> Sent: 09 December 2004 01:41
> To: Jock Coats; diggers350 at yahoogroups.com
> Subject: [diggers350] Re: Coats, Cahill and LVT
> 
> 
> 
> What the 70 per cent own is, in terms of its value, about 2 per cent land ,
> about 48 percent bricks and mortar, and about 50 per cent planning
> permission < and it is the planning permission they pay heavily for, (until
> they have paid off their mortgage when they can then proceed to make
> somebody else pay through the nose for it).
> 
> The Land Tax arguments are confused by the fact that most of the value of
> most properties lies in the permitted and actual use, rather than in the
> land itself < if you want to capture that value and tax it, then  it is a
> development tax, not a land tax that you are looking at.
> 
> Development taxes have their points, but when used in the past in the UK
> they were abandoned because they discouraged development < while,
> ironically, one of the objects of Henry George's land tax was to encourage
> development.
> 
> I haven't quite got my head round all this yet, but as far as I can see,  a
> main flaw in Land Value Taxation, is that it isn't really  a land tax at
> all, but an "improvement" or development tax, because that is where the
> value is. This might have been OK back in the days when there was no such
> thing as planning permission, and land could be assessed as being worth a
> given amount according to its productivity, proximity to town centres and
> railroads etc. Applying a tax on undeveloped land in George's day would have
> provided an incentive for it to be used to its full development potential.
> 
> But nowadays most land derives most of its value from planning permission,
> something which is accorded by the state.  If you tax planning permission,
> then you discourage development, and you will get less homes, not more.
> That's why levies are currently obtained through negotiations about 106
> agreements, rather than a blanket tax.
> 
> If on the other hand you tax allocated land which hasn't got permission,
> then you tax people who have been refused planning permission, which is
> blatantly unfair because it is the state which grants pp and exacts the tax,
> thus giving the state an incentive for refusing planning permission.
> 
> Personally, I'm not wild about improvement taxes and development taxes. I
> tend to prefer resources taxes which tax people for using more than their
> fair of the earths resources < and that includes land, petrol etc but not
> "improvement", or planning permission. Resource taxes discourage
> unsustainable development, but they don't discourage sustainable
> development.
> 
> Cheers
> Simon
> 
> 
> 
> 
>> From: Jock Coats <jock.coats at oxfordshirecommunitylandtrusts.org.uk>
>> Date: Mon, 6 Dec 2004 08:42:37 +0000
>> To: diggers350 at yahoogroups.com
>> Subject: Re: [diggers350] Land party for affordable housing
>> 
>> 
>> 
>> Hmmm - I'm not sure this is the case.  I for one never forget that as a
>> non-home owner I am in the minority, and of course am seeking ways to
>> join that majority in some form or another (well - one aspect of it -
>> security of tenure).  A big part of the various land campaigns is
>> focussed on trying to prove that those who are in the 70% already (well
>> the 95% of that 70% who participate in the ownership of three or four
>> per cent of the land in the country) would be better off under LVT than
>> under an income taxation regime while those who own more would pay
>> more.  And I suppose part of that persuasion is trying to persuade them
>> of the "fact" (to my mind) that they don't in fact actually own what
>> they think they own - that there are so many conditions on home
>> ownership that it effectively means that it is a different form of
>> ownership from all others (like Churchill said).
>> 
>> Those who have their nice homes, however small, are also often those
>> who would rather not see any more - like the green belt defenders of
>> Oxfordshire who want to have their cake and ensure that nobody else has
>> a bite anywhere near them.  LVT can be used as a vehicle to make
>> existing land use more efficient and less likely to swallow up virgin
>> land for housing - and there's some success in persuading people that
>> ideas like LVT are better than urban sprawl for example.
>> 
>> Jock
>> 
>> On 6 Dec 2004, at 08:22, Globalnet mail uk wrote:
>> 
>>> Jock,
>>> 
>>> The reason you, the Greens, ALTER, and the Land reform Group are
>>> beating
>>> your heads against a brick wall at the moment is because your first
>>> assumption is wrong; that very few people participate in land
>>> ownership in
>>> the UK. 70% of us have a stake in land through our home. So many
>>> proposals
>>> would change that situation that if you dont take it into account, and
>>> most
>>> dont, you will simply fail to even be heard. Its the biggest interest
>>> group
>>> in the UK, and all the LVT etc, etc, try and pretend it isnt there.
>>> It's
>>> there, you start with it, and that way you may get somehwere.
>>> 
>>> Kevin Cahill
>> --
>> J1e Morrell Hall, OXFORD, OX3 0BP, United Kingdom
>> T: +44 1865 485019 F: +44 845 1275714 M: +44 7769 695767
>> 
>> 
>> 
>> 
>> 
>> 
>> 
>> Diggers350 - an e-mail discussion/information-share list for campaigners
>> involved with THE LAND IS OURS landrights network (based in the UK ..web
> ref.
>> www.thelandisours.org). The list was originally concerned with the 350th
>> anniversary of The Diggers (& still is concerned with their history). The
>> Diggers appeared at the end of the English Civil war with a mission to
> make
>> the earth 'a common treasury for all'. In the spring of 1999 there were
>> celebrations to remember the Diggers vision and their contribution. Find
> out
>> more about the Diggers and see illustrations at:
>> http://www.bilderberg.org/diggers.htm
>> Yahoo! Groups Links
>> 
>> 
>> 
>> 
>> 
>> 
>> 
> 
> 
> 
> 
> Diggers350 - an e-mail discussion/information-share list for campaigners
> involved with THE LAND IS OURS landrights network (based in the UK ..web
> ref. www.thelandisours.org). The list was originally concerned with the
> 350th anniversary of The Diggers (& still is concerned with their history).
> The Diggers appeared at the end of the English Civil war with a mission to
> make the earth 'a common treasury for all'. In the spring of 1999 there were
> celebrations to remember the Diggers vision and their contribution. Find out
> more about the Diggers and see illustrations at:
> http://www.bilderberg.org/diggers.htm
> Yahoo! Groups Links
> 
> 
> 
> 
> 
> 
> 
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