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Joe Otten — Mon, 23 Jan 2006 00:15:32 +0000

Not sure I appreciate the distinction between travel and transport. Nor do I see how LVT will have much impact on the demand for transport.

But you are right to scare-quote eco-tax". We are talking resource taxes, of which land tax is an obvious example.

My argument in http://joeotten.blogspot.com/2006/01/environment-environment-environment.html
does perhaps see fuel tax as more of a resource tax than a sin tax."

Why "Eco-tax" must include land

Jock — Thu, 19 Jan 2006 08:14:00 +0000

My personal Òhot-favouriteÓ for the Liberal Democrat leadership, Chris Huhne, has been advocating shifting taxes away from peoplesÕ incomes and onto environmentally damaging activities and resource use.

I've been mulling over the things Chris has been saying about eco-taxes, and in particular about fuel tax increases "hurting" people, and how, in part, he proposes to mitigate that hurt by reducing/abolishing income taxes on the lowest earners. And it struck me that the whole idea is incomplete without LVT (Wikipedia: Land Value Tax) as part of the package.

I'm not an anti-car person. But I believe, following some of what Michael Rowbotham says in "The Grip of Death: A Study of Modern Money, Debt Slavery and Destructive Economics", that there is a significant difference, in purpose and in outcome, between "transport" and "travel" and how both relate to economic circumstances.

Transport, loosely, is "needing" to get from A to B to fulfill some kind of economic imperative - getting to work, getting the kids to school quickly enough so you can get to work in time afterwards, getting goods to ever more distant markets (a function of the deficiency of effective demand in any one "economy"). Travel, loosely, is liberating, experience broadening. Most "traffic" on our roads, in our skies and so on, is "transport" and has a direct relationship to location values - particularly the inability often to be able to afford to live within a more sustainable transport mechanism's reach of one's employment.

(For different reasons...) Holiday air traffic is also transport, not travel, and is directly related also to economic circumstances - if you only have a week's holiday, you want to get to your destination and back as quickly as possible to maximise the time on the beach or whatever. We have lost the notion that the journey is as important as the arrival because economically we cannot take our time about time off work.

Now I'm sure Chris understands all this. And I'm sure he also realises that his remedy for higher fuel duties - of taking those most affected out of income tax - does not go far enough *as stated*. It does not address the *need* for transport traffic. Just makes it more expensive and compensates those who would be worst affected.

One common response to taxing people out of their cars is that "we must have the quality public transport in place" to enable people to switch. But LVT gives us a different, more sustainable solution - of reducing transport needs, not just changing the mode of transport. And, of course, provides a mechanism for sustainably recycling any investment in more environmentally friendly transport infrastructure than these cash revenue subsidies which serve only to line the pockets of the Brian Souters of this world.

The same goes for non-transport fuels. Especially domestic heating and energy. We have the oldest housing stock in the OECD. Our energy efficiency standards have been, for most of the 20th century, woefully inadequate and still aren't that brilliant today. In 1990 our insulation standards were still not as rigourous as Sweden had in 1929! And swapping a higher fuel bill for a few more inches of insulating material is not going to make much of a long term difference.

We need something that will actively encourage not just bit by bit improvements in response to fuel price change (which will happen anyway if Peak Oil has or is about to happen) but to redevelop whole tracts of our housing to things like the "40% House" standards. (Lib Dem member - and former GLD chair of course - Mark Hinnells is part of the team on this). Since such energy efficiency is capital intensive in the cost of the building, it won't work without LVT - under council tax it increases the market value of the whole property and costs more in tax. But with LVT you can effectively offset the additional capital cost which can take many years to recover in cheaper energy bills with lower land cost and an ongoing revenue commitment in the form of the tax liability).

So, the big question is, how do we get this message across that eco-taxes are incomplete without LVT.

Jock's Place - Why "Eco-tax" must include land - Comments

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Why "Eco-tax" must include land