If a group of businesses on an industrial park all do well, and make lots of profit, why should that raise the land values? The land has to be appealing in some way: mway access, trams outside, sewers, electricity, easy access for workers, hospitals, excellent schools give high quality workers, etc. LVT cares not a hoot how much money is made on that land.
Living rooms have shrunk?
- Thread starter pete50
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I choose a coffee shop, town centre, prime real estate.
Land value goes up.
LVT goes up
My coffee shop pays more tax.
LVT becomes a penalty on production.
Wait thats a bit like corporation tax.
Im moving my coffee shop to a farmers field. Oh no, thats right I cant planning rules prevent it. Gosh that means planning rules cause distortion, so without changing planning rules LVT becomes a hugely distorted tax due to planning restrictions.
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hahahahahaha
You wouldn't know a penalty on production if it hit you on your head. Your just making up terms as you go along. Are you saying a penalty of production raises marginal costs, average costs, short run costs, long run costs?
Would you supply less coffee and biscuits if your LVT went up? Tell me about the marginal costs and benefits because you really are talking nonsense.
Corp tax is on profits. So nothing like that.
Currently there are high streets with lots of empty shops. Why is that? What is causing this? Why can the landlord just let them go idle?
So your argument is that your only option is to move your coffee shop to somewhere that has nothing. What a doozy. Its not even clutching at straws now you just foaming at the mouth.
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Martin Wolf. Chief economist of the Financial Times on the Duke of Westminster, a landowner who owns large parts of Liverpool and London's city centres. :
The essential point is quite simple: the value of [land &] resources is created by the economic activity of other factors of production. The owners of these resources can become hugely wealthy and are often untaxed on that increase in wealth: the Duke of Westminster is the richest Englishman simply because he owns a large amount of land in a valuable part of London. So why should he have command over the labour of so many other people?
That wealth is, in the strictest sense, unearned. If that rise in wealth were taxed away, other taxes -- those on labour, capital and entrepreneurship -- could fall. This would be both efficient (because taxes on rent do not create distortions, as Ricardo showed) and also just, because the wealth was unearned. Now, surprisingly, the UK allows foreign landowners to enjoy the increase in value created by the British economy, entirely tax-free. This is utterly crazy.
Let me add four other points:
"So, I conclude where I started: resources matter. It was a great mistake to exclude them [land and natural resource] from the canonical neo-classical model. It is also a great mistake not to tax their owners to the hilt."
Economic writer Fred Harrison:
"Land Speculators Are the Biggest Gainers. Who gains from this intellectual mess? One groups of people reap spectacular rewards, property developers, land speculators all reap windfall gains from one asset that sustains us all, LAND."
"In the good times when people go mad buying and selling properties, we lionise these developers. Yet all they are doing is cashing in the on the land values others create. Take the case of a cluster of flats adjacent to a prime brownfields site. Their presence gives value to the adjacent site, yet the thousands of residents of the flats will not share in the increased values they help create."
The essential point is quite simple: the value of [land &] resources is created by the economic activity of other factors of production. The owners of these resources can become hugely wealthy and are often untaxed on that increase in wealth: the Duke of Westminster is the richest Englishman simply because he owns a large amount of land in a valuable part of London. So why should he have command over the labour of so many other people?
That wealth is, in the strictest sense, unearned. If that rise in wealth were taxed away, other taxes -- those on labour, capital and entrepreneurship -- could fall. This would be both efficient (because taxes on rent do not create distortions, as Ricardo showed) and also just, because the wealth was unearned. Now, surprisingly, the UK allows foreign landowners to enjoy the increase in value created by the British economy, entirely tax-free. This is utterly crazy.
Let me add four other points:
- First, throughout history, the main source of wealth was land-ownership. The parasitic landowner became wealthy on the efforts of others -- peasants, tenants and even developers. Sometimes the parasite was also a farmer or developer, but that does not change the fact that these are two distinct economic roles. The parasite built fine castles and palaces and often sponsored music and culture. But he was still a parasite. The beauty of capitalism is that many of the wealthiest are no longer parasites. This is good. But many of the wealthy still are parasites. Moreover, now everybody wants to get rich by being a mini-landowner. That is a huge diversion of effort.
- Second, the financial system's ills are the result of unchecked credit-creation. Yes. But unchecked credit-creation would be impossible without collateral. Land is always the principal form of collateral (buildings are a depreciating asset). That is why financial bubbles that do not create credit booms (like the dotcom bubble) are economically benign, while property [land] bubbles are potentially catastrophic. When the value of collateral collapses, the financial system implodes.
- Third, there is really nothing new about this understanding of the role of resource rents. They were central to the classical system, from which modern economics, in its various forms, derives. Ricardo's analysis of rent remains intellectually impeccable.
- Finally, as Herman Daly has noted (http://steadystate.org/modernizing-henry-george/), today economically valuable resources are much more than just land (and what lies below it). They include all the services of the biosphere - those that are appropriated, those that are appropriable and those that are non-appropriable. If we do not think seriously and intelligently about how to price resources, we are likely to go seriously adrift, perhaps even into disaster. Here land is the least of our problems -- it is appropriable and, by and large, appropriated. So, at least, the price mechanism works, even though the distribution of the gain is grossly unjust. But, in other cases, no appropriation is possible, or at least it is not easy. Nobody can appropriate the atmosphere. It is nigh on impossible to appropriate the oceans. How do you own species diversity? These are serious challenges.
"So, I conclude where I started: resources matter. It was a great mistake to exclude them [land and natural resource] from the canonical neo-classical model. It is also a great mistake not to tax their owners to the hilt."
Economic writer Fred Harrison:
"Land Speculators Are the Biggest Gainers. Who gains from this intellectual mess? One groups of people reap spectacular rewards, property developers, land speculators all reap windfall gains from one asset that sustains us all, LAND."
"In the good times when people go mad buying and selling properties, we lionise these developers. Yet all they are doing is cashing in the on the land values others create. Take the case of a cluster of flats adjacent to a prime brownfields site. Their presence gives value to the adjacent site, yet the thousands of residents of the flats will not share in the increased values they help create."
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Here's an example of Notch answering a question:
Well, we can guess his answer. Most likely he didn't even watch them. He has certainly failed to grasp anything they explained. He's fallen back on a meaningless jumble of C&P.
Well, we can guess his answer. Most likely he didn't even watch them. He has certainly failed to grasp anything they explained. He's fallen back on a meaningless jumble of C&P.
You mean his comfort/default setting of attacking Corbyn.
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Keep up.
Capitalism as Martin Wolf states, "The beauty of capitalism is that many of the wealthiest are no longer parasites."
From one of the oldest companies in the UK, RS Clare of Liverpool:
"RS Clare started in business as a chemist, druggist and dry-salter in 1748, during the dawn of the Industrial Revolution which began in the North West of England. For the first time, wealth was generated from commerce, a part of the economy from which most landowners were absent unless they had minerals under their land."
From one of the oldest companies in the UK, RS Clare of Liverpool:
"RS Clare started in business as a chemist, druggist and dry-salter in 1748, during the dawn of the Industrial Revolution which began in the North West of England. For the first time, wealth was generated from commerce, a part of the economy from which most landowners were absent unless they had minerals under their land."
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