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Re: FW: Thoughts on seminar

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  • Tony Vickers
    My thoughts entirely - and what I m advising the Lib Dems to go for. The LVT might also be subsumed within Income Tax and Corporation Tax systems, like the
    Message 1 of 1 , Feb 27 7:21 AM
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      My thoughts entirely - and what I'm advising the Lib Dems to go for. The LVT
      might also be subsumed within Income Tax and Corporation Tax systems, like
      the Swedish Property/Wealth tax is. The attraction is that, like income tax,
      it will not be so obvious to the payee and therefore won't attract such
      opposition.

      If the 'homestead' allowance was only attached to owner-occupier (or shared
      equity) homes, then the landlord (social or commercial) would have an
      incentive to become more of a property management company than a land owner.
      This would allow more people to share in the iniquities of landlordism! But
      if we started the allowance high enough to keep most home-owners as winners,
      we could freeze it so that it became a more genuine form of LVT. Also we
      needn't have a pure land-value base at first (if the data isn;t there) but
      could incentivise the supply of information about buildings etc, offering
      100% tax rebates for all declared valuations of 'non-land' assets.

      Tony Vickers
      ----- Original Message -----
      From: "Wetzel Dave" <Davewetzel@...>
      To: <John.Illingworth@...>
      Cc: "'Kevin Cahill ( LLC) (CLTs)'" <ros@...>; "'Land Café ( lc1)
      '" <LandCafe@yahoogroups.com>
      Sent: Monday, February 27, 2006 12:43 AM
      Subject: RE: FW: Thoughts on seminar


      Cheers John,

      Dave

      Dave Wetzel
      Vice-chair, Transport for London

      -----Original Message-----
      From: John.Illingworth@...
      [mailto:John.Illingworth@...]
      Sent: 27 February 2006 00:39
      To: Wetzel Dave
      Subject: Re: FW: Thoughts on seminar



      Solid points and cogently made. Part of the answer is (1) to make LVT
      progressive by including a "personal allowance" (like income tax) roughly
      equal to the land value of an average home, (2) release more green belt
      land for housing, and (3) extend the "right to buy" to the private rented
      sector, on similar terms to those that apply in the public housing sector.

      John Illingworth





      Wetzel Dave

      <Davewetzel@tfl.g To: "'Heather Wetzel (
      hw h1 hw1 )'" <heather.wetzel@...>, "'Toby Lloyd
      ov.uk> (GLA Hsg)'"
      <toby.lloyd@...>, "'Fred Harrison (The Land Research Trust)'"
      <metaman@...>

      27/02/2006 00:11 cc:

      Subject: FW: Thoughts on
      seminar






      nb
      Some serious thoughts from Kevin Cahill.


      Dave

      Dave Wetzel
      Vice-chair, Transport for London
      Windsor House, 42-50 Victoria Street.
      London. SW1H 0TL. UK.
      Tel 020 7126 4200
      Intl Tel: +44 207 126 4200

      Close to New Scotland Yard.
      Buses 11, 24, 148 & 211 pass the door. (507 passes close by).
      Nearest Underground - St James's Park tube station.
      A walk or short bus ride from from Victoria and Waterloo mainline stations.
      Public cycle parking available outside Windsor House.



      -----Original Message-----
      From: Globalnet mail uk [mailto:ros@...]
      Sent: 26 February 2006 01:52
      To: Wetzel Dave
      Cc: tonyvickers@...
      Subject: Thoughts on seminar



      Dave, Tony, Heather and everyone.



      First, thank you. I am very glad I came early and heard so many of the
      speakers, including Fred.



      I still stand by what I said, especially having heard Heather on
      Harrisburg.
      I think LVT can work. The "But" is the same one Fred highlighted.
      Homeowners. If you can sell it to them, you have it. But as currently
      presented, its not going to sell and its not going to work either, so you
      have two problems there.



      Here are my thoughts following the seminar.



      No one in freehold is going to understand the "rents we already pay to
      landowners". The connection is too remote to work. The immediate result
      will
      always be confusion because they are not conscious of paying the rent you
      refer to. Its indirect.

      Secondly, going to your tube line analogy, the 'landowners' who benefited
      from the tube extension were homeowners for the most part. Home owners are
      not 'landowners' in the sense that you use it here however. Politically
      they
      are 70% of the population and consequently, they are 70% of the electorate.
      And this is where the real problem occurs. That 70% are the democratic
      majority, at least in theory. If you talk about spreading benefits around,
      if you are not spreading the benefits to the majority of the community, ie
      homeowners, who are you spreading them to ? To the 30% without freehold at
      the moment ?



      Defining the 70%, as Heather asked. Here is the logic. There are 24.9
      million homes in the UK. 70% of those are in freehold possession by their
      occupants (17.43 million homes). In law, the home is often held in the name
      of just one parent, but divorce laws now mean that even if the spouse name
      is not on the deeds, he or she has a de jure half share. I usually speak of
      70% of the population having a stake in the freehold home, because in
      normal
      circumstances children have a de facto stake by occupancy and are usually
      the inheritors anyhow.



      Underlying the current approach is a complete confusion of 'landowner' with
      'homeowner' and LVT is un saleable on this basis because homeowners are not
      landowners and the 70% will very rapidly work out that when you speak of
      landowners and tax what you actually mean is them.



      There is another major problem. Between 8000 BC and about 1900 AD between
      95% and 99% of the human population owned nothing, not a bloody blade of
      grass, and certainly not a single brick, and were in a state of poverty
      comparable to India and Africa today. The only thing that changed that, and
      changed it in the Anglo Saxon world in particular, was not wages, but home
      ownership. We are prosperous because we have assets, not because we have
      better wages. The asset 70% of the population have is a stake in a home.
      The
      fact that 70% of the population have opted for home ownership is the
      majority in the community making a choice, a choice which has conferred
      dramatic benefits on about 70% of the UK population and 16% of the
      planetary
      population in a very short space of time on the historic scale. If the
      benefits conferred by homeowner ship are the economic fact that has
      transformed the lot of the majority in the USA, UK, Irl etc, then it seems
      to me logical to look at how we extend this transforming benefit to every
      one that wants it. That means that you don't start hampering homeownership,
      placing artificial constraints on it, and fiddling with it when you don't
      understand its true function. Logically what you do is extend the
      opportunity to own a home to the 30% not yet on the ladder in the UK. Not
      everyone wants it, so there will always be a rented sector, but the choice
      has to be there. And that means providing the opportunity for personal
      homeownership, not building more council or other rented accommodation, and
      placing allegedly socialist councils in the position of the landlords of
      old, which is what the prioritising of rented homes does.



      Now, the other point is that homeownership also happens to be the only
      thing
      or factor that has ever worked to end poverty throughout all of human
      history, and I have been there recently, guided by Jack Powelson, right
      back
      to 8000 BC. The whole of history is a record of total landlessness for 95%
      to 99% of the human mass and of total poverty of that mass. But the human
      mass is us and 70% of the mass in the UK are homeowners and are out of
      poverty and into prosperity.



      Homeownership in the west was not planned. It happened largely by accident.
      And it was instinctively opposed by the landowners because it deprived them
      of rent. But because they got a capital gain, they compromised, and anyhow,
      very little land was involved. The left never understood what Maggie
      Thatcher was doing when she ended mortgage tax relief. She was trying to
      restore the landlords of old, and stop humanities relentless march towards
      the possession of land via a home ,by limiting the advantages of home
      ownership and making it difficult. And she succeeded, see below.



      And I have to say this. The whole argument about a housing crisis and young
      people not being able to get on the ladder was utterly fatuous. You build
      houses on land. To solve high prices you put more land on the market. And
      you give young people and everyone else the tax relief that the thriving
      housing markets elsewhere have.Toby put up a figure of house building
      requirements for the UK of 145,000 home a year. I have never seen a figure
      that meant so little in my whole life. Its not from Barker, its not from
      Whitehead. Where is it from ? But that aside, let me repeat something.



      One of the key economic facts in each months economic statistics in the US
      is housing starts. In the UK housing starts do not figure in the stats, at
      all. Why ? The US built 2,230,000 homes last year for a population of 295
      million people. We built 165,000 homes for 60 million people. The Irish
      built 80,000 homes for 4 million people last year. What marks the US and
      Ireland is that homebuyers get mortgage tax relief. Here is what the US
      figure implies we should be building. (divide by 4.1 approx ) 543,000. The
      Irish figure (multiply by 15) implies we should be building 1.2 million
      houses. The Irish may be over building, and possibly even the Americans,
      but
      the scale of the discrepancy shouts out that in an alleged home owning
      democracy the 145,000 figure is ludicrous. The young cant get on the
      ladder
      because we are not building enough homes, and because we are not building
      enough homes prices go up. You don't have to be Einstein to figure out how
      to solve the problem and its not by fiddling on the fringe, with low cost
      housing, that is for sure. What is happening is that the Labour Government
      has followed Thatcher into trying to recreate the rented sector, and
      landlords, it does not matter a whit whether they are social or private
      landlords. Every landlord is a barrier to another person owning their own
      home. And a step backwards into a poverty ridden history. If social
      landlordism worked, the Soviet Union would at least have worked
      economically. It didn't.



      So, what is LVT going to do for the 70% of UK households who will be paying
      it ? And what is it going to do for business, already paying £13bn in UBR ?
      If LVT is to work, it has to contribute towards the welfare of the
      majority,
      and that means improving the value of their sole assets, or at least making
      sure that it isn't damaged. I did a survey amongst mainly homeowners with
      un
      mortgaged homes locally. They would all accept a 25% cut in the value of
      their homes to see young people get a chance. But the whole point is that
      there is no need for a cut to occur, and to impose a cut would I hope start
      a revolution, because that would be the deserved response. Necessary pain
      can be borne. Unnecessary pain wont be. Cutting the value of existing homes
      would be economic incompetence of an extraordinary kind, because it is not
      necessary and in any case would end the life of any government that did it.
      Or else we would all be stupid. Politically, attacking the value of current
      homes is a non starter. You'd never really guess why the Government is
      holding the housing market at 145,000 and forcing underbuilding to occur ?
      Let me put it this way. Tough on the kids, but if the government is seen to
      damage the sole asset of the majority of 70% of the people, its not going
      to
      be around long, is it ? And what easier way to ensure asset value growth
      and
      stability but by limiting the number of houses built. Simple, really. The
      key question really is when you talk about spreading benefits to the
      community, who are you talking about. The 70% with homes, or the 30%
      without. The Government certainly seem to believe in the status quo, even
      to
      the extent of being afraid to touch it and restore the building industry



      Kevin



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