Debate Magazine

Killer Arguments Against LVT, Not (486)

Posted on the 29 October 2020 by Markwadsworth @Mark_Wadsworth

"Unknown" submitted a couple of KLNs, you can tell his heart wasn't really in it:
1. The landlord owns the property and land it stands on because of homsesteading. Nobody has moral claim to it other than them.
Poor start. A landlord is clearly not "homesteading" and owns more land than he needs. There's no such thing as a moral claim to land, it's a legal and economic concept, so whether or not a landowner (or anyboyd else) has a "moral" claim to land is neither here nor there. But landowners do not have a moral claim on a large chunk of everybody else's output and labour, i.e. the taxes on output and earnings which are used to pay for those government services which give land its value in the first place.
2. Land is just one more scarce resource. There are many, many people who live fulfilling, economically productive lives never owning land.

If we put a 100% tax on chicken consumption, guess what? Everybody would eat turkey McNuggets.

Georgism is stupid because no scarce resource is unique. They're all scarce and thus not special. There's even plenty we're not making more of. The idea of one of them being the one thing we can tax is just ridiculous.

That's kitchen sink stuff.
I don't think that land is scarce at all, 99% of the UK population lives and works on less than 10% of UK surface area, the developed bit. Developed land = geographical areas where society in general and the government in particular make land valuable, that's where people want to live, some trade-off between good jobs, shops and leisure opportunities, good schools, low crime, good transport links, nice views, a bit of open nature - or not as the case may be. Developed land is 'scarce' because providing or organising all these services is very expensive and complicated (simply owning land is the easiest bit); it is the services which are in limited supply.
It is quite true that many people don't own land. Most of them are economically productive, but their lives are all the less fulfilling for having to fund land values out of their taxes AND pay rent for somewhere to live or do business. But if they can manage - and they can - why can't everybody? Is there a special class of people who can only lead "fulfilling, economically productive lives" if they own land? How is a landlord "economically productive" anyway? Any tenant who buys the place he was renting must know that they aren't.
The chicken-McNuggest analogy is fatuous. Land Value Tax is just landowners paying the government for the value of the services they receive, it's a user charge, like paying for the market price for chicken or turkey McNuggets. You wouldn't say that McDonalds charge a 100% tax on turkey McNuggets, they just charge market price. And the government can "tax" land rental value at 100% (for administrative reasons, call it 80-90%) and the land is still there, the same services/benefits are still being provided at that location, and demand for land is unchanged.
As mentioned, whether land is scarce or not is irrelevant. What makes it unique is the fact its "value" is actually the value of services and benefits being provided at that location. My car doesn't change in value if I buy it in Wales and park it in Kensington. If you could buy farmland in Wales and move it to Kensington, it would go up in value a million times over. That's why land is an ideal source of government revenues (there other equally ideal taxes, like fuel duty, but they are minor in comparison), and certainly far better than taking arbitrary percentages of business output (VAT), wages (National Insurance) or income generally (income and corporation tax).


Back to Featured Articles on Logo Paperblog

Magazine