Debate Magazine

Killer Arguments Against LVT, Not (355)

Posted on the 25 February 2015 by Markwadsworth @Mark_Wadsworth

I must have done a couple of similar debunkations before, but this is another one which has been bugging me but for which the answer is blidingly obvious if you stick to, er, actual hard facts.
The KLN goes thus: "Ah, but if somebody loses their job, how will they pay the LVT?"
Let's gloss over the fact that the two-thirds of the population have exactly this problem with rent or mortgage payments (i.e. privately collected LVT) and that somehow or other as a society we cope with this (via mortgage holidays, housing benefit or mortgage subsidies, social housing etc), it's not a big problem if you look at the numbers on short term unemployment.
According to this:
... the short-term unemployment rate, i.e. the number unemployed for six months or less expressed as a percentage of the labor force, fell to a six-year low of 3.3% over December-February and is below its 3.5% average since 1995. This suggests that job losers and people entering the labor force are finding work relatively swiftly – consistent with the message of strong demand from the vacancy rate. The current 3.3% rate is close to the 3.2% level reached before the start of the last interest rate upswing in November 2003.
So one in thirty people are between jobs at any one time. A lot of that is probably 'voluntary' and many of those will have a partner who is still in work and who can pay the LVT. So call it 2% max.
As long as there are rules in place to distinguish between people whose employer has gone out of business/who have been made redundant through no fault of their own/are likely to find another job soon; and general shirkers/the long term unemployed, they could simply exempt such people from LVT. A crude way of doing this would be to give such people a cumulative six-month exemption in any rolling five or ten year period, or whatever. There is no perfect right or wrong formula.
So there would be a non-collection rate of 2%, which is no lower than for any other tax anyway, tuppence ha'penny in the grander scheme of things and a great reassurance to everybody in general.
And for the long term unemployed and sporadic earners, there's always social housing (which is like LVT and a Citizen's Income rolled into one).


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