The Homeys don't really deny any of this, they just see land as an 'investment opportunity' rather than 'privately collected tax' or 'private appropriation of publicly created wealth'.
From today's City AM:
33: THE MAGIC NUMBER
Over the last decade, we have seen the rise and fall of many housing-related indicators – from house prices, which fell 20 per cent and have subsequently bounced back by the same percentage, to private house-building, which is still 40 per cent below its 2007 levels.
The one measure that has hardly budged has been the proportion of average earnings accounted for by private rent. This measure has tracked in a consistent, narrow range of 31 per cent to 37 per cent, and has averaged 33 per cent since the fourth quarter of 2004. The stability of this measure is particularly attractive to investors.
That one-third figure is about right (it drifts up gradually as the economy grows, which is why the proportion is higher in high-wage areas than in low wage areas).
But the total rental value of land and buildings increases in line with the economy, and bears little relation to the cash cost of just providing the building (it must be far higher or else land itself would have little value). It's not like a hire car, where the rental income declines over time and which has to be scrapped after ten years.
So:
a) rent is just privately collected tax and
b) that one-third gives us a good guide to the potential amount of revenue from Land Value Tax. Expressing it as one-third of gross income is far less meaningful than expressing it as half of net income after tax; get rid of income tax etc. and rental values would rise to nearly half of GDP. Seeing as a sensible government only needs to spend about one-third of GDP, that leaves plenty left over for personal tax-free amounts or a modest Citizen's Income (same thing, really).
Debate Magazine
