Debate Magazine

Well That's Not "free" Then, is It?

Posted on the 04 December 2013 by Markwadsworth @Mark_Wadsworth
From The Evening Standard:
There may be no such thing as a free lunch but free rent is on offer - providing you have an unique skill.
Increasing numbers of householders in the capital are offering free rooms in exchange for services, from Chinese lessons to carpentry.
A leading property website has seen the number of Londoners offering a free room almost double in the last two years.

As I've said, we live in a barter economy.
Clearly, using some common unit of currency, be it gold coins or numbers on computer screens to denominate one half of each transaction makes things much simpler and more efficient, which is why such systems have developed independently thousands of times in various forms all over the world from ancient antiquity onwards, but when it comes down to it, you swap goods and services for goods and services.
But paying your rent in the form of Chinese lessons or carpentry is still payment, and the accommodation is not free.
And strictly speaking, both halves of the transaction are taxable as well; if the Chinese tutor gives £500 of lessons in exchange for £500 of rent, the tutor is supposed to pay tax on the £500 non-cash income (the rent) and the landlord is supposed to pay tax on his £500 non-cash income (the lessons). There is also the quirk that if a man marries his housekeeper, the output/exchange remains the same but the tax base suddenly falls.
Which conveniently illustrates that income tax is double taxation and the only tax which is 'one-sided' is LVT, it is a user charge on the benefits which the owner/occupier gets from society in general and nothing else.

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