Debate Magazine

Killer Arguments Against LVT, Not (452)

Posted on the 19 February 2019 by Markwadsworth @Mark_Wadsworth

I've not done one of these for a while, mainly because there aren't any but the Homeys haven't even bothered rehashing old ones.
From here, two years ago:
Chris: The average income is £27k a year, a yearly increase in tax of £2,591 to a household with one working parent would represent almost a 10% increase in income tax. Any Government that attempts this will make the poll tax riots look like minor in comparison and even more so when their manifesto states that no one earning under £80k a year will pay more tax – it would be a blatant lie.
Most people are only vaguely aware of how much income tax and NIC they are paying; very few are aware of how much NIC their employer is paying. What people care about is their net pay; they are also largely blind to domestic tariffs (i.e. VAT).
Administratively, the best way of collecting LVT is through people's PAYE codes, i.e. deduct directly from wages or private pension, get it over with, it's a straight swap.
We can divide UK households into four categories
- working owner-occupiers (about 40% of all households)
- working private tenants (about 20% of all households)
- pensioner owner-occupiers (about 20% of all households)
- people in social housing (about 20% of all households, a mix of working, not working and pensioners)
Let's boil it down to five households and assume income tax/NIC is reduced by £5 and £5 is collected in LVT instead:
1. The two households in the first category will each save one-third of £5 = £1.67 and pay £1 LVT instead; their net pay goes up by 67p.
2. The household in the second category will save one-third of £5 = £1.67; their net pay goes up by £1.67.
3. The pensioner household is now paying £1 more tax; if they can't afford it, they can roll up the unpaid tax and their heirs can pay it off after they've died.
4. For people in social housing it is difficult to say who pays more or less; on the whole it will average out to not much either way.
5. Landlords will be paying a shed load more in tax, but it's a tiny minority.
I find it unlikely that pensioners, their greedy heirs and landlords are going to start riots, so it's not a problem.
Chris also overlooks that the Poll Tax Riots happened because Thatcher wanted to get rid of a progressive tax (Domestic Rates) and impose a regressive one (Community Charge). By reverse logic, they won't be any riots if a government did the opposite, and replaced regressive taxes (especially NIC, Council Tax, VAT) with a progressive one (LVT).
So his comment is about as fucking stupid as saying "Students rioted when LBJ and Nixon ramped up the Vietnam War. Therefore we can expect them to riot again if Nixon throws in the towel and withdraws troops from Vietnam."


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