GarryB wrote:The core of the problem is that the working man generally pays taxes, while those earning from wealth spend a little extra money to pay accountants to minimise or even eliminate the tax they pay.
The people who earn the most money tend to pay the least in tax because tax law is so complex but favours the rich...
LVT is cheaper to collect than other taxes and, unlike VAT does not impose collection costs on businesses.
LVT cannot be avoided. Offshore trusts and wealthy non-residents, the ultimate owners of much of the most valuable land in any country, would make a fair contribution any country's revenue.
BENEFITS OF LAND VALUE TAXATION
Land is a natural resource that existed before mankind walked the earth.
Land values are created by the whole community because of our need to use land for housing, education, public services, agriculture, mining, business, transport and recreation.
Landowners do not create land values. It is the efforts of others that generate land values. (Imagine the effect on the price of housing land in an area which has no public services).
Expenditure on public services usually leads to an increase in land values. For example, with few exceptions, new motorways or rail systems lead to dramatic increases in land prices.
The planning process often provides landowners with huge windfall gains. Not only the site to be developed, but often also adjacent or related sites.
Natural justice. Land values belong to the whole community and not just a few landowners.
Land Value Taxation (LVT) is a just and fair way of paying for public services. Every site in the country would be valued according to its permitted planning use and the Government would decide the rate of LVT to be applied nationally. The tax would be assessed annually (although monthly payments could be made).
Compared to taxes on buildings LVT provides a broad tax base because it would include all empty properties and empty sites.
LVT would encourage new capital investment rather than sterile land speculation as it would encourage a shift of private investment from land speculation (which creates no extra land but only higher land prices) to productive enterprises.
LVT would encourage the use of empty sites zoned for development, creating more job opportunities and wealth.
LVT would help avoid urban sprawl. As brown field sites would be developed within towns and cities it would be unnecessary to permit urban sprawl. Compact towns are also more efficient in their use of resources for transport and other services.
LVT could not be avoided. (Unlike income tax and business taxes where tax avoidance experts are in great demand and the ‘shadow economy’ flourishes to evade taxes.) Every landowner would be required to register their land and to pay LVT on all their land holdings. With LVT any site with no registered owner would be sold by auction for the benefit of the Government.
LVT would provide automatic compensation for those sites which are disadvantaged by a new development. For example: with a new railway line most sites (especially those near stations) benefit from big increases in land values but some sites (maybe housing close to the track and suffering from its noise and vibration) would lose some value. These sites would pay a lower Land Value Tax, providing automatic compensation without any complicated appeals system.
What is needed is a land value tax which is much better and progressive than an income tax: