I haven't done one of these for ages, mainly because I've done them all and Sobers isn't trying to invent new ones. However, I tend to ramble on a bit with my rebuttals, and would like to simplify them as much as possible.
Here's a classic KLN:
"LVT would discourage improvements, like the Window Tax did. Buildings would fall into disrepair." Sometimes expressed as "Developers would all go out of business."
Short answer: only if the tax payable on each plot were directly related to the current condition of any buildings and improvements on them. As long as the owner's actions have no impact on their tax bill, they will just get on with making the best of things (or not, according to attitude and available cash). ENDOF.
I have always said that valuations will/should be carried out as follows:
1. Grouping, banding and averaging the values of similar buildings/plots within each smaller valuation area,
2. Assuming that the average £ values for such buildings/plots in the lowest value areas represents the £ zero location value baseline,
3. Subtracting the baseline value from the average values for similar buildings/plots in each other smaller area across the whole country,
4. The excess in values for similar buildings/plots over this baseline in all other smaller areas is due to their location alone, which is what LVT should be taxing.
5. The amount payable for all similar buildings/plots in each smaller area will be exactly the same, regardless of the condition of the building itself.
6. As a final tweak, compare the valuations for different types of building in the same smaller area. For example, semi-detached houses should be less than detached houses and more than terraced houses, and maybe apply some sort of fixed ratio between overall types, for which we can use the normal Council Tax bands, so larger detached houses pay 18/9 and bedsits pay 4.5/9 of whatever is payable for a bog-standard 3-bed semi with one off-street parking space, which would be 9/9.
This has the merit of simplicity/cheapness if nothing else. Whether those valuations are based on total selling price or rental values, and whether they are adjusted down to ignore the likely value of the buildings and improvements are secondary issues on which I am heartily indifferent, I don't think it really matters.
Tactically, it is better to go for a low official valuation (and apply a higher tax rate) to get the target amount. This reduces the number of appeals against the valuation, and people tend to accept the tax rate as a given. Economically, as long as average selling prices are higher than rebuild costs, which can be taken from typical insurance quotes, then the tax is less than 100% of location value and no harm done.
While we're on the topic, there is a long list of features of the current tax system which actually do discourage improvements, with which I won't bore you. These reduce the after-tax benefit of making them by about half.
The follow up KLN is then this:
"But the LVT will take money out of people's pockets, leaving them less to spend on improvements."
All taxes do that, that is the whole point of taxation. Whether you've paid £1,000 income tax, NIC, VAT or LVT leaves you the same net cash. At least with LVT, you know that you get twice the bang for your buck if you do pay for improvements. And a large part of the tax money spent by govermnent goes back into maintaining location values. With LVT, that would be a primary aim of govermnent - they are like a landlord business trying to maximise their rental income (on behalf of their 'owners', being every single voter in the country, who get dividends in cash or in kind) by keeping things as nice as possible.
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