Friday, February 27, 2004
Lords Hansard 25 Feb 2004 (240225-02):
Lord Berkeley asked Her Majesty's Government:
Whether, in the light of a report that land values around Jubilee Line stations have increased by £13 billion, an element of such gains should be made available to fund new rail lines.
Lord Davies of Oldham: My Lords, at present land value increases are partially captured via measures such as developer contributions and business rates. The Government have no plans to impose new taxes on businesses or households for value uplifts associated with the existing Jubilee Line extension. The Government continue to keep funding options under review and will take account of any recommendations arising from the Barker review of property.
Lord Berkeley: My Lords, I am very grateful for my noble friend's reply. Would he not agree that the enhancement of property value could be used to at least part-fund, if not wholly fund, Crossrail? Is it not right that the property industry should contribute something to the common good created by such new lines? Does he agree that it would be a good idea to set up a task force with the Treasury, the ODPM and the Department for Transport to see how that could be delivered and help with the funding of Crossrail?
Lord Davies of Oldham: My Lords, as my noble friend will know, a decision on Crossrail has not yet been made, but the Government have made it clear that a significant contribution would be expected from businesses that benefited from the development, in addition to any government contribution.
Baroness Scott of Needham Market: My Lords, does the Minister not agree that it is ironic that, at the moment, many transport infrastructure projects do not go ahead because there is not enough finance publicly available? By using the increases in land values that accrue after a project has been built, transport improvements for the public would be gained at no cost to the taxpayer, and would provide an opportunity for wealth creation on the part of the current landowners.
Lord Davies of Oldham: My Lords, there is something in what the noble Baroness says, but she will recognise that it is quite difficult to quantify the enhanced value of property from transport developments. We would certainly find that extremely difficult with regard to the original Question on the Jubilee Line extension. She will also know that attempts in the past to tax land enhancement values have proved very difficult.
Lord Berkeley asked Her Majesty's Government:
Whether, in the light of a report that land values around Jubilee Line stations have increased by £13 billion, an element of such gains should be made available to fund new rail lines.
Lord Davies of Oldham: My Lords, at present land value increases are partially captured via measures such as developer contributions and business rates. The Government have no plans to impose new taxes on businesses or households for value uplifts associated with the existing Jubilee Line extension. The Government continue to keep funding options under review and will take account of any recommendations arising from the Barker review of property.
Lord Berkeley: My Lords, I am very grateful for my noble friend's reply. Would he not agree that the enhancement of property value could be used to at least part-fund, if not wholly fund, Crossrail? Is it not right that the property industry should contribute something to the common good created by such new lines? Does he agree that it would be a good idea to set up a task force with the Treasury, the ODPM and the Department for Transport to see how that could be delivered and help with the funding of Crossrail?
Lord Davies of Oldham: My Lords, as my noble friend will know, a decision on Crossrail has not yet been made, but the Government have made it clear that a significant contribution would be expected from businesses that benefited from the development, in addition to any government contribution.
Baroness Scott of Needham Market: My Lords, does the Minister not agree that it is ironic that, at the moment, many transport infrastructure projects do not go ahead because there is not enough finance publicly available? By using the increases in land values that accrue after a project has been built, transport improvements for the public would be gained at no cost to the taxpayer, and would provide an opportunity for wealth creation on the part of the current landowners.
Lord Davies of Oldham: My Lords, there is something in what the noble Baroness says, but she will recognise that it is quite difficult to quantify the enhanced value of property from transport developments. We would certainly find that extremely difficult with regard to the original Question on the Jubilee Line extension. She will also know that attempts in the past to tax land enhancement values have proved very difficult.
Monday, February 23, 2004
Milton Friedman: "I am not a Georgist"
The reason why I have not allied myself with the "Georgist" movement is very simple. While I share some of its views, I do not share its basic view. ... I believe that it makes far too strict a differentiation between land and other sources of productive services. ... On the other side of the issue, there are many other resources, of which human labor is one of the most important, which are, to put it in technical economic jargon, in inelastic supply so that a tax on the return from such services is unlikely to affect the amount of such services made available for market use.
I realize that in almost all other respects the views of the Georgists and of my own are very much the same. I am more than glad to join with them in common objectives, but I could not ally myself with the Georgist movement in any sense which suggested that I agreed with its fundamental premises.
Extracts from a letter written in 1979 to an admirer of Henry George, School of Cooperative Individualism
The reason why I have not allied myself with the "Georgist" movement is very simple. While I share some of its views, I do not share its basic view. ... I believe that it makes far too strict a differentiation between land and other sources of productive services. ... On the other side of the issue, there are many other resources, of which human labor is one of the most important, which are, to put it in technical economic jargon, in inelastic supply so that a tax on the return from such services is unlikely to affect the amount of such services made available for market use.
I realize that in almost all other respects the views of the Georgists and of my own are very much the same. I am more than glad to join with them in common objectives, but I could not ally myself with the Georgist movement in any sense which suggested that I agreed with its fundamental premises.
Extracts from a letter written in 1979 to an admirer of Henry George, School of Cooperative Individualism
Saturday, February 21, 2004
Friday, February 20, 2004
Martin Wolf: Why on earth not put a tax on land?
Taxing land, rather than development, is moral because owners contribute nothing to land's value; and efficient, because taxing land distorts nobody's choices.
Quote from Winston Churchill:
"Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains - and all the while the landlord sits still . . . To not one of those improvements does the land monopolist, as a land monopolist, contribute . . . He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived." (thanks to Matthew Turner)
Full article: FT (subscription only), 20 February 2004
UPDATE: Fuller except available at the Progress Report.
Taxing land, rather than development, is moral because owners contribute nothing to land's value; and efficient, because taxing land distorts nobody's choices.
Quote from Winston Churchill:
"Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains - and all the while the landlord sits still . . . To not one of those improvements does the land monopolist, as a land monopolist, contribute . . . He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived." (thanks to Matthew Turner)
Full article: FT (subscription only), 20 February 2004
UPDATE: Fuller except available at the Progress Report.
Thursday, February 19, 2004
"Encourage growth, discourage speculation, benefit most homeowners"
PHILADELPHIA, PA - City Controller Jonathan A. Saidel today released a study performed by a research team from Drexel University, which assessed the City of Philadelphia’s real estate valuation to determine who would save more and who would pay more under the Controller’s proposed shift to Land-Value Taxation. The report’s conclusions were consistent with the Controller’s assertion that approximately four in five Philadelphia residential properties would see savings under the proposed shift.
“This is a major step forward for our efforts to promote the use of Land-Value Taxation as a tool to improve the city’s overly burdensome and confusing tax structure,” said Controller Saidel. “The fact that an independent evaluation of the data confirmed that Land-Value Taxation would benefit most homeowners while encouraging growth and discouraging speculation is very heartening.”
...
“Right now, we increase tax assessments on those who maintain and improve their properties while we actually reduce tax assessments on those who allow their properties to decay and bring down the value of entire neighborhoods,” said Controller Saidel. “Land-Value Taxation would reward owners who strengthen neighborhoods while it would punish those who are causing blight across the city.”
In its Tax Structure Analysis Report, the Controller’s Office investigated two cities with land-value taxation, Allentown and Harrisburg, to determine the development response to the shift in property taxation. According to Harrisburg Mayor Stephen Reed, the city has managed to reduce its vacant building stock from more than 4,000 to fewer than 500 during the past two decades — a drop of approximately 90 percent. In Allentown, both the value for new commercial construction and for new residential construction increased substantially after the shift to Land-Value Taxation.
From a press release from the Philadelphia Office of City Controller, 12 March 2003
PHILADELPHIA, PA - City Controller Jonathan A. Saidel today released a study performed by a research team from Drexel University, which assessed the City of Philadelphia’s real estate valuation to determine who would save more and who would pay more under the Controller’s proposed shift to Land-Value Taxation. The report’s conclusions were consistent with the Controller’s assertion that approximately four in five Philadelphia residential properties would see savings under the proposed shift.
“This is a major step forward for our efforts to promote the use of Land-Value Taxation as a tool to improve the city’s overly burdensome and confusing tax structure,” said Controller Saidel. “The fact that an independent evaluation of the data confirmed that Land-Value Taxation would benefit most homeowners while encouraging growth and discouraging speculation is very heartening.”
...
“Right now, we increase tax assessments on those who maintain and improve their properties while we actually reduce tax assessments on those who allow their properties to decay and bring down the value of entire neighborhoods,” said Controller Saidel. “Land-Value Taxation would reward owners who strengthen neighborhoods while it would punish those who are causing blight across the city.”
In its Tax Structure Analysis Report, the Controller’s Office investigated two cities with land-value taxation, Allentown and Harrisburg, to determine the development response to the shift in property taxation. According to Harrisburg Mayor Stephen Reed, the city has managed to reduce its vacant building stock from more than 4,000 to fewer than 500 during the past two decades — a drop of approximately 90 percent. In Allentown, both the value for new commercial construction and for new residential construction increased substantially after the shift to Land-Value Taxation.
From a press release from the Philadelphia Office of City Controller, 12 March 2003
Wednesday, February 18, 2004
Subsidising Landholders
Not only does the richest man in Britain receive £1,000 per day from the taxpayer but he pays no tax on the source of his wealth. The land element of the rent he collects from his inherited estates is unearned. We don't need to increase income tax to fund our public services, we need a land value tax.
Carol Wilcox
Labour Land Campaign
From Letters, The Guardian, 28 January 2004
Not only does the richest man in Britain receive £1,000 per day from the taxpayer but he pays no tax on the source of his wealth. The land element of the rent he collects from his inherited estates is unearned. We don't need to increase income tax to fund our public services, we need a land value tax.
Carol Wilcox
Labour Land Campaign
From Letters, The Guardian, 28 January 2004
Monopoly
At the turn of the century a Maryland Quaker, Lizzie Magie, was trying to develop a game that would illustrate the inequities of capitalism and promote a popular "single tax" movement led by Henry George. A century ago this month she received a patent for The Land lord's Game; the illustration in the US Patent Gazette is eerily similar to Monopoly.
The Landlord's Game became a Quaker pastime; over the years little improvements and local details were added by players. Eventually it became known as Monopoly, and a version that used the streets of Atlantic City, New Jersey (still used in the US version of Monopoly) was shown to a man named Charles Darrow in 1931. He sold the rights to Parker Brothers games in 1936. The Quakers' 30-year-old instructive little anti-capitalism game became, in other hands, the opposite. You cannot, as Hayward is fond of pointing out, copyright a board game, but Parker Brothers set about protecting their interests, purchasing the rights to Lizzie Magie's game and distributing a few hundred sets.
From "I rolled a two - and got a ghetto stash", The Guardian, 21 January 2004
The game of Monopoly was indeed designed to promote the ideas of Henry George (I rolled a two - and got a ghetto stash, G2, January 21). But George was not "anti-capitalist" - in fact, he was a liberal and a believer in free trade. His view, and that of Monopoly's creator Lizzie Magie, was that the system of land ownership prevented capitalism from functioning properly. Landlords are able to extort huge payments from the propertyless, as anyone who has landed on a hotel on Mayfair knows, and this grants them monopolistic control of the economy. The point of Monopoly was to show that, with land ownership laws as they are, sooner or later all the money ends up with one player.
Toby Lloyd
Henry George Foundation
From Letters, The Guardian, 24 January 2004
(For more on Monopoly, see here and here)
At the turn of the century a Maryland Quaker, Lizzie Magie, was trying to develop a game that would illustrate the inequities of capitalism and promote a popular "single tax" movement led by Henry George. A century ago this month she received a patent for The Land lord's Game; the illustration in the US Patent Gazette is eerily similar to Monopoly.
The Landlord's Game became a Quaker pastime; over the years little improvements and local details were added by players. Eventually it became known as Monopoly, and a version that used the streets of Atlantic City, New Jersey (still used in the US version of Monopoly) was shown to a man named Charles Darrow in 1931. He sold the rights to Parker Brothers games in 1936. The Quakers' 30-year-old instructive little anti-capitalism game became, in other hands, the opposite. You cannot, as Hayward is fond of pointing out, copyright a board game, but Parker Brothers set about protecting their interests, purchasing the rights to Lizzie Magie's game and distributing a few hundred sets.
From "I rolled a two - and got a ghetto stash", The Guardian, 21 January 2004
The game of Monopoly was indeed designed to promote the ideas of Henry George (I rolled a two - and got a ghetto stash, G2, January 21). But George was not "anti-capitalist" - in fact, he was a liberal and a believer in free trade. His view, and that of Monopoly's creator Lizzie Magie, was that the system of land ownership prevented capitalism from functioning properly. Landlords are able to extort huge payments from the propertyless, as anyone who has landed on a hotel on Mayfair knows, and this grants them monopolistic control of the economy. The point of Monopoly was to show that, with land ownership laws as they are, sooner or later all the money ends up with one player.
Toby Lloyd
Henry George Foundation
From Letters, The Guardian, 24 January 2004
(For more on Monopoly, see here and here)
