Magrathea
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Posts:435
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| 04/01/2008 10:24 AM |
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Right, sliced and this is precisely the opposite of what is needed to create efficient use.
People are actually paid to hold land and ...
1 Holding land, in itself, does nothing productive
2 Holding land restricts and prevents others doing something productive with the land and so causes costs for others
The two points together mean that people are being paid (rewarded) for creating economic inefficiency (costs) for other people.
Not only that, but they are being rewarded with wealth that is created by everyone together in concert; community created wealth.
It's quite mental
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chefdave
Activist
Posts:482
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| 04/01/2008 10:37 AM |
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| With regards to Georgian economics, the law of unintended consequences will kick into place. Instead of landowners reaping the rewards from the things they didn't create the community instead will benefit from land tax. However once the money is then spent on the local area for example more schools and hospitals, recreational areas etc land tax will rise even further. Resulting in a curious situation whereby resident will actually demand less of these things because they cannot afford the comensurate rise in tax! |
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Magrathea
Activist
Posts:435
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| 04/01/2008 10:49 AM |
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| Chef; it's an interesting thought, but I don't think it's true. People will rather arrange themselves around the level and type of provision that is the most efficient for them - families will arrange themselves around schools etc, etc. What you wont see is dog-in the manger (speculation) behaviour in which people who don't want access to services buy up land in serviced areas simply to sell this access to services on to others; they wont do this because they will be charged for the value of the service themselves and so reap no profit by selling it on. AS an interesting thought experiment, imagine a rail service to a town that provided by land rent revenue - is the rail service better funded if the fairs are zero? That question needs a bit of thought because if the fairs are zero the taxation returns on land value in the town will be higher, but so will the benefits to being in the town. |
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chefdave
Activist
Posts:482
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| 04/01/2008 10:58 AM |
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| I have to go out now but thanks. I'll read through it properly and have a think about it. |
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slicedcake
Activist
Posts:314
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| 04/01/2008 11:24 AM |
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A combination of taxes would still be wise I think, but reduced VAT/income/council tax etc would be possible if some land tax is introduced. A [i]gradual[/i] re-balancing of taxes might be the way to go.
Council tax (simliar to the old "rates"?) might be a bad implementation of a property tax.
In a particular area, council tax only seems to vary by a factor of 1:3, so the owner of a property valued at £4Million would pay only 3 times as much as a £50K band A property owner. -Approx. 100:1 "value" ratio.
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Magrathea
Activist
Posts:435
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| 04/01/2008 1:41 PM |
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Sliced cake
"A combination of taxes would still be wise I think, but reduced VAT/income/council tax etc would be possible if some land tax is introduced. A [i]gradual[/i] re-balancing of taxes might be the way to go. "
I agree entirely, implementation should be gradual. But i think it would become clear, as taxes were shifted away from people's efforts and onto the land value they hold from others, that the benefits for working people and the economy in general are so profound that there is little point stopping halfway.
There is really is no point in taxing something else other than land, because taxing land produces economic benefits in addition to the services created by the revenue collected (no other tax really acts like this, all other taxes generate economic costs, land tax doesn't)
Slicedcake
"Council tax (simliar to the old "rates"?)"
Similar ..but one very important difference is that tenants rather than landlords pay it.
There has been a significant reduction in the taxation falling on real estate since the early eighties and this has contributed to size of our present boom.
slicedcake wrote:
"might be a bad implementation of a property tax.
In a particular area, council tax only seems to vary by a factor of 1:3, so the owner of a property valued at £4Million would pay only 3 times as much as a £50K band A property owner. -Approx. 100:1 "value" ratio."
It's an absolute dog's breakfast
It falls on tenants rather than owners, this encourages landlord-ism and speculation
It falls largely on improved value rather than land value, this discourages improvement and encourages speculation
The local governments have been chasing their tails for years; trying to pay for rising costs in a high real estate inflation environment and at the same time trying to pay for it by leverage taxation on people who are themselves mostly victims of high real estate inflation. Meanwhile, cruddy landlords and land speculators, who benefit effortlessly from asset inflation, get a near total free ride.
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slicedcake
Activist
Posts:314
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| 05/01/2008 12:34 PM |
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"It falls largely on improved value rather than land value, ..."
But how can anyone put a figure to land value instead of total market value? We might have touched on this subject before. Can a strictly objective formula be used?
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SquatNow
Activist
Posts:504
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| 06/01/2008 12:18 PM |
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A formula is used to calculate every other tax.
Plenty of formulas exist to calculate land vales.
It really isnt that difficult. |
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SquatNow - Web site now ready!
www.squatnow.com
Promoting Social Squatting |
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chefdave
Activist
Posts:482
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| 06/01/2008 1:05 PM |
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Re mine and squatters earlier disagreement concerning the Lords.
"Money Bills
A Money Bill is a Bill that deals with national taxation, public money or loans and their management. A Bill is only considered to be a money Bill if the Speaker of the House of Commons agrees that it is. The Speaker signs a certificate to indicate this. The House of Lords has no power over money Bills."
http://www.explore.parliament.uk/Parliament.aspx?id=10262&glossary=true |
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SquatNow
Activist
Posts:504
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| 08/01/2008 4:08 AM |
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| So if we get in power we can just declare all bills to be "Money Bills"??? |
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SquatNow - Web site now ready!
www.squatnow.com
Promoting Social Squatting |
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chefdave
Activist
Posts:482
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| 09/01/2008 5:47 PM |
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| Great idea, the less decision makers the better! |
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Magrathea
Activist
Posts:435
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| 11/01/2008 4:42 AM |
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Sliced cake wrote:
"But how can anyone put a figure to land value instead of total market value? We might have touched on this subject before. Can a strictly objective formula be used?"
Estate agents do it regularly as part of their calculations. It is easier to evaluate the land value than it is the total market value of a house because there is less to consider in a land value calculation (simply location and size rather than number of bathrooms and the state of the roof). The effect of overtaxing a site would be to reduce it's exchange price dramatically and so there is to some extent a self correcting mechanism. There is also some argument for leaving a 'safety zone' of land value to make over-taxation practically impossible, this would sadly, leave some small freebie profit for landowners, but nothing that would encourage speculators or deliberate speculation; As for an objective equation; whatever equation is used, we are still using an evaluation because it is impossible to sell each site to actually measure its market price; however, the same is true of our present local taxation, except this taxation is firstly trying to evaluate THE WRONG THING for taxation and then compounding the idiocy by also charging THE WRONG PEOPLE for it. :) |
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slicedcake
Activist
Posts:314
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| 11/01/2008 9:27 AM |
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Magrathea:
Estate agents
do it regularly as part of their calculations. It is easier to evaluate
the land value than it is the total market value of a house because
there is less to consider in a land value calculation (simply location
and size rather than number of bathrooms and the state of the roof).
Sounds reasonable.
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slicedcake
Activist
Posts:314
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| 13/01/2008 10:21 AM |
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Posted By slicedcake on 11/01/2008 9:27 AM
Magrathea:
Estate agents
do it regularly as part of their calculations. It is easier to evaluate
the land value than it is the total market value of a house because
there is less to consider in a land value calculation (simply location
and size rather than number of bathrooms and the state of the roof).
Sounds reasonable.
Can any specific methods be mentioned?
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