Land Charter from the Coalition for Economic Justice

[mark at tlio.org.uk]

As has been long identified on this list, there are conflicting 
perspectives as to the merits of Land Value Taxation, a policy 
framework whose purpose of intent is to redistribute the proceeds of 
what is termed 'economic rent' which landowners - particularly large 
ones - benefit from, with the desirable outcome of creating a 
financial disincentive to hoarding large areas of land as a result of 
such a new tax framework (a tax framework which it is envisaged would 
replace council tax entirely, and, it is said though is hard to 
fathom, in-part also income-tax and VAT).
  
The primary concern against wholesale LVT are how its universal 
applicability could be passed on in terms of higher rents and the 
passing-on of greater environmental externalities, as well as how it 
would inflict financial sanction on even the smallest landholders such 
as smallholders, or householders with large gardens. Proponents of LVT 
would in turn argue that as with the income tax system, there would be 
tax allowances for landholdings below a certain side, whilst rent 
controls and environmental regulation would mitigate against the 
former concerns.

Below is copied the recently prepared Land Charter from the Coalition 
for Economic Justice.



Ref: http://www.c4ej.com/


The Coalition for Economic Justice Land Charter:



The Coalition for Economic Justice (CEJ) consists of a number of think 
tanks, charities and pressure groups across the political spectrum, 
who recently joined forces in response to the seriousness of the 
current economic situation.

We propose the introduction of an annual Land Value Tax (LVT) to 
replace or reduce existing taxes on enterprise and labour in order to 
prevent future economic crises and alleviate the current one.

  


The case for Land Value Tax

Every economic crisis in living memory has been preceded by an 
unsustainable and speculative rise in property values, 
commercial/industrial as well as residential. The link between 
property values and bank and building society lending is strong and 
causal. Excessive lending fuels property prices.

The rise in property prices is in fact a rise in the land element of 
the price, since the cost of building materials, and builders' wages, 
has risen hardly at all. An annual tax on the rental value of land 
would exert a restraining influence on property values and give some 
control over this key determinant of economic stability.  Such a tax 
would also cut the ground from under excessive and imprudent bank 
lending and remove much of the speculation in land.  With LVT 
introduced to replace taxes on enterprise and labour, an overall tax 
increase is not required as there could be a net tax reduction.

In the present market economy the justification for a rise in prices 
is that it brings forth increased supply. As the land supply is fixed 
there can be no such increase. As economists from Adam Smith onwards 
have recognised, land is a monopoly. Rising property prices therefore 
serve no useful economic purpose. As such, they are the natural and 
obvious target for taxation. The LVT thus collected on an annual basis 
would help to reduce those taxes, many of which are unpopular (e.g., 
council tax and stamp duty) as well as income tax, national insurance 
and business rates which directly discourage production.

LVT is a progressive tax falling most heavily where the benefit to the 
community is greatest and most lightly where the benefit is least. As 
the tax is based on permitted land use - not on current use (or 
non-use) value - LVT will penalise those who hold land out of use. It 
will therefore encourage land use and stimulate economic activity. 
With LVT introduced, there will be little or no incentive to speculate 
in land and hence property.  Much of the credit which currently 
supports land (property) values would no longer be needed and would be 
available to finance the production of goods and services.  LVT is 
easy and cheap to collect and difficult, indeed virtually impossible, 
to avoid.

In our view the economic case for the introduction of LVT is a very 
strong one. So, indeed, is the ethical case. Since the community has 
created the enhanced land value it is only right that the Government 
(through an annual LVT) appropriate it for uses, e.g., infrastructure 
and local services, that benefit the whole community. We recognise, 
however, that the political basis for taking this forward, while 
feasible, requires deeper consideration. Within our member 
organisations there is a wealth of knowledge and expertise on this 
matter.

The Coalition for Economic Justice promotes an All Party Parliamentary 
Group (APPG) to examine the replacement of taxes that discourage 
production, trade, enterprise and the employment of labour and capital 
with ‘rent’ revenue collected on the basis of community created land 
values.

Through letters, meetings and seminars we lobby government ministers, 
MPs, and the media.