- 3,398 hits
This is a spare 'blog in case my main 'blog at markwadsworth.blogspot.com isn't working
It would be quite unnecessary to have full-on LVT to achieve this – it is quite sufficient to align the tax rates on commercial and residential land/buildings; for example, Business Rates could be halved and Domestic Rates (or LVT, or whatever you want to call it) set at about 2% per annum of the current selling prices of housing. This would raise about £100 billion a year, which would allow us to replace COuncil Tax etc (see below) as well as cutting VAT to 10% (for example).
* For my part, I have always suggested rolling Council Tax less Council Tax Benefit, Stamp Duty, Capital Gains Tax, Inheritance Tax, Insurance Premium Tax and TV licence fee into an annual LVT on residential land and buildings of about 1% per annum on current selling prices (in Northern Ireland, Domestic Rates are already calculated as 0.7% per annum on 2005 selling prices, so for them it would be no particular upheaval).
By and large, few people would pay more or less over their lifetime than they do now, and only a quarter would pay noticeably more on a year-by-year basis – the increase being the annualised amount of one-off taxes such as CGT, IHT and SDLT which they no longer have to pay. Of course, CGT and IHT would be scrapped on everything – land, buildings, shares, other investments – so that there is no tax advantage or disadvantage to investing in some things rather than in others.
Together with Business Rates, this would mean about £65 – £70 billion a year is raised from land taxes, which is only about a fifth of the total amount needed to replace all the Bad Taxes (VAT, National Insurance, income tax and corporation tax), but at least it’s a step in the right direction. In Year Two we then increase the “about 1%” rate and reduce Bad Taxes a bit, and so on and so forth, the whole process would take five to ten years at its very fastest.