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Well, who'd have guessed it, the Liberal Democrats could now be in the position of being the only mainstream political party to go into the next election promising a lower tax burden and radical tax cutting measures for most. In today's speech Tory Shadow Chancellor George Osborne promises tax simplification: but refuses to promise tax cuts.

I wrote that a couple of days ago and and have been holding off writing more for 48 hours or so since I thought that with the Tax Commission meeting next Tuesday it would not be helpful, but today, says The Observer in "Lib Dems plan 2p cut in Income Tax" people are clearly briefing as if the Tax Commission report is done and dusted and only awaiting some formal endorsement from Conference so it seems open season.

There's not one mention in that article about the proposed Progressive Property Tax. So I assume that "the leadership" has decided either that it's best not mentioned or it's not going to appear in the final options. This was proposed as a first step towards shifting tax onto land values and off incomes. And I do hope we get to see the Tax Commission report before my membership renewal, because if there is no move in that direction it's so much easier not to renew than to have to write in and resign!

Here's what ALTER, of which I am secretary, says about the possibilities of a phasing in of Land Value Tax via a Progressive Property Tax:

In this article by a brand new member of ALTER, David Cooper points out that:-

&#8226; the richest 5% own 40% of real estate - &#163;1.2 trillion - but mainly pay <0.005% of it in council tax, but

&#8226; we make businesses pay 4% of the value of the property they occupy in rates and

&#8226; many poor wage-earning households pay >5% of their property value in CT

A 5% Progressive Property Tax (PPT) with &#163;0.5 million tax-free allowance per taxpayer (exceedingly generous!) could raise &#163;30 bn/yr -as much as 10% of income tax revenue plus all the income tax paid by people below National Minimum Wage.

How can that possibly be other than a massive vote-winner? We would not touch the middle-classes, who would gain on balance even taking into account the increase in Income Tax from Local Income Tax.

I can just see the campaign cry:

We would scrap Council Tax, replace it with a fairer local tax based on ability to pay - and by ensuring the wealthiest pay most of all we would also scrap Inheritance Tax, lift millions out of income tax and reduce the basic income tax rate for almost everyone.



When Party Conference passed the "Moving Ahead" mid-term manifesto in 1998 with the "Tax Shift" statement that has been quoted before here, the stated aim of the Shift was

taking millions of low earning income taxpayers out of paying income tax altogether.

If we merely set PPT at 1%, we will only be able to scrap IHT and have a pretty poor excuse for not taking those "millions of low earning taxpayers" out of income tax:

We thought it unfair to tax the richest 5% as much as the poorest 5% used to pay from their property wealth under Council Tax

And that, dear reader, is just the start. Once the precedent of taxing land values is established and becomes the main base for taxation - as Adam Smith, David Ricardo, Milton Friedman et al tell us they would prefer, there are all sorts of savings to be made. So instead of just being able to look at managed government expenditure, such as the health service running costs, in which efficiencies could make a few billion difference, we start to make an impact on the two fifths of government spending - approaching &#163;200bn now, that is just moving money around the country.

Why should the government move money around the country if what is known as "tax competition" does that for us by producing tax incentives for people and businesses to recolonise those areas that have become economically depressed with low land values and therefore low taxes? Think of Hull as the St Hellier of the north, rather than the H*ll-hole of the north...:)

Land Value Tax, replacing Income Taxes, Corporation Taxes, Capital Taxes, transaction taxes and nearly every other economically distortionary tax that does not itself achieve some stated behavioural aim such as taxing tobacco to stop lung cancer or fuel to stop us choking ourselves, is the best opportunity since 1909 when Lloyd-George first tried it. This was the measure in the Peoples' Budget that led to the Lords rejecting it and the eventual re-election of the government and emasculation of the powers of the lords in the Parliament Act of 1911. Ask yourself why. Why on earth would the vested interests of the landed and powerful give up most of their birthright to rule to avoid a tax? Because it's progressive, that's why.

Income tax funding government expenditures, especially on infrastructure and supply side measures really involves a massive shift of money from me and the millions like me, to those who happen to own land in the right place to reap the benefits of that particular infrastructure. Land Value Tax ushers in an economy in which the government can in fact spend new money (not debt) into existence on the "full faith and credit" of the people of these islands, and simply recoup as much of that expenditure as is necessary to avoid economic instability from those whose asset wealth gains as a result of that expenditure.

To me, there are no half measures here. Any tax policy that makes a step in that direction must be rooted in the philosophy that taxes that put people off working and earning are economically destructive and should eventually disappear. If we don't use the opportunity of the Tax Commission to do start this process, we will all lose.

Technorati Tags: land value tax, lib dems, localism, taxation

I got an email late today from an LVT supporter saying that Nick Clegg had spoken about the role of LVT/SVR in enabling more affordable housing in a BBC panel discussion after the Queen's Speech today.

I've not been able to find it via the BBC website (it doesn't help not actually knowing what the program might have been - I'm guessing it was Daily Politics). So did anyone happen to see it and either point me to a "watch again" URL or explain what he said, specifically about LVT and housing. Because it would be quite significant since even LVT supporters in the higher echelons of the party have so far not been keen to discuss it as anything other than a taxation base and this could be the first time that someone has shown they understand it's got a whole greater relevance than that.

More and more recently I hear or read people saying that Tony Blair's ten years in power has generated in them a deep distrust and even loathing of politics and politicians. Through sleaze, spin, wars, a vast growth in the reach and size of the state - most of which appears to many to have gone straight into the pockets of corporate bosses and shareholders, he has produced a far more powerful advertisement for the possible benefits of a minimal state than many who have tried to explain it academically through their writings.

Even now, in his political retirement, with his vulgar rush to pick up lucrative jobs where he could use his rent-seeking influence to further the very fat-cat industries he pledged to attack in 1997, he still generates much loathing. Forget the Lisbon Treaty or EU Constitution, I'm ready to campaign for an "out" vote in an "in or out" referendum should Tony Blair get anywhere close to becoming the first permanent EU president.

And from behind the portcullis I don't believe that the current crop of party leaders are rising to the real challenge of Blair's legacy. In fact, ostrich like, I feel they view it as merely a series of mistakes that can be put right by more government, just of a different political hue, when in reality the message of Blair's premiership is clear:

Government is moribund, inherently corrupt, a necessary evil for a particular point of human development. A point that has been passed and government can do no more except fight for its own existence as if it has a right to exist regardless of and separate from the desires and needs of the people it seeks to govern. This infantilizing of the people (indeed we even call it the "nanny state" in tacit recognition of that infantilization) needs to be brought to an end.

I was at some training last week on dealing with "Difficult, Disturbing and Dangerous Behaviour". In an aside about the nature of psychopathy the trainer, himself a clinical psychiatrist, suggested that perhaps politicians are in fact psychopaths. It got me looking up the definition of a psychopath. Judge for yourself how many of these criteria Tony Blair meets:

Personally, I make it at least half of them.

Maybe my blog reader is faltering, but I seem to be getting enough comment on the Irish EU Treaty vote from eurosceptic types. But very little from members of the most avowedly "pro-EU" political party in Britain. Are the Lib Dems collectively stunned by the result?

As that strangest of beasts a pretty anti-EU Lib Dem I'm personally kind of pleased.

...it's more like 2% of our money that is actually real, tangible stuff.

You're lucky if you happen to have some of the real stuff in your hands in fact. Why shouldn't the good old coin counterfeiter have a go. The Masters of the Universe who are at this very moment plunging us all into financial depression are the ones who are really the counterfeiters. And on an unimaginable scale. So unimaginable that we would rather believe it's not been happening.

The fact is that what we think of as pounds and pence are really only represented in the real world by, at the last calculation, about £45bn worth of notes and coins. Yes, that's the sum total of what the state has ever issued in our name.

But add up what we all have in our bank accounts and the humungous numbers represented by our outstanding mortgage balances and so on, there are more like £1,800bn or one point eight trillion.

Is it any wonder that this house of cards is teetering? And the fraudulent pound coins and notes that sometimes inconvenience us when a shop assistant tells us we can't use the money we thought we had are only the visible manifestation of a fraud so much grander we'd prefer not to think it exists.