Apart from the funding of public services, a great deal of taxation is related to the funding of benefits that come under the heading of welfare, designed basically to help those on low incomes, or in economic distress for whatever reason. Table 5 below shows 14 different forms of current benefits (including the state pension). Some of these are aimed at the actual alleviation of poverty. Others are allowances available to all income groups. Continue reading
Author Archives: Ian Hopton
The main purpose of this website is to communicate the ideas of LVT to those with no special knowledge of economics, and therefore I have used terms and meanings as they are generally understood in common usage. However there are in certain cases definitions used by economists that differ, and need to be explained. The items covered are:
- Wealth, 2. Land, 3. Property / Real Estate, 4. Earnings, 5. Wages, 6. Money, 7. Capital, 8. Economic Rent, 9. Rentier
In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago’ Milton Friedman (1912-2006): American economist and Nobel laureate.
‘The economic case for a Land Value Tax is simple and almost undeniable. Why then do we not have one already? Why hasn’t it been adopted widely in the western world? Even more puzzling is that, right now, as western economies struggle with the global financial crisis, why isn’t this form of taxation being seriously considered as an alternative?’ Sir James Mirlees (1936-2018): Nobel economics Laureate. Continue reading
A BRIEF EXPLANATION OF BASIC PRINCIPLES
I suggest that there are four basic principles or characteristics of LVT that may be expressed under the headings:
- Community created value.
- Taxation according to means.
- A direct tax.
- Simplicity and clarity.
This is the principle of returning to the community, by means of a tax or levy, the value that the community itself has created. This value is measured through land values, which are simply an indication of collective prosperity. Continue reading
Taxation according to means is an essential characteristic of any fair tax system. Where this happens the tax is described as ‘progressive’. With LVT the tax burden is imposed according to relative prosperity as measured by land values. Continue reading
LVT has the advantage of being a direct tax. One of the arguments against indirect taxes is that they are indiscriminate––they are paid equally by the rich and poor alike and are therefore unfair. However they are popular with governments, as they allow the people to believe that they are not really being taxed, they are simply paying higher prices. Continue reading
An important characteristic of LVT, which many other taxes do not enjoy, is its openness, clarity and predictability, which makes it a tax that would be difficult to avoid. Continue reading
1. Diagrammatic explanation of LVT.
2. Application of LVT.
3. Advantages of LVT.
4. Early history.
5. 20th Century history.
A good way of explaining LVT is through a series of diagrams showing how land values arise from the first settlement of virgin territory through its evolution to a large community, and the best example of this is the settlement and development of North America. Continue reading