Killer arguments against LVT, not. (6)

I've now read through the whole thread, and Richard Allan (who has the patience of a saint) has actually responded perfectly sensibly and reasonably to most of the other wilfully misleading statements about Georgism, but I'll finish off today's series with this:

Laird: "The fundamental premise of LVT enthusiasts is that the private ownership of land is improper and/or immoral, that it all somehow belongs to Society writ large. That is a viewpoint with which I do not agree, but it is an article of faith. This is a theological discussion, which is always a waste of time; no one is ever convinced."

Again, not true, not true in the slightest (certainly not in my case). It is neither proper nor immoral, it is rational and desirable that people own land. I do not do theological discussions - it's usually people arguing against LVT who indulge in theology and beliefs devoid of economic logic, facts, figures etc, whereas I stick to what is measurable and logical.

FACT - land values are driven by location.

FACT - the owner of any particular plot of land does not (in any significant way) contribute towards or pay for all the things that create that location value, and he certainly does not own them. So my argument is, as it is fair to make a tenant pay to his landlord for the value of all things that make up the 'location' (which does not belong to the tenant and which the tenant has not created), surely it is also fair for the landlord to pay for the value of those things? It is society in general that has created them, so the government can collect all that 'rent' and use it to pay for core functions, replace other taxes, repay national debt and/or dish out as a Citizen's Dividend.

FACT - governments need to raise taxes. Taxes on incomes and production are Very Bad Taxes, they have deadweight costs, they make us collectively poorer, however efficiently the proceeds are spent or redistributed (which they aren't, different topic). Land Value Tax has little or no deadweight costs.

FACT - We have a tax that is fairly close to Land Value Tax in this country, namely Business Rates - the only difference being, that Business Rates includes the rental value of the building, not just the location/land element. And then the commercial landlord pays income tax on corporation tax as well. With LVT and no income/corporation tax, a lot of these landlords would be better off! And Business Rates, by large 'work' just fine, it collects revenues without putting anybody out of business (a business that can't even make enough money to cover the Business Rates will fail and be replaced by a more profitable business - that's called 'creative destruction').

FACT - people with high incomes have, on the whole, the biggest cars, send their kids to the best schools and go on the nicest holidays - that's the whole point of being rich. By and large, people with high incomes also live in the biggest and nicest houses. At the very margin, there may be some low income people* who would have to trade down (if the increase in LVT they pay exceeds the cuts in all the other taxes that they no longer have to pay), but so what?

a) All LVT would do is speed up the process by which people with high incomes live in the biggest and nicest houses and also pay the highest amount of tax, but on an entirely voluntary basis - if high income people are happy to live in a small semi-detached and save the tax, then good luck to them.

b) For every low income person who would have to trade down, there would be ten low income people who are renting, who would benefit enormously from the shift away from income tax, and ten other low income people who own a small house who would break even or end up better off.

* We've done the Poor Widow Bogey before, bored now.