Thursday, 12 July 2012

Incidental improvements caused by Land Value Tax

(The distinction between Direct and Indirect improvements is dubious.)

Direct improvements caused by Land Value Tax (or Location Value Tax, or LVT):

  • No taxes on income (which discourage production/work)
  • No taxes on transactions (which discourage transactions)
  • No taxes on capital (which discourage the building up of capital, and prevent people escaping inflation)
  • No taxes on companies (which increase prices, decrease wages, and discourage entrepreneurship and the building up of capital)

Indirect improvements caused by LVT:

  • No need for tax accountants
  • No self-assessments or tax returns
  • No need for pension funds or a distinct pensions industry
  • You could invest your pension anywhere tax free (e.g. in wine, houses, loans...)

Please add suggestions in the comments.


  1. Ha, good start, I can add a few dozen or so to that but I'm a bit busy so here are a few to get the comments section going.
    * Preventing credit bubbles/busts/recessions is near the top of the list.
    * It's an in-your-face tax so the pol's won't get so greedy.
    * Encourages efficient use of land (which is why the Greens like it) esp. derelict sites in urban areas and Poor Widows In Mansions. It follows natural law (which is why the Christians like it).
    * Is an anti-dote to NIMBYism, if people want to restrict supply, they'll pay extra tax and the excluded get a higher Citizen's Income as a result.
    * Has no dead weight costs (and small positive effects).
    * Less money tied up in mortgage debt, so more money spent in real economy.
    * It's entirely voluntary, if you want to pay less, then downsize or move somewhere cheaper or share with others.
    * Can't be evaded, land can't be taken offshore.
    * Aligns interests of taxpayers and government, it's like the government is a service provider and can only charge for value provided. With their 'shareholders' hat on, the self same taxpayers as citizens want the government to provide the best services/waste the least money.
    * Annoys the hell out of Baby Boomers, Home-Owner-Ists and Faux Libs.
    * Encourages social mobility instead of ever greater concentration of wealth.

  2. Eliminates vast numbers of expensive and unnecessary "Civil Servants".

  3. * under no income taxed: decriminalises voluntary transactions between people (no worries about what is taxable and what is not), and removes a whole range of artificial distinctions of transactions decided on as a cause of the tax-system (VAT especially). Less compliance costs improves the competitive situation of new entrants vs. established businesses.
    * if set at a fixed rate of rental value; will be The natural limit to government.

  4. Oh, and:
    * more social stability, wealthy people will still be subject to envy, but perhaps not hated in the same way as now, as there will be more likely they are rich because they've produced something for the benefit of others instead of fleecing people as rentiers.

  5. Apart from just restating the opposite of the 230 odd KLN's:

    1) The biggest one: EVERYONE will be better off with an LVT, no exceptions. That's it really.

    For the pedants:

    2) Wages would rise
    3) Returns to savings would rise
    4) Rents would rise(yet fall in proportion to 2 and 3)
    5) Employment would tend towards 100%
    6) People would tend towards self employment
    7) Working hours would fall towards 3 days a week
    8) Communities would localise
    9) Prices of goods and services would fall
    10) Quality would rise
    11) Lawyers and judges would largely find gainful employment
    11b) Election would be done by lot
    11c) Health, transport, energy, telecomms would be free
    12) Drug abuse would disappear now people were that much more satisfied with life (drugs, food, fags, booze, tv, work, promiscuity, divorce, celibacy)
    13) Recreation would tend towards higher goals rather than zombification
    14) Central government would decline
    15) Pensions would be silly
    16) We would be happy to die

    Oh yeah, EVERYONE would be better off. Did I mention that?

    If one doesn't believe any of this, then one does not understand the fundamental nature of taxation, finance, property and the law. Not to mention LVT.

  6. As a former accountant, I've never been completely persuaded of all the claimed merits of LVT. But one is clear and unambiguous: it is cheap and easy to assess and collect, and turns taxpayers from tortured semi-criminals into honest folk. It is, on these grounds alone, warmly to be welcomed.

  7. RS, you are supposed to list *improvements*, people will enjoy drugs, junk food and promiscuity, only from untaxed income.

  8. "Election would be done by lot" - Says who?

    "Working hours would fall towards 3 days a week" - I'd rather work the same amount as I do now but earn more, thanks.

    "Health, transport, energy, telecomms would be free" err, really?

    Under LVT
    "androgynous plants would copulate
    six moons would orbit the earth
    the North Pole would be milder than the Mediterranean
    the seas would lose their salt and become oceans of lemonade
    the world would contain 37 million poets equal to Homer, 37 million mathematicians equal to Newton and 37 million dramatists equal to Molière, although "these are approximate estimates"
    every woman would have four lovers or husbands simultaneously
    (Charles Fourier's predictions of socialism

    I think it was Trotsky (can't find the exact quote) who said than men would be more graceful dancers under socialism; everyone could work in the morning, compose symphonies in the afternoon and write poetry in the evening. Somehow the plebs would turn into great composers and poets.

    Serious suggestions please, Robin. I am open to suggestions that unpredictable or apparently unconnected things will improve under LVT, but I don't find some of yours plausible.

  9. I used to believe many years ago that LVT would allow Brit people to compete globally for work because their wages would n't be padded by inflated housing costs.Now tend to feel that LVT should be global so work would go where strict efficiency dictates, irrespective of relative levels of
    property price inflation.In general the search for cheap labour internationally boils down to employing people from areas with low housing costs.Likewise immigrants to this country can only undercut local people's wages when they are in multi-occupation: when they form households with kids they get to be in the same boat as everybody else.

    Am now convinced that we should have LVT to discourage international capital flight by would-be emigres from dodgy places who home in on London's expensive property in posh areas ,with the ripple effect of posh people being pushed out and colonising formerly working class areas,like Notting Hill.The ripple effect spreads allover the SE.Richard Murphy is always going on about tax havens: the wonder is he is not stronger on LVT for international reasons.

  10. All 15,000 members of The Chartered Institute of Taxation, including Richard Murphy could be redeployed as quality and reliably engineers in the UK factories to raise quality and reliability to equal to Japan and Germany. The really inventive ones that thought up the K2 tax avoidance scheme, could work the in design depts. The almost 100,000 working at HMRC, could increase UK output and exports by Billions of £.

  11. I'm sure there is plenty more than this. You can basically take everything that's wrong with the economy and society (or land ownership, the tax system, the welfare system) and ask "Would this be better with an LVT-Citizen's Income system" and the answer is often yes. Sometimes the answer is "Would make no difference" but there's hardly anything which would be worse.