Debate Magazine

Killer Arguments Against LVT, Not (344)

Posted on the 02 November 2014 by Markwadsworth @Mark_Wadsworth

Here's an interesting bit of one-sided non-logic, from the BBC:
A Labour council in London has rejected its party's policy on the "mansion tax", saying the plans would affect its residents unfairly…
It said the policy could result in "many local people being forced to move out of the borough".

I can understand Labour councillors in that borough objecting - they know that LVT will speed up the inevitable process by which lower income people are displaced by higher income people, thus reducing the likelihood that they will be re-elected.
I'm not sure that's a relevant argument, it strikes me as being naked self-interest and fails on the facts - London has a very transient population, from personal experience I'd guess that considerably less than half the people working or living in London are natural born Londoners. The majority are from elsewhere in the UK, elsewhere in Europe or are 'first generation immigrants'. And all people who live somewhere are 'local'. The new arrivals are just as 'local' as those who have moved away.
But if Labour councillors are openly opposing it, by reverse logic potential Tory councillors in those areas ought to be cheering on the idea of higher taxes on residential land values, because that means there will be more high earners in the area who are more likely to vote Tory. In low value areas, the reverse applies, of course.
Anyway, the valid counter argument to all this 'political' crap is to remind ourselves of the natural justice aspect of LVT:
1. There's the traditional argument that land values are generated by, and hence belong to, the whole of society. So the proceeds should be collected and spent on things which benefit society as a whole, and/or spent on universal benefits (be they in cash or in kind, such as health and education).
2. The equally compelling argument - made much less often - is that with income tax etc, those who are forced to pay the most tax do not receive anything in return (in fact, they are less likely to use 'free' state education, the NHS or claim welfare benefits). But with LVT those who are willing and able to pay the most get something very real in return: they get to occupy the nicest houses for a lower price than otherwise and get to keep more of their own income and personal wealth.
Put 1. and 2. together and that seems perfectly just and equitable to me.
So what this Labour council is supporting is Blue Socialism aka Home-Owner-Ism aka Faux Libertarianism. People with high incomes have to subsidise people with low income in high value homes; people on low incomes in low value homes are ignored and people on high incomes who own little or no land are completely screwed on both sides of the equation.


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