LVT again

[Chapter 7]

How do you tax the speculative rural houses without taxing the affordable
ones? It sounds more like a capital gains tax than LVT to me.


> From: Wetzel Dave <davewetzel at tfl.gov.uk>
> Date: Friday, December 10, 2004 4:51 PM
> To: 'Chapter 7' <chapter7 at tlio.demon.co.uk>, diggers350 at yahoogroups.com
> CC: "'Jock Coates (Oxfordshire CLT) [LC]'"
> <jock.coats at oxfordshirecommunitylandtrusts.org.uk>,  'Land Café    ( lc1)'
> <LandCafe at yahoogroups.com>
> Subject: RE: [diggers350] LVT again
> 
> Cheers Simon
> 
> I do not take just an urban perspective.
> 
> I used to live in Mevagissey in Cornwall - pretty rural.
> I was active in the local Labour Party, a member of the Folk Museum's
> Committee and Vice-Chair of the Chamber of Commerce, (we had members who
> were not just traders and hoteliers but also farmers and fishermen!).
> 
> I did qualify my statement about accountants etc. with  "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).
> 
> I can only agree that Henry George, David Ricardo and others were writing
> over 100 years ago. I certainly don't agree with all that they wrote but on
> the subject of land rent and its role in the modern economy they were in
> fact spot on.
> 
> I also agree with your criticism of Development Land Taxes but reluctantly
> have to disagree  that a Land Value Tax would make
> 
> rural housing more unaffordable. In fact, by bringing idle brownfield sites
> in towns, cities and indeed villages into productive use for jobs and homes,
> the pressure for urban sprawl and the demand for rural housing land would be
> reduced - this would force the land price element of rural housing down -
> making houses more affordable.  Similarly, if investors no longer bought
> homes in the countryside for a capital gain, (taxed away by Land Value tax)
> then the lower demand for rural homes would also depress the price.
> 
> With Seasons Greetings,
> 
> Dave
> 
> 
> 
> 
> 
> Dave Wetzel; Vice-Chair; Transport for London.
> Windsor House. 42-50 Victoria Street. London. SW1H 0TL. UK
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> 
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> 
> 
> -----Original Message-----
> From: Chapter 7 [ mailto:chapter7 at tlio.demon.co.uk
> <mailto:chapter7 at tlio.demon.co.uk> ]
> Sent: 10 December 2004 11:19
> To: diggers350 at yahoogroups.com
> Subject: Re: [diggers350] LVT again
> 
> 
> 
> 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
> <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.
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>>> Diggers appeared at the end of the English Civil war with a mission to
>> make
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>>> 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
> <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
> <http://www.bilderberg.org/diggers.htm>
>> Yahoo! Groups Links
>> 
>> 
>> 
>> 
>> 
>> 
>> 
>> 
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> 
> 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
> <http://www.bilderberg.org/diggers.htm>
> Yahoo! Groups Links
> 
> <http://groups.yahoo.com/group/diggers350/>
> 
> 
> 
> 
> 
> 
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