Debate Magazine

Killer Arguments Against LVT, Not (425)

Posted on the 20 November 2017 by Markwadsworth @Mark_Wadsworth

Ben Southwood @bswud referred to this article in The Guardian:
Construction has begun on a $2bn (£1.5bn) scheme to reclaim land from the sea around Monaco so that more luxury apartments can be built for the thousands of extra millionaires expected to move to the principality in the next 10 years...
... and he commented thusly
"The easier this is, the more value a land value tax would destroy"
Which is about as wrong as it would be humanly possible to be. Quite the opposite!
Let's remind ourselves of the facts:
1. Monaco has no or low income tax, it is a 'tax haven'.
2. The main reasons why apartments/land in Monaco is so expensive is because the world's super rich are prepared to pay for the privilege of not paying income tax. The extra few million you pay for a flat in Monaco instead of the much more pleasant Nice is broadly speaking equal to the net present value of the future income tax saving. If the Prince so wished, he could collect that value via LVT (and to some extent he does).
3. The Prince of Monaco is the 'government' from the point of view of the company doing the reclamation. They need his permission before they can do anything.
4. As The Telegraph explained:
In recent days, Bouygues, the construction company, began work on the foundations, starting with dredging operations via a giant offshore vacuum that spits out sediment at a depth of 200m.
The principality is not paying a centime for the project but will receive an undisclosed payment for the concession and will own public buildings on the new site estimated to be worth €500 million.

So the value of the buildings which the private company will hand over to the Prince is effectively a lump sum LVT in advance. The effective tax rate is clearly less than 100% or else the (risky) project would not be going ahead, but it is safe to assume that the Prince wangled as much of it as he could.
To sum up: The Prince/the government of Monaco actually run a Georgist tax system - low income tax and high land values/government income from land values (a lot of Monaco is owned/controlled by the Prince/the government). So it would be more accurate to argue that this reclamation is only happening because of and despite LVT!
If France shaped up, scrapped income tax and collected LVT instead, the value of apartments/land in Monaco would collapse. It would be worth no more or less than in Nice. As in most cases, it is government action which causes land values, in this case, the French government. It's just a question of who gets it.

You Might Also Like :

Back to Featured Articles on Logo Paperblog

These articles might interest you :

  • One Week


    It's been just over a week since we landed in Tashkent. The trip was uneventful, other than William acting like a typical 17-month old baby and keeping... Read more

    The 15 July 2018 by   Sherwoods
  • Not Quite Eschatology

    Quite Eschatology

    Realized eschatology, if you’ll pardon my French, is a term that describes the “already/not yet” aspect of the “end of the world. Read more

    The 15 July 2018 by   Steveawiggins
  • 8 Lessons From The Field On Building A Premier Brand

    Lessons From Field Building Premier Brand

    Every new business dreams of becoming the premier brand in their space, like Starbucks is to coffee, and Apple is to consumer electronics, but they have no... Read more

    The 15 July 2018 by   Martin Zwilling
  • Superhero Doll Hopes to Help Young Black Girls Beat Low Self Esteem

    Superhero Doll Hopes Help Young Black Girls Beat Self Esteem

    FirstLadyB | B Inspired By Entertainment News Young black girls battling lo... Read more

    The 15 July 2018 by   Firstladyb
  • 5 of the Best Places in Glasgow for Ice Cream

    Best Places Glasgow Cream

    62 total views, 62 views today 5 of the Best Places in Glasgow for Ice Cream Whether it sunny or dull a “pokey hat” will always bring a smile to a face.  Here... Read more

    The 15 July 2018 by   Emma
  • GoGoHares!


    Following the flight of camp dragons, the parade of vivid jumbos and the troupe of panto gorillas in our midst comes an assortment of big-eared, bright-eyed... Read more

    The 15 July 2018 by   Jackscott
  • Brew the Perfect Iced Tea by TE-A-ME

    Brew Perfect Iced TE-A-ME

    Be it any season, staying hydrated is important and what better way to do so than by enjoying a nice cold glass of tea. Yes, make your water interesting by... Read more

    The 15 July 2018 by   Dr.jenifer Sayyed