The definition of “fairer”
Monday 20 January 2014
SCOTTISH GOVERNMENT
Enterprise and Environment
Tavish Scott (Shetland Islands) (Scottish Liberal Democrats): To ask the Scottish Government what the definition of “fairer” is in the Minister for Environment and Climate Change’s comment to BBC Scotland that “There should be a fairer distribution of land, communities should have access to land to fulfil their aspirations.” (S4W-19122)
Paul Wheelhouse:
The Scottish Government recognises that the current distribution of land is highly concentrated, given that reportedly just 432 landowners own 50% of the privately owned land in Scotland and that this concentration of ownership may lead to constraints upon fair access to land to enable communities and individuals to achieve their full potential.
The Scottish Government cannot pre-empt the outcome of the final report from the independent Land Reform Review Group, or the outcome of the ministerial-led review of Agricultural Holdings Legislation which are both due to report back later this year. However, our vision is for a fairer, or wider and more equitable, distribution of land in Scotland where communities and individuals have access to land and, where such is lacking, that there is the necessary diversity of tenure. The Scottish Government believe that Scotland needs to ensure communities are empowered to consider how land in their community is used, and that the system allows communities to fulfil their aspirations. This government also believes that land should be available to provide opportunities for new entrants to farming and forestry. Scotland is on a journey to delivering land reform and to enable improvements to engaging with communities on optimising land use. This government believes that the nation’s land should be used to benefit the people and environment of Scotland to deliver sustainable economic growth with due regard for impacts on the environment and upon the health and wellbeing of communities across Scotland.
To fulfil Scotland’s potential, this government believes we need to build a society with greater diversity of land ownership, where communities have access to land to fulfil their aspirations and needs and to support business and employment in rural areas, including in traditional rural sectors, and for provision of community infrastructure, such as housing and green space. This includes community land buy-outs to achieve greater distribution of land to communities, sustainable development and realise increased economic vitality and employment. There are currently just under 500,000 acres of land under community ownership and the Scottish Government is committed to a target of achieving 1 million acres of land in community ownership by 2020. The Community Empowerment Bill will streamline and extend the existing community right to buy contributing to this target to ensure communities have access to land needed for housing, environmental and employment opportunities and the Scottish Government, as one of Scotland’s largest landowners, is active in exploring opportunities for creation of new community ownership projects through appropriate transfers of ownership from the Scottish Government estate.
Should be interesting.
Tavish scott being a lawyer will seek to perpetuate the status quo which is a rich seam of dripping gravy for his profession, and simultaneously ruinous for those tenant farmers who struggle within the archaic structure.
Where does wheelhouse stand?
The RAASAY shootings fiasco does not instill confidence.
Couldn’t Wheelhouse have said it in a 100 instead of 418 words? Or does he need so many words because he doesn’t really know what he is talking about? He certainly didn’t answer Tavish Scott’s question.
Actually, he did. In four words in the seventh line – “wider and more equitable”. The other 414 words were superfluous guff.
“More equitable” is a crossword definition. That leaves us with “wider” and 417 words of superfluous guff.
“greater diversity of land ownership” that’s the bit i like. Reiner you ask if PW knows what he is talking about, well let me tell you he definitely knows what questions to ask. Remember he isn’t responsible for the mess we are in, but i think he might be able to fix it!
Land has absolutely no capital value whatsoever as neither a deity or the Big Bang had any production costs and no invoices were issued to Adam and Eve or the first Neanderthals/ Homo sapiens to occupy the land after the Ice Age. The only value it has is its societally created desirability factor which is not created by the owner-occupier but by society as a whole. This societally created value has been articulated in different terms eg., site value, location value or land rental value and this is completely separate from any labour, buildings, crops, infrastructure or any man-made improvements placed upon or carried out upon the land.
Sadly we currently base public revenue raising on various imposts or taxation of the latter and this amounts to little less than de facto State robbery of individual and corporate private labour. There is no fair level of this robbery and talk of 20% or 50% income tax level is only discussing the level of the ‘crime’ . It is State grand larceny plain and simple, but however it has an evil twin head on the other side of the coin; namely the grand larceny carried out by sectional private interests of the societally created Land Rental Value and the speculation carried out on this LRV by these sectional interests, a speculation process that is at the root of the current economic crisis.
The concentration of land in so few hands in Scotland is one of the best examples of the ‘crime’ and the negative impacts it can cause in stultification of economic diversity and social decline/deprivation. The beginning of fairness in our society, begins with embracing the simplicity of the enormity and the enormity of the simplicity of removing both the two grand larcenies, by switching public revenue raising from imposts( income tax, corporation tax, council tax, rates on buildings, sales tax) on labour and man-made infrastructure upon land to collecting, to a 100% collection of Land Rental Value, which since this is 100% created by society, would be 100% fair, unlike any % of tax levied on labour.
The collection of the full value of our land into the public purse means that whoever owns the land and at whatever concentration means that the full due is returned to the society that created it. It will also start the process of making more land avaiable to more people as concentrating land holdings becomes less tenable as a way of sitting on ones arse making money from doing nothing. This will be like hitting the land monopoly cabal with an artillery barage, before finishing it off with a ‘bayonet charge’ of specific land tenure legislation.
I wish there was a ‘like’ button Ron. Simply and effectively put!
the definition of ‘Fairer’ in the context of land ownership distribution, can be best defined when the question itself does not have to be asked. And the question will no longer be asked when the one way flow of rural young folk heading to the cities stops. We have far too much land under the control of too few, and a down trodden tenancy system is no longer an appealing way of life.
Great to see you are back blogging, Ron!
Whoever owns the land, it should not be politicians, whose record is of the poorest.
Thanks Charles, I was out of action for a wee while due to a major hacking problem. No proof of course, but as you know my 3rd way of looking at things is not popular with either purist socialists or conservatives!
National wealth depends on productive use of a nation’s assets – which are labour, capital and natural resources. Land is a crucial element of natural resource, which should be accessible to those who will make the most of it, within sustainable development principles set by the Scottish Government. If there is potential to make more of land than the current owner is willing to deliver, market adjustments are needed to increase the incentive to release it. The Scottish Government distorts the market by incentivising community development; but it might also provide disincentives for holding on to land by bringing in a basic land value tax. Such a tax would operate in much the same way as council tax on empty property – incentivising owners to make better use of their property or give way to others with a will to do that.
capital is only created by the action of labour on land.
Introduce an element of land value tax with the right to purchase based on the land valuation and owners able to appeal the valuation down or up.
That would allow people to buy land.
There is neither need nor justice in the government deciding what politically approved groups they should buy the land for, and what ones they won’t. That is not any definition of “fairer”.
Neil,
What do you mean by element; a proportion of some perceived value and if so what value would that be and how would you determinewhat proportion or % would be fair?
The value of something is not what it cost to create it but what people are willing to pay for it (think Edinburgh trams & the Mona Lisa).
This is why a land value tax, with an owner’s right to change the valuation in either direction and other people having a right to purchase at that valuation plus a premium would work and would be the ultimate in fairness.
the land cost nothing to create, that’s why it has no capital value. The only value it has is demand from society and thus that value should be collected at a 100% rate because it is 100% created by societal demand. The owner has got nothing to do with creating its basic value. We do not need any form of land value tax and even calling it this is spurious nomenclature. All we need to do is collect the Land Rental Value—all of it. We can then dispense with the state robbery of individual and corporate labour know as taxation of which there is no fair level.
Is there anything that has a value irrespective of “demand from society”? All human beings are members of it.
If you are going to nationalise all land without compensation this is somewhat unfair to anybody who bought some recently – for example who has bought a house, or indeed to the mortgage companies who are all going to go bust too.
The general problem is that when a government decides it has the right to grab anything it likes nobody has any incentive to invest in anything.
I really like this idea. I first heard it nearly 40 years ago in the old Department of the Environment. The concept was floated in order to reduce the staff in the Valuation Office. Instead of asking them to do a revaluation, the suggestion was that houseowners would be invited to pay tax on a self assessed capital value of their property. The incentive was that the government could purchase the freehold at any time for a 10% premium, and then charge a fairly assessed rent based on that value. As an idea, it never got very far. But the economists liked it. Now, does Scotland have any economist Ministers, I wonder (actually I know the answer to that one!)
Richard,
Only the LRV would be collected as the primary source of public revenue. There would be no taxation of labour or on the capital value of the bricks and mortar part of the duality of property. The sheer utter stupidity of increasing the rates on a building when an attic was converted to a bedroom would cease. On three side by side lots of equal area (with housing planning permission )and Land Rental Value, one with a £500,000 house on it, one with a £1,000,000 house and the remaining one with no house, all three would be due the same LRV rate. There would be no profit to a speculator buying the three plots and doing nothing with them in the knowledge that societal demand over time would increase the land value with no effort on the speculator’s behalf. On the other hand, simple hard work and entrepreneurial flair woulde be rewarded instead of being punished, as at present.
Ron, absolutely spot on,
Extending crofting tenure over all scotland would be a good start.
extending a new extensive democratic and participatory private tenure system with landowners per square mile rather than square miles per landowner would appeal more to me Hector.
I said as a start, ron then move on.
Tenants must have absolute security before anything else can be done.
I ‘d rather see the tenants have the security of outright ownership.
It’s curious that relatively few crofters seem to want the security of outright ownership and most seem to prefer to stick with security of leasehold tenure. Which suggests to me that prescriptions that seem logical and reasonable (dare one say “fair”) on paper from afar are not always necessarily what people on the ground are actually seeking.
Of course crofters preferred leasehold tenure – it facilitated the system whereby they freed up the capital they had gained from decrofted house plot sales to second home owners for use in sounder residential investments for their children in Inverness or the Central Belt. And at a rent of £10 per croft per annum, who would do anything different when they are able to sell a de-crofted house site for £65,000?
Ron, if right to buy is brought in before security of tenure, there will be mass evictions.
Thats why it has to happen the other way round.
If you have absolute security and a controlled rent,and freedom to profit from your own improvements. there is no need to buy, as the crofters demonstrate.
many reasons why crofters have not adopted high levels of buy outs. Which will not be apparent from observers afar! The sword of Damocles, yes rent levels are very low, why do you think that is? The system is protected, it is balanced, there are real options, to sum it up, the crofting system does not suffer from ‘landlordisim’
i agree with you to a point hector, but when you ask crofters what it is that keeps the rent in check and the profits not creamed off, they will tell you “the right to buy” without it the pressure comes on. Just look at 91 act farm tenants, completely open to abuse from the black art.
If crofting tenure is so favourable to the crofter, then should that not logically drive the rent up just as a traditional 91 Act tenancy commands a higher rent than a limited partnership? I suspect the real reason croft rents are so low is that, given the sums involved are so small (due to the nature of crofting – small holdings with no landlords’ fixed equipment), it’s not worth anybody’s while bothering about them anymore so rents fixed decades ago have withered by inflation. There are estates where the croft rents have never been altered since the 19th century.
croft rents are low because of the existence of the right to buy. nothing to do with size or capacity. i know of crofts which are much larger than some farms.
91 act commands higher rent than limited partnership??????? not sure what you are commenting on here for? but i suppose some people want to learn about Scotland so why not do it on here.
SS, are we talking about the same thing here?
Are you really saying that a croft’s rent has nothing to do with its size or capacity?
Of course there are crofts bigger than some farms but the reason the rent is smaller is that the croft comes with no landlord’s fixed equipment.
I know the question’s hypothetical but imagine you could have a choice between three identical holdings but one was offered on 15 year LP, one was offered on traditional 91 Act terms and one was offered on crofting terms with right to buy. Which one would you offer the highest rent for?
if there are mass evictions, then the owners would be forced to be responsible for the full LRV by themselves and face depreciation of buildings and improvements by themselves. With LRV the price of property would come down as the land speculative value would no longer accrue to the owner but go into the public purse. With no taxation on labour and improvements then ex crofting tenants would be better able to consider either paying the full commercial rent rate or becoming an outright owner. Why should crofters have a controlled below market value rent and every other tenant who is not a crofter have to pay the full going rate? This looks like self indulgence Hector.
Sorry Ron, you have lost me there.
A crofter already pays a full market rent for the piece of bogland he received a hundred odd years ago.
The buildings, drains and fences he has added at his own expense are his and therefore cannot be rented.
LVT is a good idea, but the 1911 LVT act is still waiting to be enacted.
Yes interesting that the House of Landlords stymied it Hector, wonder why that was?
If we switched entirely from rates to LVT in one go it would bankrupt most farmers and bring on a recession, so I would say a small amount of that revenue should be taken initially from LVT.
It’s the TAX word again, what value would you be taxing and what would be a fair level? Please remember that LRV is to REPLACE taxes on income, bricks and mortar property and other improvements.
It is to replace it but doing 100% at once is clearly destabilising. I’d start at about 4% of the money raised by community charge with it rising 2% a year thereafter. That would not be confiscatory which is what should be avoided. There are other problems such as that many listed buildings have a negative value compared to the value of their land so I do not think LVT could be applied to anywhere where planning permission has been refused. The most valuable land in the country, by many orders of magnitude, is not Highland hillsides but city centres.
The buildings and any labour or production taking place within them, are irrelevant to the land valuation in terms of Land Rental Value and I see you are still using the erroneous term TAX. The LRV will be levied under maximum permitted use under planning law and would be levied whether that use is taken up or not—so no reward for speculating on high value urban gap sites. I would accept a phasing in system with a sliding scale of reducing personal and corporate taxation on labour and production , but I think we could replace Council Tax very promptly. Once the process is committed to and initiated, I think we’d start to see a culture shift in our land tenure attitudes as it dawned on the land monopoly cabal that time has been called on the biggest scam in history, Yes I agree that Highland estates pro-rata would not yield as much as desired urban-suburban sites, but even a few tens of pounds per acre for a nondom owner of 8 Highland estates( there is such a situation) would cause a sharp intake of reasoning breath and a question: do I need this land or do I just want it? Nothing wrong with wanting it, but with LRV we would get some return from those nondoms just wanting it now and not paying income tax here. Some rich megalomaniacs would probably try to hang on, but many others will probably just put land on the market and we get the cabal to pay for their own demise.
Croft rents are low because the landlord has provided nothing except some bogland and so receives next to no rent. Simple and fair.
Many tenanted farms are the same, with the laird providing next to nothing, but they are being rented out of existence.
As to what would you offer for a 91 act tenancy, thats pie in the sky since they are none available.
Ditto LP tenancy
Agree 100% with your first two sentences, hector. As regards your last two, I did say it was hypothetical “imagine you could …”.
you are incorrectly assuming that all crofts with low rents are bogland with no owner input on fixed equipment. you are way off the mark here. Croft rents are unusually low because if the landlord gets too excited with a rent rise then the tenant crofter can buy. so rents stay low. Some crofts are made up of really good ground and still have incredibly low rents. ARTB=LOW RENT
I hear what you are saying and i agree, but the “good” land on a low rent you speak about would not have been good when the crofter received it. Its only from the crofters hard work and investment that the bog has been made to bloom.
yes you are right hector and if it was a farm then the factor would get the rent up, but it is a croft and the factors do not go near it.
I look forward to the answers and comments to this hypothetical question. Maybe they will define “fairer”.
Thanks. I didn’t realise it had been invented there too. I got it from Robert Heinlein’s book “Number of the Beast” where it is used in a parallel universe which is literally the best of all possible worlds (but thus a bit boring so the heroes leave).
?
Still don’t know what’s a “fairer” distribution of land.
a fairer distribution of land will address the problem of one man having the final say on what happens in a community rather than a mix of people making the decisions. Or to put it another way, when you look to the sky line North, South, East and West, for mile after mile, coming on to 60,000 acres and it is owned by ONE man. Surrounded by empty houses and a dwindling population. Then i would say that that is an unfair pattern of ownership compared to the possibility of it being owned and controlled by several people.
Who will the “several people” be?
the same people that the landed elite and their advisers are doing their best to make sure that legislation slips past them.
Can you be a bit more specific?
To R L
How about starting with those who occupy rented farms . Would that not be a good start .
Stop playing games, you know the score.
I have read “Animal Farm”.
Reiner, and i have read “the lowland clearances” and the “highland clearances” and plenty of other books descibing the evils of landlordism past and present.
yet you want to be the tenant of a landlord rather than own your own ground.
Ron, I want my own ground, as everyone does, but without security i will be evicted before i can buy. Comprende?
but he can evict you anyway before you get the security, especially if there is any sign of it in legal prospect. May as well go for the jugular ASAP. I am not without sympathy. As an assured tenant( purely by default of a poor landlord) I feel pity for those on 6 month short assured tenancies from a local estate, the factor of which was appointed to the LRRG by the SNP. Anger at both situations hardly covers my emotional response.
I see the definition of “Fairer” as to mean a distribution of land that gives the greatest benefit to the greatest amount of people.
It wasn’t “Fair” that landowners were the only folk who were allowed to vote in the 19th century. It isn’t “fair” that I pay business rates on my wee business when sporting estates have themselves exempt from business rates. It isn’t “fair” that only 432 own and have power over so much of Scotland
I also don’t think it’s very fair that Paul Wheelhouse used the words “reportedly just 432 landowners own 50% of the privately owned land in Scotland ” If he chooses to use the word “reportedly” then he must have no personal professional knowledge of our country’s ownership statistics. Is this not a bit of an own goal !
Anyway, I have good faith in the outcome of all 3 current reviews, namely the LRRG; Richard’s Ag Holdings review and the Scottish Affairs Committee investigations to bring about a fairer Scotland, and those who need to have what “fair” means defined to them will soon be enlightened.
The triumph of hope over experience comes to mind here. The SNP ignored its own Land Commission report( I was a member of that commission) and with it all its many years of committment to land reform. The appointees to the LRRG included representatives of the current land monopoly oligarchy. Jim Hunter’s resignation says volumes.
Do farmers not also have themselves exempt from business rates? A lot of people might also think it unfair that their businesses are unsubsidised when farmers’ businesses are subsidised at the expense of the taxpayer!
“I see the definition of ‘Fairer’ as to mean a distribution of land that gives the greatest benefit to the greatest amount of people.”
Yes. This is what we must demand from our governments, and how we must judge what they do.
Look at the issues with some of the northern sheep stock clubs (crofting communities) where it is now clearly evident that some have made themselves slightly more equal than others. It’s human nature, nobody really likes to remain equal.
With the UK cattle herd now smaller than in 1949, its time to return to laws which allowed farmers to increase production, namely the 1949 agricultural holdings act.
Cattle and sheep farming is a long term business, which cannot prosper without security of tenure, and the decline in tenant farmers is a mirror image of the decline in stock numbers. Urgent action is needed to secure the tenant to his land by ARTB, and production of livestock will rise again.
Hear Hear! Hector.
Is that a justification for farmers being exempted from business rates (like sporting estates) and being subsidised at the tax payer’s expense (unlike sporting estates)?
If the UK cattle herd is smaller than in 1949, is that not a reflection of lack of demand for UK beef? Why should laws be changed to increase production of something there’s no demand for?
(I’m not saying the above points are “right” or “wrong”. I’m devil’s advocating – as a townie and a consumer of agricultural products – to understand what’s going on upstream from what lands on my plate.)
Putting business rates on farmers merely increases the cost of food, which is not a policy objective.
Conversely business rates on sporting estates will tend to make more land available for farming, therefore meeting the policy objective on cheap food.
As for demand for beef, it is unsatisfied except by imports, and falling scottish production is not related to price, but to the availability of land on decent terms for aspiring beef farmers
There is no shortage of land for Scottish beef production, the limiting factors are the cost of feed concentrates, fertilisers and Irish imports.
Neil, farming is like any other business. You’ll find one diary farmer who makes a loss on 500 acres, and you’ll find another one who makes a profit. The one who is making a profit has usually adopted better methods, e.g. a more advanced grassland management system with lower input of concentrates. I know one farmer [he used to be a tenant farmer and bought his farm from the estate) who uses a rotation system developed in New Zealnd whereby his whole herd (400 cows) grazes each paddock on his farm only one day a month. He’s inceased his milk yield from 20 to 27 litres per day and feeds concentrates only from October to March, The farmers who are struggling are usually those who don’t change their production methods, or who don’t adapt to changed market conditions. Now you can ask, ist it “fair” that the one makes a profit, and the other doesn’t? Some may argue that it is “not fair” when the successful farmer buys the land of the not successful one. The one will have 1000 acres and the other none. But he who sold out will have a lot of cash in his bank account, and perhaps no more worries. One could, of course, split up the 1000 acres in 20 acre plots. Then you would have 50 small farmers who wouldn’t make a profit and a lot of worries. But it would be “fair”. Until one of them sassed out how to make a profit on 20 acres and bought out his neighbour’s land…
………and within 45 years they may have purchased 39 farms just like Strathdee Properties on Speyside with a reported net worth of £50m!!!
or they may form a cooperative and retain their individual holdings, paying a relatively small amount of LRV and retaining the full reward for their labour and enterprise—nae lairds required.
So for example, you’re saying that within a given geographical region a community owned estate of 20,000 acres will pay exactly the same LVT as a contiguous 20,000 acre sporting estate?
Is the only difference the fact that LVT charged to the community will be split between all of the shareholders whereas the owner of the estate will bear the charge personally?
I am not advocating land value tax, but the collection of societally created land rental value. I was not talking about a community owned estate, but a group of individual private landowners forming a working cooperative to achieve economies of scale from the commercial activities on their land, none of which would face income tax under LRV anyway. Right now sporting estates don’t pay sporting rates and nondom owners might not even be paying any income tax, so we as a society have nothing to lose. I would be very optimistic that any group of individual owners would be motivated to upgrade the site potential of their land to maximise the cash yield under maximum permitted use and in the process raise the potential for LRV to be ploughed back into the public purse.
That equates pretty much to step 1 of the land reform in the GDR 1945 to 1948 which led to a general decline in productivity. Step 2 was the forced collectivization, step 3 the setting up of LPGs (agricultural production units) that took in several villages at a time. Nobody gave a damn any more, everybody felt disenfrachised (apart from the LPG heads who were usually big shots in the Socialist Unity Party (SED) as well.
you are talking about state collectivism, I am talking about private business cooperatives formed figuratively, and sometimes literally, from private landowners per square mile as opposed to the indulgence of square miles per landowner that curses us at present.
Is there anything quite so authoritarian as capital? If one person owns everything, the rest don’t get much say – even in how their own lives should be run.
Reiner,Farming is not like any other business.
Any commercial business which owns land with tenants on it soon discovers that the best outcome is to sell it to the men best equipped to run it, ie the tenants.
Sadly, the estates which own much of scotland are feudal, the very opposite of commercial.
They are run in a way which chokes innovation and prosperity for everyone, resulting in the near desertification of scotland, save for incomers who have cash and dont understand the situation.
I note that your prosperous dairy farmer had purchased his dairy farm before he embarked on investing in it. That is the key. ARTB is the answer.
I think you may find the majority of commercial property outside farming is leased by a business tenant rather than owned. It seems to fit well with most efficient business models.
Nobody mentioned commercial property, it is irrelevant.
irrelevant. not comparing apples with apples
Rural Rascal
Da a a a a h .
I thought that they had stopped making land , but they are still building commercial property .
Please reply , as we are very interested in your response for once . !!!!!!!!
yes indeed, no more land can be made and none that was made was made by mankind. It’s only value is potential rental value created by societal demand. Collecting that LRV cannot possibly lead to less land occurring, but taxing work and bricks&mortar property will depress labour and production. We would not need to tax so heavily in order to provide subsidies and welfare if the reward for labour was returned fully to the individual or corporate entity creating it and instead we collected 100% of the LRV created 100% by society and returned it 100% to society as public revenue. This is 100% fair unlike any level of income tax. Currently this LRV is being scammed off by a virtual land monoply cabal who have long cottoned on to the fact that capital is created by the action of labour upon land—hence their brutal obsession with holding as much land as possible.
If cheap food were the primary objective we should probably subsidise supermarkets – end their business rates and give them 25p a kg subsidy on rice sold, or slightly higher on potatoes. I think this would cost a small fraction of what farmers get and make staples – rice or potatoes – almost free.
I am saying this not as a serious proposal but to show that special pleading for farmers, or anybody else, is usually not really the optimum way of achieving the advertised objective. Free markets work. The problem with the land market is that, because ownership is tax free, it is a safer, easier investment than anything else, encouraging monopolisation, pushing prices up and not encouraging investment in improvement and beneficial use.
yes and long may land be tax free, but the LRV collected from it—-ALL of it.
I will keep using the term – land value tax. I think pretending it isn’t a tax (as the BBC licence, levies on electricity bills and unrefusable fees from government departments are pretended not to be taxes) is euphemistic. Also if you are taking all the income from land you are nationalising it without compensation and a state that can do that can seize anything.
I don’t think you’ve really got a handle on this one. In essence it’s no different from hiring a hotel room or a parking lot ticket. You pay for exclusive use of a space for a specific amount of time. A person earning 40k per year does not pay twice as much as someone earning 20k. Unless you have found an invoice from God or the Big Bang since your last comment, then land still does not have any capital value. So what value you are saying you wish to tax?
The term Land Rental Value is an articulation of a societally created desirability factor for land. Society and the state are not one and the same thing and you seem to be conflating them. The state is only a mechanism that society uses to function. That function requires a source of revenue for public facilities and that revenue currently is derived from placing an arbitary impost on labour or bricks and mortar property. Not to put too fine a point,on it, the state is basically stealing labour from individuals and corporations for public revenue. There is no point in worrying about whether 19.9% tax is too little, 20.1% is too much and 20% is just right.—it’s still de facto theft and it discourages hard work and encourages evasion/avoidance, thus being self defeating. However the rental value of land is not created by the owners, but all of us as a society at a 100% level, so a 100% collection is 100% fair and is 100% unavoidable. LRV would not be collected from labour( no income tax, no council tax, no corporation tax) or buildings( no rates) or any other form of man-made improvement upon land. Are you now beginning to embrace the simplicity of the enormity and the enormity of the simplicity and hopefully you will not conflate simple with easy? The television licence does no go up with personsal income rises, nor does the rent for my house just because my landlord knows I have had a pay rise. The collection of LRV can only come from private land tenure as the state( on behalf of society) cannot tax itself any more than a landlord can charge himself rent for his own house. It is in effect a bulwark against totalitarianismn not an agent of it. What is it that causes you difficulty in defining the difference between rent and tax.
Ron, you are talking about the indulgence of square miles per landowner that curses us at present. 1 Square miles equals 640 acres. One or two square miles strike me as rather normal in today’s farming, and as not very much at all in hill farming.
It was largely a metaphor to highlight a point. 10 landowners per square mile would be on your reckoning 64 acres per farm. Quite a reasonable chunk of ground by Norwegian standards.
normal in today’s farming? your way off
A lot of people have invoices for their homes, including the land it is built on. These may not go back to the Big Bang but they paid a hell of a lot of good money for them and would probably resent Society manifesting itself in the form of state employed polis coming round and telling them Society owned the land all along.
Can’t think of anything I own which has an invoice from God, which leaves quite a lot for Society/State/Volk to grab.
Yes they have paid for the deed title to the land, but the site value was not created by them but by us as a society. It is that site value, the Land Rental Value, that is due as public revenue and not the hard work they have carried out in their jobs/ businesses or the increase in the value of the bricks and mortar they may have carried out( eg an attic conversion to bedrooms, that would have increased the rates under the old system will no longer be imposed. So I repeat no income tax, no rates, no council tax and oh and yes, no sitting one’s arse making money from holding land and doing nothing with it. So what would be your fair level of income tax then?
no need for an invoice from God for those items as they are all made by mankind and labour. production and delivery costs could all be accounted for at one time or another. Land cost nothing to make and was delivered free. What we call land capital value is a spurious chronological compression of potential rental value—it’s a farcical construct.
So are you or Society going to repay what people paid for their title deeds,? I assume not if there will be no taxes apart from LVT (or if rebranded LVR – no taxes at all). Is it their tough luck for not realising the laws were going to change. If so under what circumstances should we expect Society not to change the laws again – what security has anybody?
We would not be repaying them as we are not taking them away. Any such law changing the public revenue system from stealing private labour( tax) to collecting a publically created value would have to got through the national legislative body and be agreed by that parliament, just as increases in taxes etc have to be presented in a budget. Whose tough luck was it when the 10p tax rate was abolished or the 50p one?
Since most lairds never paid for “their ” land, imposing LRV wont be a problem.
They have acquired their possessions mostly by dubious means, and have impoverished the rural population by theft of improvements made by tenants, so LRV will return some of this ill gotten gain to the govt.
It must also be graduated, so the more you own, the more you pay per unit.
It’s not area of land that’s the issue Hector it’s the perceived quality and desire for it created by societal demand. A few acres of prime housing land in Bearsden or Morningside might easily yield as much LRV to the public purse as a great many acres on Barra or Mingulay. A classic example is the sale of a 3 bedroom flat in St Andrews overlooking the famous golf course, for 3.5 million, whereas a basically identical flat just quarter of a mile away might only attract a fraction of that. Likewise if the two flats were to be rented out then the difference in the rent would have been enormous as well and would not reflect the price of the rent of the building per se, but the underlying land. Any estate agent could calculate the land rental value in a few minutes. Rich people tend to own small or moderate amounts of high quality land of high LRV potential or large amounts of low LRV potential whilst poor people own or occupy very little or none of either. Herein lies the answer to the fairness question. The more and/or better land you own, the more you pay and the harder or cleverer you work ,the more you keep if we use LRV as the basis of public revenue instead of taxation. We pay for what we hold and take and don’t pay for what we do and make.
Ron, your hotel room analogy is nonsense because in that case you’re paying for the use of somebody else’s property. When you have to pay for the use of your OWN property, then that’s a TAX. To attempt to argue otherwise is just playing with semantics in a way which is actually demeaning to your arguments.
No its a very good analogy for the purposes I intended. The land was not created by the owner and the site value is created by everyone else in society. All that would be happening is a return to the society that created it for public expenditure on strategic services instead of the state expropriating wealth in a completely arbitary manner, created through an individual’s labour. Still waiting for a fair level of income tax to be suggested or what proportion of the value of a building upgrade ( eg attic conversion) the state should appoint to itself.
No, you said LRV/LVT is no different from hiring a hotel room or a parking space. If that is so, then how come you don’t pay the state (or “society”) for a hotel room or parking space but the owner of the hotel/car park?
I was merely pointing out that the room was hired out on the basis of the ‘going rate” for the provision of the facilities and the charge was levied independently of the annual income of the individual hirer. The LRV that would be levied for any given site would also be independent of individual income and would not increase if an individual got a pay rise, won the lottery, added two bedrooms from an attic conversion and then rented them out to tenants, or otherwise added an improvement within the building. If one of the tenants got a $70 milion film franchise from writing a book about a boy wizard that goes to wizard school, his rent would not increase and he or she could keep the $70 million free of state expropriation ( tax) Get writing Neil
So the answer is yes it will be seized without compensation in the name of God & a claim not to be taking the land ownership away.
An awful lot of blood has been spilled over the centuries on determining what is owned by God, but I have never heard him give an opinion. It still seems to me that anything else can be claimed in the name of God in that case.
Your floundering around now Neil The name of God need not be invoked as it’s merely a return to the society that created the LRV in the first place. There was no land rental value in a world without people. How much of an individual’s or corporate income being expropriated do you think would be fair?
There is a whole literature on LRV/LVT. Some of it is here http://www.andywightman.com/?page_id=1050 Currently most “economic rent” is captured privately and capitalised into the transfer price of a parcel of land. The implementation of LRV/LVT involves the collection of this economic rent on behalf of the society that created it (by the process of guaranteeing titles, providing military & police protection of landholdings, courts and civil administration to uphold & defend property rights etc.).
“There was no land rental value in a world without people”
In a world without people there is nothing at all of value in human terms. Your argument thus inexorably means the right of the state to grab absolutely anything any time it convinces itself, through God or popular vote or Volk mysticism that that is OK.
We know where that leads – to the complete abandonment of all human rights and also to a form of government which, as demonstrated in the GDR, is highly inefficient.
That isn’t really being disputed – all we are disagreeing is whether that is a bad thing, which must ultimately be a matter of opinion.
you are really up a gum tree with this one Neil. With LRV to replace the state theft of labour( tax) at whatever % the state dedides it can steal from you, we actually reduce state power and increase both social power and the freedom of the individual, but that is only one part of the current duality of fiscal grand larceny. The other side of the fiscal larceny coin has been succinctly articulated by Andy’s post just above your last one: the capture of economic rent created societally by private interests. The human right I am trying to protect here is a very basic one; the right to retain the benefits of ones labour free of state expropriation( tax) and secondly society’s/the public right to have a value it created returned to in full to fund public works and institutions. You seem to be in favour of the state removing arbitarily a % of individual/corporate labour( tax) and I for one am still waiting for what % you would consider fair and why?
If we assume for the purposes of discussion that tax is a normal feature of an organised society then we can probably focus better on land issues.
Slavery used to be ‘normal’ as did sending wee boys up chimneys to sweep them ( high incidence of testicular cancer in such boys) but we changed the perception of normality in these incidences. The collection of Land Rental Value to replace taxation as the primary source of public revenue is of fundamental, primary importance in the land issue as it will have a profound effect on land tenure and use without direct expensive and indeed totalitarian state expropriation of land. There are two main land issues; how it is owned and how it is used and funnily enough the primary determinant of how it is used is how it is owned. In Scotland we have one of the most intense system of private tenure of land in the world, hence the primary point of the blog. A relative handful of people own most of Scotland’s land, imbuing them with a lot of power over other peoples lives without a democratic remit. Further, they are accruing, through no effort of their own, a vast benefit in site value created entirely by the rest of society, which if returned to society would fund public infrastructure and services, the former in itself increasing land rental value in a positive feedback loop. Taxes unlike death are not inevitable. We made them and we can unmake them.
You are saying that anybody who has bought land, with money earned by their labour, should get 100% expropriated by the state.
All the rest is redefining words to hide, possibly from yourself, what you propose.
My answer to the question you are waiting for was posted here Feb 1 11:17
No up the gum tree even further Neil. I am saying very openly and with no hidden agenda that everyone is entitled to keep their earned money free of state expropriation( tax), but that 100% of the Land Rental Value, that is 100% created by society should returned in full as public revenue to the society that created it. The ultimate aim is zero income tax( etc) and 100% collection of LRV. Now you keep on avoiding telling us what level of state expropriation of earned income( tax) you think is fair—-why?
Anybody who has bought land has bought stolen property.
Most land has been expropriated by someone at some time, often more than once.
Just look at durris estate, bought on a 100 yr lease by john innes in 1794 for £30,000, yet he was evicted and ruined by the duke of gordon after 30 years, after spending £90,000 on improvements.
His entire wealth was expropriated by the duke of gordon who sold the stolen property on for £300,000 in the 1830,s.
THEFT plain and simple.
INNES died the same week his furniture was sold by warrant of the sherriff.
His widow and children made homeless, even though they built durris house.
John Innes was the father of Cosmo Innes from whom I took the title of my book, “The Poor Had No Lawyers”.
Where did that quote from innes come from?
Cosmo Innes, 1872. Lectures in Scotch Legal Antiquities, Edmonston & Douglas, Edinburgh. page 155
Before we go shedding too many tears for him, it’s important to understand about the Durris case that John Innes was a lawyer (“The Poor Didn’t Need A Lawyer Because He Was One Himself”) who knew fine well that taking a lease of an entailed estate (i.e. one that could not be sold) of 76 years plus a life was a calculated risk.
Innes’s brother in law (also a lawyer) first tried to buy the estate outright but they tested the waters legally in court and were told it wasn’t on so they concocted this scheme of a long lease instead. Before entering into this, they obtained the opinion of no less than the Solicitor General which warned them there was a risk the succeeding heir of entail may not be liable for improvements.
Innes took a calculated gamble and lost – “the most dangerous speculation” was how one of the House of Lords judges described it.
Let’s also remember all the tenants Innes would have evicted and stolen their improvements from while he was in possession of Durris and the commonties he stole as well.
a lease suggests a long term tenancy and he must have thought that he had a secure tenancy. No doubt the ‘noble’ duke used some possible abrogation of the lease agreement as a pretext for grabbing the estate back. If Mr Innes had purchased outright ownership that would not have occurred. The lesson is clear.
Yes Ron, ARTB !
Got it, one click amazon!!
It is available free at https://archive.org/details/lecturesonscotch00inne
So when ARTB is enacted and agricultural tenants buy their farms, will they be buying stolen property as well?
Then you are saying that black is white and purple at the same time.
To claim that something somebody has bought title deeds to with his own hard earned money should be grabbed from them and that at the same time you are opposed to grabbing something somebody has earned obviously cannot be true.
Neil, you are now in a hole, I suggest you stop digging.
ARTB In many cases it will just be the returning of stolen property to its creators or their descendents.
Where new tenants have taken the lease,by ARTB they will be reaquiring property probably lost elsewhere.
The point is that the landlords did not create the value of farmland, it was the tenants who created 75% of the value by improvements, sometimes more.
You are repeating yourself. However you are right that it is clearly impossible for us to have a semantically valid discussion.
The difference between rent and tax is not a semantic one.
It is when anyone tries to tell me that an annual sum of money I am obliged to pay the state based on the value of property I already own is not a “tax”!
I am obliged to pay my landlord for the house I live in. It is not a tax and he cannot increase my rent purely on the grounds of what I earn. You are wrong yet again Neil.
I agree Ron. When LRV is rolled out, will the state be my landlord?
No, you will remain the outright owner of the land. The state will not expropriate your earnings( at whatever level it decides) nor impose any tax on your buildings/improvements, but will collect, on behalf of society, the rental value it created on your land. Oh and that rental value will not increase of you do get a $70 million movie franchise from your writings.
So is ARTB going to be restricted to tenants who can prove they (or ancestors) had property stolen from them either in the same or a different farm?
I dont think so neil, it wil be across the board, one size fits all.
The case is made.
This leads back to the initial thread of the blog.
The Scottish Government has identified that there is an undesirable concentrated pattern of land ownership in Scotland and it’s looking at adopting a “fair” system.
There may be lots of people out there who think everything is just fine, but I would ask them to consider why Scotland is such an unhealthy nation. Why do we have such a high rates of alcoholism; depression; diabetes; strokes; obesity ? Could this be something to do with the way we live our lives, perhaps dis-empowerment?
I think we need to have a government that tackles fairness. I feel envy towards countries like Norway and Sweden who have tackled their problem areas, and now have the happiest and most contented people in Europe.
Lets get fair, and if the government suggest ARTB is a vehicle for getting fairer, let’s have it.
Yes, ofcourse there are people out there who have the drawbridge mentality, and because they are fine and dandy don’t see the need for ARTB and will actively speak out against it. Let me ask one question. If someone was to come into our country from space , and set up a model for land ownership that would be sustainable and fair….would they really set up a system such as we have now? …where 432 people own half of Scotland , most of them sitting back and creaming off rents from those who work the land. I think not. Land Reform now.
The reason why there are so many UFO sitings in Bonnybridge is that the aliens are trying to investigate why there is is life in the republic of Slobakia and Girochequia,
ARTB as a cure for diabetes! I’ve heard it all now!
Hebridean Farmer has actually raised a very important issue. Societies with great inequality are inevitably dysfunctional in various ways. That might well include a variety of health problems and, yes, diabetes. Bad diet and bad health may come along for the ride with poor opportunities. See this fascinating TED talk:
http://new.ted.com/talks/richard_wilkinson
Land is obviously a crucial element in the wealth and economic organisation of a society. Any government which claims to act in the best interests of its citizens must address overbearing inequalities in patterns of land ownership where they stand in the way of wider economic benefits.
*By equality of course I don’t mean perfect equality but rather “reasonable” limits on inequality.
Before the waxing lyrical about Norway and Sweden starts up again (which is such a feature of these blogs), perhaps Hebridean Farmer et.al. would read the following article from the Guardian: http://www.theguardian.com/world/2014/jan/27/scandinavian-miracle-brutal-truth-denmark-norway-sweden
Are they in a rush to be governed from London then? Any of them want the same status as Scotland because life is so good here? Any Danish billionaires buying up 20-50 thousand acre estates in Norway? How much land do you own in Norway or Iceland?
Thank you for that link Noel, absolutely fascinating.
Perhaps some need it spelt out to them that diabetes type 2, of which there is a virtual epidemic in Scotland, is very closely linked to obesity, and obesity is closely associated to depression. Some views on this blog astound me, but then isn’t that what the video link showed about inequality.
One of the most surprising findings is that greater equality often leads to better outcomes for the wealthiest as well as the poorest.
What would that look like in terms of land? If there is scope for increased participation in a broad spectrum of activities – forestry, tourism, agriculture, crofting, etc – the larger landowners might also discover some new economic opportunities and/or better services in a stronger rural economy even if they do have a little less land than before.
Fascinating that Japan came out so well in the equality stakes in the vid linked to by Noel. In Japan, average landholdings are so small that they’re planning to gather farmland from smallholders, consolidate it and lease it in larger chunks to companies to make their agriculture more efficient. Clearly, they don’t understand how that runs them a dire risk of increased obesity, alcoholism, depression, strokes and diabetes as a side effect of more competetive agriculture. Be careful what you wish for.
In “The Spirit Level”, Richard Wilkinson and Kate Pickett make a very powerful argument backed up by a significant amount of research and so, if you want to make a counter argument, you’ll have to work a lot harder than that.
I’m not making a counter argument. I’m just passing on an observation.
Did general macarthur not abolish the estates in japan after WW2?
Hence their extreme happiness.
So how come their government’s now wanting to gather up smallholdings, consolidate them and lease them in larger holdings to companies?
They have been got at by monsanto and SL and E.
The thought of happy farmers tilling their own soil fills them with fury.
so that the companies can monopolise Land Rental Values created by the rest of society
Research has shown that people subjected to traumatic events develop damaged dna, which means that their children will have poor health, and also their grandchildren.
The rural people of scotland were cleared off their land in a traumatic manner, onto emigrant ships or into the glasgow slums to work for starvation wages.
Small wonder that we have poor health over large sectors of our population.
Meanwhile the landed gentry have developed behavoural problems due to extreme wealth.
So as well as obesity, diabetes etc. ARTB (underpinned with tax breaks for farmers and subsidy to produce something there’s no demand for) is also a cure for damaged DNA and behavioural problems?
If you could just confirm it will also fix climate change and act as a shield against asteroids crashing catastrophically into the Earth, then I’m completely for ARTB – bring it on!
Many people would expect new economic opportunities to lead to improved incomes, health and happiness.
Asteroids bring new, free land from space so I’m all for them.
capitalisation of freely provided asteroids—I bet you landowners would have a go at that scam too!
Best way of improving outcomes for the Highlands and Islands would be substantially improved roads and Norwegian style tunnel connections to the islands. We could make Islay an 80 mile dual carriageway drive from Glasgow.
Unfortunately public works projects in Scotland cost 8 times what they do elsewhere and none of the %*&£) in Holyrood care to explain where the extra billions go.
Yes, this will cost public revenue and as you want it, this will have to come from state expropriation of labour ( income tax), for which you have cravenly refused to suggest a fair level. Such infrastructure projects result in large increases in location values ( LRV) which are, for those who cannot grasp the fact that the single conflated concept of ‘property’ actually comprises a duality of bricks & mortar and the land they stand on, are wrongly thought of as an increase in house prices. The value of the actual house is not affected one whit, but the rental value of the land is, and all of that has been created by societal activity and not the owners of the land. With LRV replacing taxation on labour and buildings the due to society will be repaid and the private owners will be free to take up the improved commercial potential provided by the societally funded infrastructure free of impost by the state.
Better we go and live on them than that they come to us 😉
Ceres has more water (ice) than the Earth so it is potentially habitable. That would be land that God had not made habitable for us though I’m sure some here would argue whether it was the investor who paid for terraforming or Society as a whole. I would say investor. In due course such moral definitions are going to matter.
There is both no capital value to land on Ceres, because it cost no human being any money to make and there is no Land Rental Value, because there are no humans desiring sole occupancy of the land. This applies whether you believe in God or not.
yes, with LRV replacing taxation,the human investor making the improvements will not be taxed for these, nor on the labour that they required.
Ron ,Will your version of land tax penalise the likes of the dukes of buccleuch, roxburgh etc so they will be forced to reduce their excessive landholdings.
I am not advocating any tax on land Hector, only the collection of rental value created by society as a whole and not the private owner. If we institute LRV to replace income tax as the primary source of public revenue( collected by the state on behalf of society–the two are not one and the same thing) then we are in a win win situation as the gentlemen you mention will either have to pay us in cash or give up holding so much land. We will force them to ask a very profound question: do I need this land or do I just want it? Nothing wrong with either of course, but if they want it, then they can pay the rest of us our due, whilst at the same time keep the profits from direct entrepreneurial activity entirely free of income tax—as will their workers.
let’s not forget that Danish guy who owns 8 Highland estates.( he actually does some very good things though)
NOEL DARLOW: earlier in the discussion we exchanged views on taxation and land issues and the reciprocal impacts. I have also pointed that land has and cannot have any capital value as it was not made by human agency, incurred no production costs and no invoices were issued to the first occupiers. What we call land capital value is a farcical construct based on a chronological compression of potential rental values created by societal demand, but the almost criminal farce does not end there. All sorts of other fiscal aspects are cunningly capitalised by the land monopoly cabal into a surmised capital value, instead of being assigned to the potential rental value owed to society. A very clear example was given by Prof. Paul Cheshire in his oral evidence to the Scottish Affairs Committee at Westminster, when he pointed out that inheritance tax relief in both Scotland and England resulted in a fourfold increase in land costs relative to the same quality of land in France. This is only one incidence and I thoroughly advise you and other commentators on this blog to google this evidence, but even this shows the intimate impact of a tax regime on land costs. The closed shop on land sales is another frightener.
If its a scam why don’t you get in on the ground floor by settling an asteroid yourself tomorrow.
It will only have LRV if another person settles it after me. Bring all your money with you because as the sole landowner on it, I ll charge you all your money for one night’s rent—such is the power of land monopoly
If its a scam why don’t you get in on the ground floor by settling a “freely available” asteroid yourself tomorrow.
I am going to put a telephone box on it and UKIP can have it for free to host their next Scottish conference.
And an umbrella stand for the LibDems, a shoebox for the Greens & head of a pin for you.
Well since I have suggested and redirected your attention to that figure perhaps you might apologise for that “craven refusal” remark which I’m sure you would not classify as a lie but part of your God given right to reinvent truth.
When I first proposed the Tunnel Project I did suggest that it could indeed be easily paid from out of a levy on increased land values (I made several varying proposals).
Of course most of the cost of building the houses is also government regulatory parasitism – most developers pay more for lawyers than bricks – but the supporters of state parasitism are all for that.
Dodging the issue again? I have repeatedly asked you to suggest a level of income tax( state expropriation of individual labour) that you would consider fair and why) and you have repeatedly avoided giving me an answer; so I ask you once again–what % of income tax would you suggest? So you proposed a levy on increased land values, so since land has no capital value as it was provided by non human agency free of charge, what is the nature of that value and what caused its increase?
Yesterday, I bought my wife a new Mercedes in Inverness. The saleswoman told me that she had recently bought a square foot of Highland land that included the title “Lady of…” as a birthday present for a friend of hers. I think that’s a great business. I just wondered, how would that fare under ARTB and LRV etc.?
You presumably don’t know there are hundreds of thousands of them. Don’t buy land my boy, they’re about to start making it (seasteding undercuts your position in the same way).
I’ll happily sell you a square foot of land complete with a ‘Nae Lairds Required’ certificate, Reiner, once we get the ARTB.
Ron Where do the tenants improvements sit in an LRV scenarion, where they have elevated the rental value by 1000%.?
Essentially in the same place as everyone else’s improvements. The advantage is that the cash benefits from these improvements( higher crop yields, higher quality and number of stock, bed and breakfast income etc) are returned to the tenant free of income tax and the laird cannot put up your rent simply because he knows you are making more money. There are no free lunches here Hector, if you improve, then it increases purely because of increased demand from society for that quality of land, but the results of that improvement are yours free of state impost. Buildings and house upgrades will not be rated for LRV—so build a mansion if you can!. Your off-croft work will also be tax free. If you can make £500 a time woolly garments from a finer wool yielding breed of sheep because the land is upgraded, you will not be charged any more LRV than the guy in the next croft with the same quality of land who can only make a £300 a time garment.( OK an exaggeration of woolly pully prices to make the point)
Enough to keep government solvent. However since government can be solvent on 10% of gdp rather than 50% and there are better taxes, including LVT, that rate might well be zero. The real issue is how much government parasitism do you want as a % – perhaps you might answer that. I note you still haven’t apologised for making that false claim – how unusual.
The claim that land has no value is ,of course, obviously wholly untrue as I have explained to you. It is, however, an untruth on which your entire “justification” for stealing anything that is tied down, depends.
I said that land had no capital value because it was not made by human agency and had no production costs and that this is distinct from what human agency has done upon the land, which does have a capital value and should not fall victim to any form of state impost. You have not in any way shown that land has a capital value. The only value land has is created by societal demand for the site and this is independent of the owners creation and it is this factor its Land Rental Value that should be collected for public revenue instead of state expropriation of labour ( tax) which you clearly prefer. I see you are still not willing to specify a % level of personal income tax.
I want the Government to get zero% income tax—is that too high for you?
BTW, I said in my post at 3.02pm on the 4th of February in directly reply to you that ultimate aim was zero% income tax and a100% collection of LRV ( there being no capital value to tax) I did not realise that you may have short term memory loss and my sympathies to you.
LRV really doesnt sound nearly vindictive enough against the landed gentry, very disappointing.
LRV is just the first step on the road to justice Hector. I can assure you that I wholeheatedly detest the present tenure system with a venom, I can hardly articulate.
Vindictiveness against the landed gentry, eh? Now we’re getting to the truth!
note that I said the system. Some of the individuals within it I actually quite like and some of them don’t agree with the present situation either.
I see that your claim that “not willing to specify a % level of personal income tax” is, while representing the level of intellectual integrity you bring to discussion, quite obviously a total and complete lie, as anybody can clearly see, since I gave a figure (0%) in the preceding comment.
As is the claim that land has no capital value – thus attempting to justify your right to steal it.
Since you make a point of demanding answers you will, of course, being to some extent sincere, have answered my question about how much state parasitism you want and made the overdue apology – oops, no it seems you didn’t.
Pray tell, from whence did land obtain this ‘capital value’? Who got the contract for the Tertiary Basalt or the Lewisian Gneiss and were the unit costs the same and oh what about the glacially deposited soils we farm on, was the Younger Dryas glaciation an inordinately high proportion of the preceding major glaciation? Have you calculated the costs of producing slope aspect and altitudinal lapse rate? Who paid the bills?
Please note the comments policy on this blog (under the About menu). Keep comments respectful.
point taken Andy, but I do wish Neil Craig would stop insinuating that I am a potential thief.
neil, There is nothing going to be stolen, there just is going to be a shift in taxation.
Every time i got to the pub for a pint i have about £1.50 stolen from me by HMRC.
Every time i fill my tractor with deisel i am fleeced by £24 per fill by hmrc.
Land rental value tax will shift the taxation onto the speculators who can most afford it.
This is why I am willing to have an LVT that takes a relatively small proportion of value but not the 100% confiscation suggested.
If, when you went to the pub there were a couple of burly police who taxed you the entire contents of your wallet (because society printed the money) you wouldn’t go.
no confiscation is in prospect only, eventually, the 100% collection of a 100% societally created value, the only one land has. This is 100% fair and since land cannot be hidden or transferred this is potentially 100% unavoidable. Since land is a non man-made entity in fixed supply, the collection of LRV cannot possibly lead to less land being produced. On the other all taxes on labour and production lead to less labour being carried out or production initiated, either by simply not starting, legal avoidance or illegal evasion. Now what % of whatever value you ascribe would you specify as being fair and why would a fraction of a % either side not be?
Where do land holdings such as Eigg, Gigha and Glencanisp sit in this equation? Will they be exempt from LVT? Will the charge be apportioned pro-rata between the community or those resident on the estate?
no taxation is in prospect, only the collection of rental value.
Ok, so the apportionment of rental value to be collected?
Whatever the legal entity is that owns the land, individual or corporate will be liable for the LRV. Government owned land will be exempt, but NGOs will not be.
and that will include any holding-company facade put up by nondoms. Famous charities will also not be exempted, though land held purely for conservation purposes might have a low LRV rate or even zero one.
Ok, so what would you expect the collection of rental value for Glencanisp and Drumrunie at 18,000 hectares to amount to?
Simply don’t know, We’d need a nationa professional assessment to be done like the one done in 1910, but was prevented in implemenation by the House of Landed Lords. I would estimate though that the total yield would be quite low, but what is it yielding public revenue now?
Will it be £5,000 pa, or perhaps £50,000 pa or even £500,000 pa? You must have given it some thought as part of the process?
So, the yield from 18,000 hectares (45,000 acres) will “be quite low” but the community will enjoy £0 charge in taxation – is that correct?
no, I have not given any specific thought to Glencanisp’s potential LRV yield. It’s hard enough getting the basic principles across—as you may have seen from this and earlier blogs.
If the area has a low LRV rating it’s because the site has a low economic potential and desirability factor compared to an industrial site in the Central Belt or a leafy suburb in Glasgow or Edinburgh. Right now it probably has a low Council Tax( partially includes land value) yield and tax yield. If LRV was fully in place the taxation of income for the community would be the same as anywhere else—-zero– and so a boost would be given to economic activity.
Problem with Glencanisp and Drumrunie is an annual income of minus 200.000 quid.
We know that as well as the fact that it was purchased with revenue from tax and donations from taxpayers – an interesting conundrum in the definition of fairness in this context! So who owns Scotland?!
what was it yielding from sporting rates and inheritance tax before and how much public subsidy in agricultural and forestry grants etc from public funds went to the previous owners?
Previous owner bankrolled the losses.
Who was it and was he any good at legal tax avoidance?
Its no wonder that sporting estates lose money, since they are generally owned and run by idiots with too much money and time on their hands.
If a farmer had a chance at them, he could make a profit, employ people, and improve the place.
Until superfluous use of land is heavily taxed, the farmer will never sniff it.
so, you’re saying it has low economic potential (possible with the transport network and geographical limitations affecting the holding) but if LRV of an unknown quantum was introduced a boost would be given to economic activity?
the boost comes from replacing taxes on labour and improvements upon land with LRV at the national level, thus encouraging new and existing economic activity.
see what I mean about getting the basic principles across? In a great many of my posts on this blog I have repeatedly pointed out that LRV was to REPLACE all main taxes/imposts on labour and thus would provide an economic stimulus by not punishing simple hard work, entrepreneurial flair or improvements to bricks and mortar property. Further, since it would provide a predictable, unavoidable source of public revenue ( even from nondoms) it would allow new public infrastructure projects that would further enhance private economic activity. This latest post from you was pretty near to the ‘damned fool question’ level. It does you no honour.
Aha, has the rascal been unmasked?
Ron keeps asking what the “fair” rate of income tax would be but that’s a non-point because the government doesn’t set the level of tax at X% because it thinks that’s “fair”. It sets tax at X% because that’s what it needs to cover its expenditure. Presumably if LVT (LRV) were introduced and all other taxes abolished, the same would apply and it would be Y% of total land rental one year but could be Z% the next year, the issue of whether Y or Z are “fair” being beside the point. And if Z is higher than Y, then that year I get to keep less of my income from writing my wizard books.
I agree that there is no fair level of income tax, it’s all just daylight robbery by any other name. LRV is determined by societal demand and it’s already at whatever it is per site without direct government intervention. The ‘unfairness’ aspect derives from its societally created rate going into private hands instead of being returned as public revenue. The political class being the kind of turds they are, would no doubt try to interfere with the assessment process instead of letting it be assessed by an independent assessor in a truly independent manner, but what we can say Neil is that the LRV rate you pay will not increase simply because you write a sequel that brings you in more income or if you are a plumber or joiner that puts in 3 nights and Sunday double time. As I said there are no free lunches in raising public revenue.
OK, supposing the independently assessed rental value of a property, disregarding the buildings and other improvements on it, is £1,500 a year. The amount of LVT(LRV) the owner has to pay each year once all other taxes have been abolished is £1,500. Is that right?
If it is, what happens when you aggregate the amount payable for every property in the country and that amount is either (a) more than the gov’t needs to meet its expenditure; or (b) less than that (bearing in mind there are no other taxes to meet a shortfall)?
Has anyone ever done the sums to see how 100% of the aggregate rental value of all property in the country might compare with typical annual government expenditure?
No full real assessment on a national scale has been done since 1910. This met the UK requirements in 1910, but things have obviously moved on. This assessment only took a year or so without the advantages of modern technology. Society is more complex now but our assessment technology is far more advanced. Such working examples( partial implementation) in other countries suggest feasibility on a larger scale. We don’t need to rush in. I should point out that the marine solum of the Scottish/ British continental shelf should be considered part of our’ land’. Also, if we wish, there is nothing to stop ‘duties’ on alcohol or tobacco etc being used to influence peoples behaviour/raising revenue as they are now, the main aim being to stop imposts on labour, bricks and mortar property, sales and production. If LRV exceeds current levels of public revenue then great as we can either invest it in a long term fund or actually use it to upgrade our crumbling transport infrastructure, which in turn will increase LRV further( eg it is estimated that the 3 billion invested in the Jubilee Line, increased nearby land values by 15 billion–none of which came back into the Treasury)
Ron, I’m not really concerned with the mechanics or feasibility of the valuation process – I don’t doubt it’s perfectly do-able with modern technology.
What I’m getting at is the more fundamental question of what happens when government expenditure is not the same as 100% of the unimproved rental value of the property in the country (and marine solum/continental shelf etc.) Bar a freak coincidence, that is almost certain to be the case.
In the case of the LVT(LRV) take exceeding gov’t expenditure, you seem to be saying that the gov’t just ramps up expenditure to soak up everything it receives. That will be politically controversial to put it mildly.
What happens if the LVT(LRV) take is *not* enough to meet gov’t expenditure?
Glad to see that you agree that the assessment process is do-able. We could go round in circles in will it or won’t it meet or exceed current revenue levels and exoenditure needs. We are in debt plus in a recession at present and government is concerned with outgoings not meeting income from tax receipts and other revenues sources—hence the cutbacks. Whatever the source of revenue, it will not relieve us from living within our national means. Personally, I feel that the second scenario is more likely; that there will be an excess, and for at least two reasons. We will gain public revenue through not losing inputs from tax evasion/avoidance and since economic activity will be stimulated we will reduce outputs in welfare payments. I don’t think this is something we should be worried about. First of all we have national debt and borrowing to bring down. We certainly have major infrastructure upgrades required and as I’ve said these could help economic activity and raise LRV values further. The Norwegians have already faced a massive surplus from oil revenues and have been very careful about how they have spent it within Norway to avoid rampant inflation and the currency becoming ‘too hard’. Hence their sovereign wealth fund and I would suggest this is another thing we could establish from any excess LRV revenue.
The govt has to deal frequently with revenue shortfalls, especially now.
Its nothing new.
I wonder whether Hector’s comment that “sporting estates lose money, since they are generally owned and run by idiots with too much money and time on their hands”, is also aimed at the Assynt Foundation? I don’t think the previous owners (Vestey) have too much time on their hands. In any case, the crofters of Strathan rather threw their lot in with them than opting to go with the Foundation. The Vesteys employed, incidentally, quite a few people who lost their jobs after the Foundation took over Glencanisp and Drumrunie. As to the Vesteys’ tax affairs, I haven’t got a clue, I don’t snoop into other peoples’ dealings with the Inland Revenue. If it is legal “avoidance” – don’t all businesses, self-employed persons, and farmers in particular, use write-offs etc. to minimise their tax liability?
Actually I have some sympathy with people who legally avoid taxation, as to me it’s just a form of state robbery of peoples work and endeavour. That’s the trouble with tax as a public revenue source, it’s avoidable and depressive of economic activity. With LRV there will be no avoidance as land cannot be hidden or transferred to an offshore account and it will not punish people for hard work and entrepreneurial flair.
Rural Rascal
I find it quite disingenuous of you for not replying to my comment on 3 Feb at 11.30 am or are you ducking the issue
Indeed. And has consistently refused to answer the corollary but more important question – how much of gdp should the state be spending? Currently it is close to 50% (though state regulatory controls destroy an amount of wealth probably higher than even our total current gdp). Me – I consider that to high.
a bit like you in note defining the composition of land capital value and from whence it is derived. Impossible to answer of course as land has no capital value.
The Gulf Stream allows, through a modification of climate, a soil-site potential on land in Scotland not realisable at similar latitudes in other countries; have you factored this in to your estimation of land capital value and which group of private individiuals or single human being, made the Gulf Stream and at what cost?
?
This does not appear to be an answer to my question.
On the other hand it does very successfully point out why value can be so much more successfully determined automatically by the free market than by state apparatchiks determined to liberate/confiscate/steal/nationalise without compensation/seize in the name of Society/grab in the name of the Volk and spend on “paying government employees and their friends, the nominal purpose of government programmes being secondary, at best”
my goodness, you do have a very verbose way of admitting that land has no capital value.
I’ve arrived late in this discussion and a lot of ground has been covered, but the problem with the the minister using the phrase “a fairer distribution of land” is that it implies the intention of approaching the matter by re-allocating the land. The sheer complexity of such a task would make it inconceivable as a way ahead, yet the Community Right-to-Buy is a half-hearted move in that direction – bureaucratically assisted or enforced redistribution. Where would it stop? Assuming we all have an equal birthright to what nature has provided (most people would consider that to be a “fair” starting point), the nation’s land would have to be physically distributed evenly between all of us – crazy.
We don’t need any of this, nor land nationalisation. As Ron Greer says, we simply need to collect the annual rental value of land and make that the prime source of government revenue rather than relying on corrosive taxes on work and enterprise. Even a modest homeowner is a land monopolist on a tiny scale, and if we all reimburse the rest of society in accordance with the extent to which we have chosen to enjoy a monopoly of the common resource, we can achieve fairness. Land reform and fiscal reform need to be looked at together.
That sounds great in theory John but the answers I’ve got from Ron to the questions I’ve posed with a view to putting some practical flesh on these theoretical bones are:-
1. Nobody’s done the sums to know how 100% of current aggregate LRV might compare with current typical government expenditure.
2. If 100% of LRV is more than gov’t expenditure, then the gov’t will keep the excess and find something to spend it on.
3. If it’s less than gov’t expenditure, then – er, don’t know.
It’s not exactly a plan to go to the electorate with, is it?
As Hector has pointed out the present system results in th government facing a deficit and a in system which is depressive of labour and economic actvity, leading to welfare outputs and borrowing—you have ignored that one.
What is wrong in having a suplus to pay off the massive debt we have accrued under the current system and having plenty spare to deal with our appalling road infrastructure, NHS. schools etc and reducing further borrowing? Is there a shortage of things we need to upgrade in this country?
Yes, we need to have a full assessment, but we are asking political system and bureaucratic structure, mired in land monopoly to fund it, aren’t we? As I have said the previous evaluation in 1910 was sufficient for the House of Commons to pass legislation on it to actually bring it in, but it was stymied by the ‘House of Land Monopoly Lords’ and indeed this led to the HOC enacting legislation to restrict the power of the HOL.
Further, partial implementation is already up and running in other countries and at one time it got Denmark back on its feet, before the Danish Tories did for it.
I see you have also ignored the Norwegian fiscal surplus and their sovereign wealth fund—why? Oil or LRV the principle is the same.
Neil – no official figures and the most recent independent ones are in the 1989 book “Costing the Earth” (ed. Ronald Banks, pub. Shepheard-Walwyn) which, based on 1985 figures, calculated that it would produce 44% of central and local government tax revenue, exceeding what was paid in income tax. Those were cautious figures and were considered under-estimates by others who scrutinised them, and as Ron Greer says, the current system produces so many distortions that it’s difficult to say just how much tax revenue we waste.
But for the sake of argument, even if we could just scrap income tax and still have to put up with some of the others, I’d be happy selling that to the electorate!
The government spends about 50% of the money in Scotland (over 40% in the UK) so 44% of that would be 22% of our income currently going not on rent but on the proportion of rent that is the value of the land rather than the buildings. That strikes me as higher than likely. In any case it still leaves at least 56% of state spending to be raised by other taxes. There are other taxes I have no problem with – cigarette/alcohol duties discourage things which it is wise to discourage, National Insurance is supposed to be an insurance scheme & there is something to be said for taxing resources like oil. But lets not pretend this will mean an end of other taxes – unless we cut the size of government parasitism drasticly, which I think would be a much better target to aim at.
Neil – when you say cutting government parasitism would be a better target, do you mean “better” because it would achieve more than the 44% figure I quoted and enable income tax to be scrapped?
Why not do both – cut the parasitism and introduce the collection of LVR?
yes the key impost to get rid of is income tax, as the depressive killer.
Neil, since no one has done any work on this, how van anyone know the numbers you seek?
The principle is correct, and that is what matters.
The liberals surveyed the rental value ofthe whole of the uk in 1907, but the house of lords defeated the bill 4 times leading to the parliament act of 1911.
But the advent of ww 1 prevented implementation and it never was brought in.
Now 100 years later would be a fitting time to revisit it.
The 1907 numbers may still be relevant when adjusted for inflation.
well said Hector and our posts have crossed in the ether as it were. He has already accepted that the assessment process is do-able—-so lets argue with the politicos to get it done. The present financial/fiscal system has already collapsed—that’s why were are in national fiscal shitsville right now.
This debate gets ever more absurd. I think I am right in saying that parliament passed five laws in 1911. There was no welfare state. Infrastrucure maintained by government was minimal. Nobody even dreamed of a NHS. Presently, government issues one law or legislative instrument every 3 to 4 hours. If some participants want to re-visit methods of 1911 to raise revenue they might as well go back to see what the senate did in ancient Rome. The one has as much to do with “fairness” as the other.
The absurdity Reiner would be ignoring the lessons of the past and not taking them into account when progressing to something better.( Scots Law is still largely based on Roman Law btw) Society has moved forward since 1907-11 and demands are higher, but LRV has also increased, eg, the £15 billion added to land values after a £3 billion public infrastructure project called the Jubilee Line The land values in Soho are a long way ahead from what they were when it was a swamp.
And houses cost 1/4, compared to the RPI, what they do now; and it was possible to maintain the Somerset Levels; and do without policing smoking bans; all the political correctness bureaucracy; and incidentally run 1/4 of the world on the budget available then. And it was an era of unprecedented technological breakthroughs unrestrained by state busybodying.
Who would want any of that?
is that the houses you are talking about or the land they stand on?
you are bringing irrelevancies to this now, though I share your distaste of bureaucratic inanities. Just think of the time, effort and money we could save trying to chase tax evasion, avoidance and the rip off by nondoms.
I mean that if we want an efficient economy cutting the amount of it government spends from the current 40-50% to 10-20% would do so much more effectively than collecting the same amount of tax in a more efficient way.
I do agree that what I will insist on calling LVT is a more efficient and in many ways fairer tax and that we should move towards it. My only objection is that it would be deeply unfair and damaging to do so instantly, putting all of society’s taxes suddenly on one unprepared group. And I don’t believe that any one such simple answer is going to solve all problems.
Whatever method we use to raise public revenue, wasting it through administrative incompetence( or worse) is an utter shame. You keep calling it a ‘tax’ but you do not define what you are taxing. I have used the definition of a site value for land, which is created independently of the individual or corporate owner, purely through societal demand for a fixed supply entity not made by human agency. I have called this LRV and its collection will fall on all owners/ legally responsible occupiers and not just on a single section of society as you imply. Further, in the end, it will stop the burden of public revenue falling on labour and improvements made by human agency upon land. It will be unavoidable and unevadable. It need not be introduced ‘overnight’ but could be phased in using a sliding scale of reciprocal income tax etc reduction. I think you might find your ex UKIP colleague Mark Wadsworth’s Young Peoples Party website section on this of assistance. He has done a good deal of work on rebutting all the usual criticisms of LRV, though he still uses the erroneous LVT descriptor.
I quite agreee that it shoudn’t be introduced at 100% from the word go – a gradual transition over some years would be the way to do it.
Replying to John Digney’s comment on February 7, 2014 at 10:34 am (“Neil – no official figures …”)
John, thanks, that’s very interesting. If I’ve got you right, there was a study in the mid-80s which suggested that 100% LRV might generate about 44% of gov’t (local and central) revenue, yes? To take account of the intervening 30 years and other imponderables, let’s call that 50% in round terms for sake of discussion.
I think we can therefore all agree that worrying about what to do if 100% LRV exceeds gov’t expenditure is academic.
http://en.wikipedia.org/wiki/UK_taxation (and I accept that Wikipedia is not always reliable so am prepared to stand corrected) gives a useful pie chart of the percentage of gov’t income represented by the various taxes.
This suggests that, once you’ve taken out the existing property taxes (Rates, Council Tax and Stamp Duty = 11%), LRV could cover Income Tax and Corporation Tax (38%).
But we would still be left with having to pay National Insurance (19%) and VAT (15%) plus all the other ones like fuel duties, road tax etc.
Where does this leave Ron Greer’s claim that the big selling point of LVT(LRV) to Mr & Mrs Ordinary Homeowner is that it replaces ALL the taxes they’re currently paying?
did the 1985 study take into account the LRV potential from the marine solum of the continental shelf? Mr and Mrs Ordinary Homeowner will not be paying income tax, rates, stamp duty, or corporation tax( if they run a busines). You will see from my post of 5th Feb at 9.35 that I specifically mention duties ( eg alcohol, tobacco) as being a continued option for raising revenue. You keep forgetting or omitting the potential for the impetus that the elimination of the above taxes would bring to economic activity and the reduction of government expenditure on welfare outputs.
Ron, more to the point is you didn’t mention that Mr & Mrs OH will still be paying VAT and national Insurance!
We have at present, to levy VAT because of our membership of the EU. The game changes if we leave. The game also changes if Scotland votes YES as the vast majority of the of oil/gas rich marine solum of the continental shelf will be in Scottish remit. I am not phased in any particular way by the NI issue and as I keep saying if we increase economic activity by eliminating depressive taxation on we reduce the welfare output. Futher, as others above have pointed out, there is a link between poverty and ill health ( including obesity) and again if people are in work, retaining the full benefits of their labour they are less likely to be poor, thus reducing NHS costs
Neil – even taking your figures and mine on face value (incidentally, the 44% included NI contibutions) you can see what a seismic shift this system would produce given that, say, even a reduction in income tax of a few per cent would be currently seen as a radical step, and one that any Chancellor would give his right arm for. And I would endorse Ron’s point about the advantages of eliminating (or reducing if you like) taxes on production (his 9.26pm post). We can only guess at the extent to which this would reduce government expenditure, but we can be sure it would be pretty significant. You said earlier it isn’t exactly a plan to go to the electorate with – I actually think it’s a very good one.
indeed John, seismic is a good description of the likely positive impacts. We could, as I said earlier go round the will it or won’t it circuit until we get a proper modern assessment done and like you I think there is a good case for it. Our present system is in tatters and all the political class are offering is another boom and bust cycle based on the very thing that caused the problem in the first place.
John, I certainly wouldn’t argue that moving to 100% LVT(LRV) would be a seismic shift. But when something “seismic” is proposed, I think one has to have done a bit more groundwork than saying things like “We can only guess …”
We’ve been talking of going to the electorate. I can imagine the grilling you’d get from Paxman: “You’re proposing a seismic shift, John Digney, and you can only GUESS at the results? …”
I personally am still adjusting to the revelation that Ron’s been constantly telling us in these columns for months now that it’s a no-brainer that 100% LVT(LRV) will replace the need for all other taxes. But when you enquire more deeply, you find there’s a possibility 100% LVT might only meet about a half of current gov’t expenditure and we just have to hope its merits are such that the expenditure will come down to match the LVT tax take and so reach the goal of all other taxes being abolished. I have to adjust my thinking to it being a long haul with an uncertain outcome rather than Ron’s miracle instant cure.
Neil – have been out and just seen latest posts. I think scrapping of income tax would be a seismic shift and I reckon Paxman would too, so if you were also in the studio and disagreeing with that, I reckon it’s you who’d be getting the grilling from him!
It’s OK, John, we’re in total agreement that abolishing income tax would be a seismic shift! I certainly wouldn’t be disagreeing with Paxman on that!
“its collection will fall on all owners/ legally responsible occupiers and not just on a single section of society”
Landowners ARE a section of society.
Mark Wadsworth has indeed made the case for LVT with great accuracy and I agree with him (he has listed myself as his chosen “minister for forward planning” in his fantasy cabinet). As you point out he does not need to hide behind the conceit that LVT isn’t a tax.
Everyone lives on a piece of land and all legally responsible occupiers, including tenants will be responsible for paying their share of LRV, but in so doing they will not be paying any kind of tax. Mark Wadsworth is incorrect in calling it a tax and you keep refusing to inform us what value land has that you are taxing and how land has in your mind attained a capital value.
“tenants will be responsible for paying their share of LRV”
What? I thought the whole point of LVT(LRV) was that it had to be paid by the owner?
No, as I’ve said, there are no free lunches with this one. As a tenant, I pay my rent to my landlord for the provision of the facilities of the building and I pay council tax to the local government body separately . The CT does to some extent embody partly,he site value, otherwise their would be no need for the infamous 2nd gear banding. I used to live in a house where I paid both the CT and rent for bricks & mortar to my landlord, who then paid the CT part to the local government body. The fact is that I am ‘enjoying’ as a tenant the full benefits of a location value and infrastructure/services not created by me as an individual, but by society as a whole and my due has to be paid for that. If the house I am/was in had no tenant, then the landlord would have to bear the full cost of the LRV, plus lose ( under the replacement of taxation as the primary source of public revenue by LRV), a source of tax-free income. Hector will no doubt see the impetus this might give to the avaiability of tenancies!: or indeed to the availability of land for sale.
Ron, I totally get all that but I’m sure I once asked Andy Wightman whether it was the landlord (owner) or tenant (occupier) who would be liable for LVT(LRV) and I’m sure he was quite clear it was the landlord.
Does the tenant have to pay all the LVT(LRV) or just a proportion of it? If the latter, what proportion?
the landlord will indeed be ultimately responsible for the LRV, but he is entitled to expect any tenant to pay his due for his benefits of having sole tenacy of a site. The difference is that the landlord is then due to hand over the LRV proportion as public revenue, though he keeps the rent ,for the provision of his physical property to the tenant, free of income tax. In both my cases I was the sole occupier as the tenant and was due the full Council Tax. Multiple occupancy does create more administrative challenges, but we are already dealing with that under the CT system.
Ron is, in practice, proposing confiscating the land from the owners without compensation and justifying it by saying it isn’t really a tax or confiscation.
I see you are very determinded not to answer the basic questions, so I’ll ask you again: what value of land do you think would be taxed under the erroneous term LVT and when did land first aquire this value?( was it there during the Jurassic, Cretaceous and Quaternary periods?).
I have unequivocally stated that the title to land will remain with the private owner, as will the capital value of his /her buildings, crops, any other improvement made by the ourtright private own plus all benefits of labour( work) without state impost. All that would be collected is a location value not created by that owner, but by the society he/she lives in and benefits from. So when did land get this mysterious value you can’t or won’t define?
We obviously need a land agregation tax as well, to discourage too many acres in one persons ownership.
no we don’t Hector, can’t agree with you this time. I used to think along these lines until I saw the potential for LRV.
How many acres in one person’s ownership would be too many, hector?
Hang on guys – isn’t this just where the whole discussion started?!
Indeed John, and it’s as facile an argument as is 19.9% income tax too little, 20.1% too much and 20% just right. The thing with LRV is that we are in a win win situation either way, because whoever holds the land in whatever amounts has to pay us as a society the due for it. This is not currently happening, especially in regard to billionaire nondoms taking advantage of what our society delivers to them. The challenge as I said before, to landowners will be; ‘do I need this land or do I just want it ?’ Some will say that I don’t really need that much and will put it out for rental or sell it off, creating increased availability to others( the core issue we are discussing), others may try to hold on to large or valuable acreages, but to do so they will be putting in large amounts to the public coffers that they are currently not doing.
1,000 acres lowland, 10,000 mountainside.
Why should there be such limits on farm sizes?
Farm size will not be limited, they can be as big as they like, but they will be taxed over a certain size.
Replying to Ron, February 9, 2014 at 12:26 pm (“the landlord will indeed …”), didn’t have a reply link under it.
I understand what you’re saying. I had thought it was part of the LVT(LRV) theory that landlords wouldn’t be allowed to pass on the liability to their tenants (strictly speaking, charge their tenants an extra sum to compensate them for their (the landlords’) liability).
How are you going to stiff the Duke of Buccleuch if he can just neutralise the hit by ramping up rents accordingly?
if he tries to say his land has a higher LRV then that’ll just go directly into the public purse and not his—-shoots himself in the foot. If he tries to up the rent for the physical provision of property beyond the market price he will drive away tenants and be liable for all the LRV himself—shoots himself in the foot again.
it’s really not very different from my CT examples My CT in the first instance was paid to my landlord and then he had to pay it to the local authority. In the other example it was a split payment by me.
To be absolutely clear about this, lets take the example of a house with a monthly rent of £250 (whereof £100 is the proportion attributable to the land and £150 is the prop. attrib. to the bricks and mortar) and the Council Tax is £120/month.
Under the present system, the tenant pays £370/month (rent plus CT) and the landlord nets £250 rent.
Under 100% LVT(LRV), the tenant would pay £250/month rent but no CT and the landlord would pay £100 LVT(LRV). So the landlord nets £150/month.
Is that right?
The CT already embodies an element of LRV, so your basic premise is incorrect. The landlord will not be paying any CT himself and the rent for the provision of his buildings and facilities goes to him tax free.
just lets you see how much LRV the landlord has been pocketing all these years instead of it going to us! If £150 is a fair rate for the building and its facilites then what’s the problem? The LRV at £100 per month would still remain even if there is no tenant and the landlord would lose another £150 per month, making a monthly loss of £250 with no tenant. Get tenant, sell to someone like Hector or upgrade the building( no increase in LRV for that and then charge more rent for the better facilities with no income tax due)
Just to be 100% clear, under the present system (with Council Tax), the landlord nets £250/month, whereas under 100% LVT(LRV) and no CT, the landlord would net £150/month.
Can you answer that “yes” or “no” please.
yes he is netting £150 per month for the use of his property by another using your figures for a ‘fair rent’ , and that is all he is due. Do you think he should get any more than that? The tenant will be paying the £100 LRV and the landlord and tenant will not be paying council tax or income tax. Anything unclear in all that?
the LRV at £100 per month would still remain even if there was no tenant and the landlord would lose another £150 per month, making a loss of £250 with no tenant. Is this correct and can you answer yes or no please?
Ron has, of course, repeatedly refused to answer the basic questions. I ask you to acknowledge that Ron, apologise for it & to do so.
His claim that I have not answered his question about the rate I would levy is, of course, while representing the level of accuracy his entire case depends on, wholly and completely untrue. I previously said 4%(1st Feb 11:17) & repeated it last time he made this false accusation & again I ask him to acknowledge this and apologise.
Ron’s claim that he wants title to remain with the owner it is just that they will be unable to use this for income or anything else is simply posturing. It proves he knows that the theft he would be honest enough to admit he wants if he were honest enough to admit it, is simply theft and is, in the Orwellian style, deliberately misusing the language to pretend theft is something other than theft. His refusal to call tax tax is of the same sort.
You have never said where the supposed capital value of land is derived from, nor who created it. Please repeat it verbatim incase I missed it. As I keep pointing out, the LRV is not created by the owners, but by society as a whole and is thus due back as public revenue. All labour, phyiscal upgrade of buildings, and dynamic entrepreneurial skill on the the other hand will be totally tax free. I await an apology for insinuating that I am a thief and a liar.
if you consider it theft, then why is 4% theft OK and 4.1% not OK?
Please tell us WHEN the supposed capital value of land was created. Has it been there all the time since the Earth came into being?
Ron unless you are wholly completely and totally dishonest your repeated claim that I had not given a figure must be true or you would have apologised for it.
As anybody can check, it is wholly completely and totally untrue, I had repeatedly given the 4% figure we have your repeated word I hadn’t, and once again, while having to accept it as the highest standard of honesty to which you ever aspire, I must ask you to apologise for the obvious lie.
You should also apologise for suggesting what I have said about you is not entirely factually proven.
If any other part of your argument is infinitely more trustworthy please say what and what supporting evidence you can produce. Your behaviour only tends to discredit any argument for LVT which is a great pity because it is a desirable system.
I do not dispute the 4% figure you quote, but you don’t say 4% of what particular value associated with the land, when the land accrued that value or who or what created that value. So can you now answer these questions.
If you use the figures in my example above (February 9, 2014 at 5:17 pm), is the answer to the particular value the 4% is applied to not £100 per month? – i.e. the proportion of the rent attributable to the unimproved value of the site rather than the bricks and mortar?
So long as the valuation is reasonably up to date, does it matter much when that value accrued (might in any event be difficult to point to a particular moment in time) or what created it?
I am talking in terms of a societally created value to land that was created by demand from that society for a fixed supply entity( land) not created by human agency. Because it was not created by human agency it cannot ever at any time in the past or now have had or have a capital value. It only has a that societally created value which I and others have termed Land Rental Value and I have consistently and clearly postulated that this, not being created by the individual owner /occupier should be returned to the society that created it as public revenue and not end up as the private revenue of the owner occupier. On the other hand that which has been created by human agency upon that land and the labour carried out on that land, does have a capital value and none of this should be expropriated by the state and ALL of it( eventually) should go as private revenue to the individual owner/occupier. Neil Craig seems to be inferring that land does have a capital value and I have repeatedly asked from what agency this is derived and when it came into being. I still await an answer.
We have been fallaciously been capitalising LRV for years into private hands( an inordinately small number of them in Scotland) and tolerating expropriation( income tax etc) of private labour and improvements as public revenue by the state. I wish both ‘grand larcenies’ to cease and concede that it cannot be done in one fell swoop, but on a recipriocating sliding scale, over time, leading to 100% of LRV being returned as public revenue and 100% of labour/improvements upon land being 100% retained as private capital. The retention of this LRV by society is not a tax, but expropriation of wages by the state is.
You did, of course, dispute that I had given the 4% figure. That was a total and deliberate lie. If you had a shred of honesty you will apologise for it.
Then give evidence that anything you have said since is infinitely more honest. Then that you have a right to ask any questions when you have repeatedly refused to answer them. Then that your “questions” have any meaning. Then that you sincerely want answers. Then that you would respond to answers, and honestly, in the way you have refused to so far.
Don’t pretend to ask questions Ron when (A) you do not answer those put to you (B) you have no intention of listening to them & (C) you will lie and lie and lie again, claiming to have been denied answers.
I hereby fully acknowledge that you quoted a figure of 4% of a value associated with land. Is that 4% of a capital value that cannot and never has existed( unless you can prove it by providing production costs and proof of the maker of the land) or 4% of a societally created value expressing demand for a fixed supply entity not created by human agency? Calling me a liar in public will not obviate the intellectual dilemma you are in.
Whether it’s a “capital value” or a “societally created value” doesn’t matter because we’re talking about the same thing. I say tom-AH-to, you say tom-AY-to.
There’s no need for intellectual dilemnas if we can agree we’re talking about the same thing. If you don’t me saying saying so Ron, I think it’s totally counter-productive for you to invent this alternative vocabulary for simple concepts. People don’t understand what you’re talking about and ends up just alienating them.
If you want to put a message across to people, why don’t you use vocabulary that the people will understand?
yes I use rental value as the term, some use location value, site value and we all mean the same thing—a value not created by the individual location owner but through demand from society for a fixed supply resource that has not been made by mankind. This is a societal or public value and not the possession of the landowner, though the land is, land that cost nothing to make/deliver and therefor has no capital value. On the other hand all man made objects on the land( the house is a clear example) and the labour that made them can be costed( capital value. These objects/improvements/labour are not the possession of the state and they should not have an impost from the state placed upon—we know that imposition by a three letter word for bad——TAX.
When we collect that site value/LRV/community ground RENT instead of TAX we collect public revenue from what we hold and take and not from what we do and make. This is the SIMPLICITY of the enormity and the enormity of the SIMPLICITY you seem to refuse to engage with.
a 100% publicly created value upon land ( LRV) will be returned 100% to the public instead of going into the hands of private landowners( who will retain private ownership of the land)
Privately created capital value( bricks& mortar,labour, farm animals. widgets made in widget factories) will be 100% retained by the creators of the private capital value and not face being taxed by the State.
is this too complicated?
No. But it becomes so when you start arguing with people over terminolgy when you’re talking about essentially the same thing. That seems a waste of effort, to me, which distracts from the underlying issues.
OK since we are not talking about taxing land capital value as land has no capital value and the term Land Value Tax is therefor entirely inaccurate, despite its long term use, what would you call it ‘site value rating’ ( people hate rates as much as tax), location rental value’, ‘community ground rent’ or something else ?
As a lay-person who has no expert knowledge of land ownership and land use in Scotland, I want to ask if there are any studies modelling how land reforms would actually work in the context of specific estates.
Although I am learning a lot about LRV and many other issues from this blog, I am not able to clearly visualise how land reform will alter and improve on the existing patterns of land ownership and land use in specific locations.
Would it be possible to investigate, for example, a specific named highland sporting estate, or a lowland farming estate describing their structures of ownership, annual income, tax benefits, no of employees, environmental impact etc etc and then compare this with a model of how these estates would be improved by a range of reforms of the kind advocated in this blog. Are universities and civil servants currently doing this kind of modelling ?Is anyone doing it?
If the argument about land reform could be conducted using practical examples of the benefits in real contexts, it might have a wider impact than the currently fascinating but abstract debate which effectively excludes the non-expert.
Alan, if you wish I could send you a pdf copy of a masters dissertation at the School of GeoScience, Edinburgh University, on renewable energy schemes in a community owned and on a non-community owned estate. My e-mail is rluyken@aol.com
Thank you. I’ll be in touch
Ron are there any circumstances under which you will discuss anything using the English language – rather than, Orwell style, trying to redefine, al the terms?
Presumably your answer is Yes, after redefining Yes to mean No.
Does land have capital value? If ‘yes’ can you tell us , in English, how much it cost to make any piece of land and who charged whom for it? If ‘no’ can you provide an term in English to describe its value?
It has capital value because there’s a market for it in which perfectly rational people are prepared to pay for it. Land cost nothing to make but the value of something often bears little resemblance to its cost of production (works of art for example).
your are confusing it’s desirability factor with its capital value–that’s the root of the problem and it’s a very common confusion. What we delude ourselves as being the capital value is nothing of the kind and is a chronological compression of LRV. The ‘cost’ of ‘making’an acre of land in Blackhill is the same as it is in Bearsden,( ie zero), but if you bought an acre in each you and built two identical houses for identical construction costs on each you could rent out the house in Bearsden for a greater amount ( any estate agent could tell you that) and the difference would be the rental value of the land—all of which is created by society and not the owner. This the LRV that should be collected as public revenue and the landlord should keep the rent for the actual building/facilities free of tax.
a work of art is purely the production of human labour and creativity and this has a capital value unlike land which was not produced by human action.
” If ‘no’ can you provide an term in English to describe its value?”
Yes I can and have, more than once.
You couldn’t deny that if you had any slightest trace of personal honesty (who must be default assumed to be lying) and I ask i you to apologise for lying.
can you point to any post that you have made where you specify what the capital value is and how it was derived?
Neil Craig, your comment breaches the terms of use of this site and has been deleted. All further comments are now set to be moderated. I am working in the French Alps at the moment and there will probably be a delay of several days before I can obtain access to the internet.