We need more enterprise and innovation; not less

Eaxctly how do its proponents think stacking more tax on enterprise and innovation would ease any of the manifold UK economic or social crises?
 
Of course it wouldn’t: what is required is more enterprise and innovation; not less.
 
Hammond’s proposed 2% tax on online sales will be passed to Amazon’s sellers and then deducted from UK wages. How can such a flawed financial recipe aid UK citizens facing Austerity?
 
It’s time to focus on how Annual Ground Rent/Land Value Tax would collect surplus production fairly from Tesco, Amazon and UK citizens to fully fund public services.
 

North-South Divide can be healed with AGR/LVT

 

Q. How would the North-South Divide be healed with Annual Ground Rent/Land Value Tax?

A. By collecting and distributing the returns (growing site values – biggest at the economic centre) on taxes invested in amenities by EVERYONE.

A proportional distribution of returns on taxes invested in amenities by the UK regions (including Scotland) would have made the UK Idea a union of equals. Prosperity produced by working together would have been shared.

Instead we have endemic and accelerating inequality: those socially-produced returns go to UK site owners, engendering a community of landlords fattened on unearned wealth (extracted from its producers).

Government failure to collect the AGR/LVT we all produce causes the rabid land speculation at the root of the housing crisis. Public services are starved whilst landlords celebrate. Renters of homes become their indentured servants for life. Communities at the margin decay: businesses there cannot afford the landlords’ replacement taxes on wages and trade. They are destroyed. Employment is gone and citizens there must die on average up to 20 years early.

AGR/LVT please!

Best chance since 1945 for a cross-party new start for the UK

In Brussels Blitz or £500bn Dividend Fred Harrison and Ian Kirkwood discuss how post-Brexit Britain could flourish as never before.

For 300 years the four nations of the United Kingdom laboured under a tax regime which imposed an artificial ceiling on ceiling on productivity. Those taxes continue to create havoc in people’s lives.

The only viable strategy for the UK is a fiscal reform-led programme that organically restructures the economy to replace rent-seeking with value-adding enterprise. This would re-balance relationships between the regions by eliminating the bias that now favours London. And it would transform the City of London to secure prosperity across the kingdom.

A national conversation is needed to create the democratic mandate that authorises the re-design of the public’s finances. And the leaders of all political parties must agree to work together to eliminate the internal barriers that rupture people’s health and wealth.
The annual damage caused by the tax regime amounts to at least £500bn. The palliative policies that are supposed to mitigate that damage have failed.

Twice in the 20th century the people of Britain mandated the structural reform of their finances. Twice the law was enacted. Twice, Parliament failed to honour the “rule of law”. Will Parliament now grasp the opportunity offered by Brexit to unite the nation in a new kind of prosperity?

SLRG talk to Scot Gov employees

Not long now till SLRG’s Professor Roger Sandilands addresses Scot Gov economists and employees (19 October) on Henry George and Annual Ground Rent/Land Value Tax.

It is the one subject we all need to get our heads around if we want something we certainly don’t have now: a boosted economy that shares prosperity.

Good luck Roger!

Investing after AGR cancels the returns from sites

SLRG’s Professor Roger Sandilands answers the question of how we’d be invited to invest in productive enterprise once unproductive land speculation is cancelled with AGR/LVT.
Share certificates pretty much as today?
 
Answer: Yes; why not? Investors’ prospective returns would
 
(a) be reduced by AGR and its consequential effect on the value of the firm’s “capital” (i.e., land) values.
 
(b) be enhanced, we must assume, by a corresponding (at least) reduction in corporate taxes and by the general boost to the economy as deadweight effects disappear.
 
It is vital that AGR replaces taxes rather than supplements them.
 
As taxes fall, so the underlying AGR would be revealed (the ATCOR principle). But the higher AGR would be its new market-clearing value, a value that would be voluntarily paid by those who successfully bid for space. Thereafter, the wealth they produce through their work and enterprise would no longer be penalised by the high marginal tax rates they currently bear.
 
In short, AGR, as a genuine fiscal revolution, would incentivise investment instead of penalising it.
Entrepreneurs can issue shares or borrow from banks, but investors in the new regime would do so to produce wealth rather than engage in Rent-seeking.

Don’t pay for sites up front

Imagine a Scotland in which buying ‘property’ meant you didn’t pay for the site up front.

Just for the building and for transferring the deed.

Instead you’d pay the annual rental value of the site to the state in place of current taxes on wages and trade (which repress enterprise and reduce Scotland’s wealth) and Council charges.

AGR/LVT

Scotland would simply be collecting the stream of wealth we all produce together. This social wealth is today allocated to site owners who receive it as unearned income for doing nothing. That the rest of us get none explains social dislocation and unequal life chances across Scotland.

Worse, the sum is over half the gross income of Scotland: its absence from the public purse explains our starved public services.

Thinking a little further, the range of site rental values from the economic centre to the periphery builds automatic progressivity into AGR/LVT, permitting life and work to exist again at the margin.

For those intent on addressing Scotland’s housing crisis, starved public services, land speculation and banking, personal and government debt, premature deaths by zone, depopulation, cyclical recessions and perpetual deficits, AGR/LVT is where to look for the solutions.

Is the Scottish Government a public body?

Scot Gov, one of the 50 actions you promised in 2016 was to “place a new duty on public bodies to consider the impact their decisions could have on poverty and disadvantage.”

Scot Gov, are you a public body?

If so, why are you choosing to persist with Income Tax, inflicting deadweight losses on Scots to the tune of at least £12bn a year, when there is an alternative source of revenue (AGR/LVT) which inflicts none?

You are choosing to sustain and increase AVOIDABLE poverty and disadvantage for Scots in blatant disregard of the fine words penned in your Fairer Scotland Action Plan.

https://www.gov.scot/FairerScotland

Calculating AGR/LVT charges when Council Tax and Income Tax are replaced

By SLRG’s Duncan Pickard
 

In the current tax regime land is permitted by society to be a private investment. Collecting AGR/LVT would partially or completely end this practice, which inflates land values far beyond their actual annual rental value (the amount someone would pay each year to monopolize a site’s natural and socially provided amenities.

When looking at the likely AGR liabilities it is therefore necessary to bear in mind that current site values are not a good guide. For example, prime farms today sell for about five times their productive value because governments choose to make them attractive investments with various tax breaks and access to subsidies.

This means that a proposed 1% AGR/LVT levy on prime agricultural land would not be £80 per acre (1% of today’s £8,000/acre) but £16 (1% of £1,600). A fundamental difference. And one which should also be borne in mind when predicting AGR liabilities for the owners of residential and urban sites.

‘Economic Rent’ is the surplus wealth of a country which remains after the costs of labour and capital have been met. Most of it is pocketed as unearned income by those who own land.

Because the government does not collect the economic rental surplus to pay for its necessary functions, it has to tax peoples’ earnings. This is detrimental to employment and trade. The collection of AGR by the government would have no detrimental effects on employment and trade but would instead encourage them by optimising the use of land.
The rental value of land is less variable than its market price which is influenced today by government interference, such as ‘help to buy’ schemes. The annual rental value of land is likely to remain constant unless it is increased by adjacent favourable developments or decreased by detrimental ones.
 
The market price of land is a useful guide to assess annual rental values because more data are available; but as the rental market for urban land increases adjustments can be made.
 
The annual rent of agricultural land with long term secure tenancies, for example, has traditionally been 5% of its market price (and the market price is 20 time its annual rent). But the current market price of agricultural land is almost 100 times its average annual rent because speculators, such as James Dyson, are buying land for the tax advantages.
 
‘Slipper farmers’ bid up farm prices, in turn attracting others to buy, resulting in the currently grossly inflated prices. The market price of urban land is similarly inflated by the favourable taxation of those who own landed property, especially that which is unused.
 
So whilst site values are a guide to the annual rental value which AGR/LVT would collect, the economic rental value of a site is its value above that of sites with no rental value because of their location rendering them capable only of providing subsistence: there is no surplus to provide rent after the costs of labour and capital have been met. The positive implications for the tax liabilities of peripheral communities is obvious.

Voters and politicians need to identify ‘Deadweight Losses’

Whether you are a politician or a voter, do you know what the deadweight losses of tax are?

If not, you cannot start to sort Scotland’s economic and social problems.

That is because the damage inflicted to economies and communities when the wrong taxes are chosen is devastating (currently up to £1 trillion a year in the UK; Scotland up to £72bn). The level of damage, even if it were half as bad as this, is far worse than any worst case scenario that could be inflicted on us by the EU post-Brexit.

Voters need to press their political representatives to move from taxing wages and trade to raising revenue from the rents produced by society itself, or which are provided free by nature. Only then can the enterprises needed to empower communities across Scotland be free to add maximum (shared) wealth to our country.

AGR/LVT please!