Edward Lucas has published a great article in the Times on why sitting on our hands while the housing crisis spirals out of control is no way forward. He concludes:
"If we do not deflate the housing bubble and make its beneficiaries pay more, we will sooner or later have a government elected by the majority of the population who are suffering from its effects. It will run housing policy based on what it regards as fairness; property rights will come second - or nowhere."
ALTER Vice Chair Dr Tony Vickers has published a position paper which shows how the housing crisis should be solved through tax reforms, beginning with LVT. At present home owners cream off unearned income from the economic activities of others, a harmful effect which reduces GDP by 20%. He shows that any strategy which reforms only business rates will lead to market distortions, and advocates a Homestead Allowance and combining property and income taxes. The full report can be found at The Real Hope for Home-ownership.
London faces an acute shortage of developable areas. A new report 'Tax Trial: Land Value Tax for London?' was released today by London Assembly Member, Tom Copley which estimates that a new Land Value Tax (LVT) could provide the incentive to build over 200,000 new homes in the capital.
Author of the report for the Planning Committee, Tom Copley AM, said:
Fractional reserve banking (where banks lend out more money than they have in reserve) has made a lot of bankers very rich, but the taxpayer is forced to bail them out when things go wrong. Some of the Swiss are sick of giving money to bankers and have lauched a bold initiative which will now be put to a popular referendum: The Swiss Sovereign Money Initiative.
In January 2015 the First Minister, Nicola Sturgeon, announced her intention to establish a cross-party Commission on Local Taxation.
(Link here: http://localtaxcommission.scot/)
The Scottish Conservatives chose not to engage and established their own Commission which is yet to report.
All other political parties are represented alongside various other NGOs and interest groups such as the Joseph Rowntree Foundation and the Citizen's Advice Bureau.
The Commission had its first meeting in February and has conducted a number of both sessions, both public and private, throughout Scotland throughout 2015.
The Commission was due to report in November but has delayed its publication date until December (likely to be the 8th or 15th).
There has been some consensus over the need to reform Council Tax in particular (Non-domestic (business) rates were sadly removed from the Commissions remit at an early stage).
There has been no real agreement on the mechanism for reform.
The Commission is, therefore, only going to provide a comprehensive range of policy options rather than one clear conclusion.
In this respect can be considered less far reaching than the Burt Review of 2006 which covered broadly similar territory.
Andy Wightman is a member of the Commission representing the Scottish Greens and has been a strong advocate of a form of Land or Site Value Taxation.
The report is therefore likely to make recommendations about the future benefits of LVT but fall short of endorsing the policy directly.
Having seen some of the early drafts I would anticipate that it will recommend that more research be done into the separation of building and land prices in Scotland before the introduction of any form of LVT.
In a damning report produced for the League against Cruel Sports, Andy Wightman and & Dr Ruth Tingay shows how Scottish grouse shooting estates receive lavish govermnent subsidies. One estate, Glenogil, which is managed as a grouse shooting estate, receives agricultural subsidies from the Scottish Government. The presence of a sheep flock (used to 'mop up' ticks that would otherwise attack the grouse) is sufficient to qualify the estate as an agricultural holding. In 2010, the estate received £368,787 in public funds and in 2011, £346,757. Such taxpayer provided funds allows the building of electric fences and private roads that scar the countryside so that well heeled grouse shooters are saved the effort of trekking across the moors. Meanwhile, employees on grouse estates are paid less than the national minimum wage.
Governments around the world are wrestling with the problems of enormous debts, low growth, high unemployment and a gap between the demands of public expenditure and what can be raised through taxation. This problem has been acute since the financial crisis, but has been a hallmark of western economies for decades.