Since the ABC seems so keen on raising taxes, here’s another he might like to consider – a land value tax (LVT) on all real estate holdings – agriculture, forestry, prime London residential etc.
Currently we have numerous taxes on income – we also have taxes on consumption – but we have little in the way of taxes on wealth that has been hoarded for generations by families and institutions since the Norman conquest. (Yes we have IHT – but the really big estates have lots of clever ways of avoiding it.)
Just 6000 families (0.2% of the population) still own about 70% of the land in the UK. By anyone’s definition that is a monopoly – and we all know that monopolies are bad for economies.
It also means that despite years of apparent progress we still live in a semi-feudal system. A system supported by huge taxpayer-funded subsidies from the CAP. Although we can’t abolish the CAP (which benefits the COE as one of our largest landowners) we can at least tax the beneficiaries and redress the balance.
The COE has is also opposed to planning reform that might encourage urban sprawl – a land value tax would encourage more businesses to build up rather than out.
LVT would encourage building firms to build faster so reducing their land banks and making housing more affordable (another laudable aim of the COE). It should also encourage some people and institutions to sell land to those who can make more productive use of it, so perhaps encouraging small start-up farmers and market gardeners (transactions are an important part of a vibrant economy).
Arable land has increased in value by some 135% over the last 10 years (with prime now worth over £7,000 an acre) and nearly all that increase benefits the owners. Surely the COE can’t think that is right?
So Father Williams, how about coming out in favour of a say a £50/acre land tax – payable by everyone including church, state, corporations and royalty (I suspect the POW will veto this idea but that simply highlights another problem with our constitution).
LVT would raise a minimum of £6,000,000 from the COE alone (and that’s just for it’s rural land holdings). There are 60m acres in the UK – so LVT should raise £3,000,000,000 a year. I am sure the government would spend these receipts wisely.