We are 8 days away from our fundraising goal and support is
on the up. We have to thank all of our
supporters, and a special thank you goes to The
Henry George Foundation of Great Britain who has become our first sponsoring
entity. We are very moved by their
support and will be working with them to ensure the content of our project
reflects the values of LVT.
To pledge support for the project please visit:
LVT addresses the right of every citizen to be housed and to work on the nation’s land. Housing and employment are important topics and both are in poor supply. From our perspective this is because the current fiscal systems do not go far enough to promote a booming economy and to create a context where building truly affordable homes is incentivised.
Introducing LVT will not only generate a large amount of revenue to the public purse – which would be used to replace some of our less productive taxes, but is also a fiscal system which promotes land use efficiency. There are many questions surrounding LVT and our project aims to answer these. Today’s blog looks at one specific question that keeps being asked, “But what about the Farmers?”
The question is based on the idea that farmers own a lot of land which would suddenly be subject to a rate of tax. This in itself is misleading. Tenant farmers, farmers who rent the land that they work upon would still pay rent to their landlords, but a small percentage of their rent would now be collected from their landlord by their local government to fund public services and infrastructure.
In the case where the farmer is the landlord they would now be subject to the rate themselves, as would any landlord. To answer this question more meaningfully it would be best to rephrase and ask the important question – “what about landlords whose land is rented by businesses?”
For this it is worth looking at the personal allowance threshold before we are able to answer the question. In a truly progressive system we would allow each citizen a personal land value allowance, similar to the untaxed level of personal income tax allowance. The land value allowance would be in two parts:
1. A home allowance: This is an allowance based on your right to be housed.
2. An employment allowance: This is an allowance based on your right to earn a living.
Land Value Tax acknowledges that Land Value is determined by the community, similar to the way a free market operates in creating the market price for a commodity. The difference to the free market model is that, unlike other commodities, the supply of land never changes. To house and employ people we need access to land*. The landlords we are considering either have businesses on their land or homes. On a given plot of land we could house one person or we could house 10 people and similarly we could employ one person or we could employ 10 people. The homes would have to be affordable and to a standard of acceptable living and employment would also have to be based around something like the living wage with a full-time number of hours should that be desired by the employee. As a landlord, you would be given Land Value Tax breaks based on the number of people you are housing or employing on your land. This brings land into it most efficient use, addressing employment and the lack of affordable housing.
The purpose of owning land is to make use of it. There is unused land in urban centers that is being held onto and not sold or considered for development because there is currently an industry in ‘land banking’; holding onto land because of the speculation that it may be worth more money once other people, businesses, investors and public services improve the land around it. This practice is the main cause of urban sprawl which we considered in an earlier blog. By incentivising the best permitted use of land we will be able to facilitate a booming economy, tackle unemployment and address the lack of affordable housing.
Back to our farmers, who own land away from the urban centers. Their land will be valued more based on factors of how fertile the land is and perhaps some transport links or location value to public services should these be nearby. If the land is more fertile it would mean that more people could be employed on that land to make the best use of its fertility. Whilst it would be subject to a higher rate of Land Value Tax it would also be able to receive more tax breaks because of the greater number of employees it would afford.
We have a problem and we want your help to bring about change. The problem is that not enough people are familiar with Land Value Tax and this stops fundamental change that would benefit us all.
The solution is to raise awareness, educate, inform and discuss.
Our project aims to create an easy to understand, engaging, punchy and entertaining documentary that brings Land Value Tax to life.