TTRTR wrote:

“Your shoes analogy is the work of a 13 year old economist right?

I used Adam smith as my inspiration. Actually, I think he is dead.

Your claim was gormless. 

TTRTR wrote:
“I'll let you in on a secret, there are assets, durable goods and consumable goods. Which category does housing fall into and which category do shoes fall into?”
 

The real distinction that is of interest, to your argument is fixed supply verses non fixed supply…

TTRTR wrote:
“Your removal of housing as a financial instrument would wipe out the economy as we know it, resulting in the largest depression ever, mass suicides, the destruction of wealth built up over hundreds of years and possibly the end of western civilisation.”
 

It would do little but reduce the price of housing which would allow productive enterprise to thrive and allow our labour to compete effectively around the world. As we are about to watch the price of houses crash anyway, what you are advocating could be no better than what I’m advocating, in this respect, anyway. I would give something to what you are saying though; the reform does need to be introduced gradually to allow time for all the useless sacks of tripe, that do nothing but trade real estate to find some way of productively employing themselves. This should be easy in a thriving real economy, though

TTRTR wrote:
“Good luck with your campaign & I hope you enjoy the steep learning curve you have ahead of you.”

 Why, thank you

I don’t think I’m going to be learning much in this exchange, but it is nice that you wish me well. I wish you well to. I hope, earnestly, that you get what you deserve.

TTRTR wrote:
“I especially love your bit at the end about taxing real estate according to the value of services it receives. Bloody hell I think we already have that, Council Tax. Rubbish is removed, streets are cleaned, parks are maintained etc etc out of that tax.”

The council tax is chargeable to tenants rather than the owners of real estate; this means the landlord gets to charge the tenant for services the tenant provides to the landlord.

If real estate were universally charged according to the value it receives from the community many OOs would find that their tax bill actually reduced along with the exchange price of their properties. The reason for this magic, is the effect such a tax would have upon the speculation of land itself, it would make such speculation more or less pointless and so land would be continuously available at a very low price, to new housing. This would mean that someone holding real estate has to always compete with this new availability of housing potential. But it also means that any productive endeavour will now have significantly lower costs and so such social problems, such as unemployment and homelessness would reduce considerably.  Another way to describe what is happening is that an entire, economically useless, sector is simply being cut out of the economy with the returns going to the worthy.

TTRTR wrote:
“That tax happens to be unfair as it penalises the smaller real estate holdings and allows the larger ones to get away scott free. The imputed rent taxation would do away with that problem altogether.”

The council tax is unjust, i agree..but it's not what i advocate.

Hi uncle,

I mean, that the landlord charges the tenant extra rent because of the presence of local services which the tenant is funding with his council tax. It’s quite a cute scam and the underlying reason why they tried to introduce the poll-tax. The services the the tenant provides the landlord are the extra value the local services give to the owners real estate..which comes out his (the tenants) pocket.

 To illustrate, imagine a block of 100 houses all with a tenant and an absent landlord. Each tenant pays into a central fund in taxes and also pays rent. The local government of this area decides to use the tax funds to build a school in the middle of this block of houses. Now the value of being in one of those houses has increased because of the presence of the new school and so the tenants have to compete with higher bids for occupancy of those houses and so their rent rises.

Winston Churchill comments on, more or less, same phenomena in the houses of parliament.
 

"Some years ago in London there was a toll-bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings appealed to the public conscience; an agitation was set on foot, municipal authorities were roused, and at the cost of the ratepayers the bridge was freed and the toll removed. All those people who used the bridge were saved 6d. a week. Within a very short period from that time the rents on the south side of the river were found to have advanced by about 6d. a week, or the amount of the toll which had been remitted."

Any advantage that is regionally specific is collected as rent and the exchange price of real estate by the owners of real estate; as the tenants are here providing the regional advantage by funding government services, any advantage they create goes to their landlords in higher rents.