Land Value Tax (LVT) is a levy on the unimproved value of land, it disregards the value of building, personal property and other improvements to real estate. LVT has been referred to as "the perfect tax" and the economic efficiency of a Land Value Tax has been known since the eighteenth century. LVT is a progressive tax in that the tax burden falls on titleholders in proportion to the value of locations, the ownership of which is highly correlated with overall wealth and income.
Land Value Tax would be payable each year depending on the location and size of a plot. We advocate that it should replace some existing taxes. It should not add to the overall tax burden, its purpose is to shift tax away from income taxes . Land means the site alone. A vacant plot in a row of houses would be taxed the same as a similar built-on plot. It taxes the size and location of he plot. It does not tax buildings or other works.
There are three strong arguments for the tax. It is socially just. It is the best way of financing infrastructure. And it is economically efficient.
First social justice. Property taxes are fairer than income taxes. In the UK the wealthiest 1% own almost 25% of all property. Today we base the tax system almost entirely on income rather than assets. This means the very rich avoid paying their fair share of taxes. This entrenches inequality.
Second, infrastructure. The benefits of infrastructure are uneven. A fast rail line from London to Birmingham will provide a windfall for property owners in those locations. It won't benefit other locations nearly as much. At present every taxpayer, everywhere, pays. Land value tax corrects this. It recoups costs from those who benefit the most.
Third, economic efficiency. Land value tax is payable whether or not the owner actually uses the plot productively. It penalizes owners of empty houses; owners of run-down sites. Unlike now, they would be taxed at the same rate as a site in productive use. This would promote inner city regeneration. There is a myth that Land Value Tax would destroy green spaces. In fact, the City of New York made a profit when it created Central Park. It greened over existing built-up areas. The increased property tax from surrounding neighbourhoods paid for this.
In summary, Land Value Tax is pro-enterprise and green. Its introduction would allow other taxes to be reduced; especially those on income and profits. Enterprise would be better rewarded. Building on a property doesn't change its location value. The location value of land comes from geography -a beautiful view; or from investment elsewhere - for example a high speed railway. Location value is maintained by society. It just and efficient to tax it.
Veteral Land Value Tax campaigner Fred Harrison flings down the gauntlet to the Libdems in this thought provoking video, featuring contributions from former Liberal MP Michael Meadowcroft. It is a well produced and gives a straightforward and easy to understand presentation of the major pro-LVT arguments, complete with specific illustrations.
The Somerset Levels are flooded, and the Environment Agency is taking flak. But a quick look at way that tax is collected for drainage shows that trouble was inevitable.
ALTER needs to extend its thinking to taxation issues beyond LVT. Taxation is an extensive subject, and we may not have the capacity to develop a comprehensive position by ourselves. Therefore it is worth looking at examples where such work has been done.
By now over 13 million people worldwide have seen the Paxman 'interview' of Russell Brand on Newsnight, which followed his guest editor-ship of New Statesman.
In 1999, when Chief Executive of the Henry George Foundation, I wrote a fairly lengthy 'Q&A' on LVT, as a spin-off from a research project that I had been funded to do: looking at how LVT might be introduced in the UK. This project had involved surveys of 'stakeholders' in property taxation, in which many questions had been raised. Questions Around The Smart Tax was designed to put together all the answers which I had been giving to these stakeholders (and others) and engender discussion. It also included the results of the surveys.
The conference will give ALTER members and supporters an opportunity to discuss the strategy needed to achieve our aim of implementing LVT. Simon Hughes, Liberal Democrat Deputy Leader of will join us in the afternoon after 3pm. The provisional Agenda is shown below. There will be a fee of £8 per head for ALTER members and £15 for non-members. Tea and coffee is included in the fee but not lunch. To reserve a place at the conference please e-mail ALTER Treasurer Catherine Hodgkinson (CEHodgkinson@aol.com). Payment should be made (either cash or cheque) at registration. If you would like to book a place at the lunch (estimated cost £12/£15), please contact Catherine.
