Thursday, April 08, 2010

British land: more unequal than Brazil

An eye-catching snippet from the Financial Times:

"Britain’s history is such that land is distributed more unequally than in Brazil. There, 1 per cent of the population owns 49 per cent of the land; here, 0.3 per cent owns 69 per cent."

This element of Gentlemanly Capitalism - a term sometimes used to denote an alliance between the older landowning classes and newer representatives of financial capital and rentier interests in the City of London - remains vibrant, it seems. The article continues, urging governments (this is aimed at Britain but has far wider relevance):

"introduce a tax on land values. Whereas taxing work is wasteful – less is produced and no tax is raised on the lost output – land is in fixed supply so a tax on it is less harmful (and impossible to avoid). Shifting the tax burden from labour to land would therefore boost economic growth, according to an OECD study.

Taxing land values could also limit property bubbles, which divert funds from productive investment in booms and then cause terrible busts – without discouraging development (unlike property taxes), mobility (unlike stamp duty) or investment (unlike interest rate rises).

It would also be fair."

We support that, of course, as part of a broader system of taxation.


Blogger Physiocrat said...

Great! But what other taxes does one need, especially bearing in mind that taxes cut into land value?

Booze n'baccy, I suppose but surely vice taxes are the only other taxes that are needed? Every tax costs money to set up and run, even before a single penny has been collected.

Road pricing is a form of LVT so can be used to keep traffic volumes down to reasonable proportions. Efficient road pricing and spending the revenue on things like urban tramways is probably the most effective way of keeping carbon emissions down, if one is worried about that sort of thing.

1:41 pm  

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