From Conservative Home.
First the author agrees with this from a pro-LVT article in The Economist:
All that changes is the price, which falls until it exactly offsets the discounted cost of paying the tax forever.
Correct, LVT is a one-off thing and does not affect people in the future. It's the opposite of deficit spending.
Then we get this:
However... a fundamental objection still remains. A land value tax, however modified, applies to the whole value of the land not just the capital gain – and therefore amounts to the gradual confiscation of an asset purchased out of taxed income.
(On the facts, most land was not "bought out of taxed income" anyway; anybody who bought more than fifteen or twenty years ago effectively got the land for free. And if anything, that is an argument against income tax, not against LVT)
But he's now completely contradicated his first correct statement: the LVT is borne entirely by current owners in terms of lower future selling prices. (And most of those owners would benefit from an equal and opposite reduction in other taxes. The sooner we do the tax shift the more people will benefit i.e. if they move to LVT when you are 20 years old you benefit much more than if the move to LVT when you are 40. So why bugger about for another 20 years?.)
To keep it simple, let us assume 100% LVT, so land would be bought and sold for plus/minus nothing (i.e. land and buildings would be sold for the value of the buildings).
If land has no value then that value cannot be confiscated. The future LVT payments do not affect the future purchaser; instead of handing over the capitalised value of the future rent in one big chunk to the vendor, he pays much smaller amounts every year to the government.
Debate Magazine
