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14295Re: LVT to be debated in Parliament?

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  • derekrss
    Nov 12, 2012
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      --- In LandCafe@yahoogroups.com, John David Kromkowski <jdkromkowski@...> wrote:
      >
      > Derrekrss: "Now granted, it wasn't all roses. The absence of a citizen's
      > dividend (or universal base exemption) meant that poverty and inequality
      > was rampant. However as far as economic growth is concerned, land taxation
      > was a great success. And although it wasn't LVT in theory, it wasn't too
      > far off in practice because the tax was based on valuations from 1672,
      > which were unimproved by the standards of the 18th century, let alone the
      > 19th.
      >
      > So, agreed that there are zero modern examples. But there is a huge
      > historical example."
      >
      > JDK: Well, if in fact this is a "huge historical example", then land value
      > taxation is a huge historical failure. Because the theory is that rentier
      > behavior is THE CAUSE for poverty and inequality. So if there really was
      > LVT, then there shouldn't have been "rampant poverty and inequality". I'd
      > have to say that LVT as a funding source for imperialism - the taking of
      > land by force - is a peculiar juxtaposition.
      >
      > The idea that a CD is required to do anything for poverty and inequality is
      > really not sound. At most a CD reduces the amount of time required for
      > work to sustain and thus in theory would free up time for leisure and
      > education. But CD is not a necessary thing to do that. Progress
      > unencumbered from supporting a parasitic rentierist class would do that
      > too. Even work week hour laws will do that.
      >

      It depends on how high the LVT rate is and on what the revenue is used for. Assuming no CD or UIE, if the rate is set low and the revenue is used to pay large salaries to a few thousand politicians, civil servants and military officers, there is little difference in its effect from using rent to pay a few thousand landlords. If the revenue is set high and used to pay a low wage to an army of soldiers consisting of half the able-bodied population, there is little difference from LVT plus a CD, (except that it ties up half the A-B population in unproductive labour). The first option will encourage growth to some extent but won't do much to touch inequality. The second option will give near-equality but poverty will be widespread because of the lack of productive work being done.

      In the case of the 18th century United Kingdom, we can certainly point at the economic growth effects of the LVT-like land tax but the tax was never at a high enough level to change the income distribution much. Also no revaluation was done after the initial valuation of 1672. Moreover when UK government spending at the end of the Napoleonic wars approached a figure which could have justified a land tax level high enough to make a difference to inequality, the landowners in Parliament baulked at paying and so we got Peel's income tax when revaluation plus a higher land tax rate would have been the better solution to fix the revenue shortfall.
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