Purpose. This note was initially prepared for the UK Liberal Democrat Party’s Tax Commission. The author had heard that Sweden incorporates an element of property taxation within its income tax system and also has a very modern, map-based property tax and local income tax (LIT). The Party currently favours LIT but also wishes to develop its longstanding policy of land value taxation (LVT) by modernising existing property taxes. The reason for studying Sweden is that both its Tax Board and Land Survey Department are internationally renowned for the efficiency and transparency with which their land information and property tax systems work together. This note is based on an earlier version specially prepared for the Tax Commission: a more technical and theoretical discussion of the subject can be found shortly at www.landvaluescape.org
Summary. The Swedish tax system operates with a highly centralised administration. Direct taxation involves a single annual tax form each for individuals and companies but all taxes – including property taxes – can be paid off through earnings. Almost everyone pays local income tax (which averages 29%) whereas only people on above average earnings pay state income tax of around 20%. Continue reading
Like most 30 somethings with a substantial HECS debt and an addiction to avocado on toast, I am an aspiring first home buyer. I’d love to buy the home I currently rent: a daggy 1960’s ‘six-pack’ flat on a main road in Footscray. It’s currently valued around $360,000. To put down a 20% deposit, I’d need to save $72K. A daunting figure for a single woman on a not-for-profit’s payroll.
Much less daunting is $18K. This is the 5% “genuine savings” I require to apply for the government’s shiny new shared equity scheme, HomesVic. HomesVic enables first home buyers to access 25% equity funding towards residential property. Government-backed shared equity schemes have existed in W.A and S.A for a number of years. The initial pilot will include 400 first home buyers, buying new or established homes in strategic locations specified by the government. Footscray is on the list.
Public Revenue Without Taxation.
It is now widely recognised that the free market system provides a self-organising process that enables a more efficient allocation of a society’s resources than alternative arrangements based on the implementation of pre-conceived plans by central authorities. At the same time the market system offers much greater individual economic freedom and the opportunities for individuals to fulfil their potential in society.
In a free market, transactions are voluntary and are undertaken between a willing buyer and a willing seller. There are many independent buyers and sellers who can compete on quality of service and price. Prices are the outcome of the law of supply and demand, and the overall outcome under a prevailing set of conditions is a condition of stability and optimal allocation.
And yet, when it comes to the provision of public services, which in a modern economy can account for around half of the total economic activity, an entirely different mechanism is used which in many respects is the antithesis of the market system. Goods and services are often made freely available and corresponding costs are met mainly by taxation: “a compulsory contribution imposed by a public authority, irrespective of the amount of service rendered in return”. For these services there is now no willing buyer or seller, no competition and no price mechanism. If one traces back the origins of these arrangements and, in particular the varied and complex methods of taxation employed to collect revenue required to pay for the services, it is found that they are rarely due to the application of sound economic principles and more often are the result of short term political expediency. Continue reading
Star, London 27th April 1917.
This cartoon appeared in the radical London evening newspaper, The Star, must be understood in its context.
At the time of the Great War, Britain was very far from self-sufficient in food production, and the then German submarine campaign, which had been stepped up in 1917, seriously threatened external supplies. It was very important to do everything possible to increase home food production. At that time (unlike today) the large majority of farmers were tenants, and many of them were quite poor. Agricultural labourers, who were employed by the farmers, were much more numerous than now, and most of them were even poorer. Until 1917, there was no control on rents which an agricultural landlord could exact from his tenants.
When this cartoon was drawn, Rowland Prothero was President of the Board of Agriculture in the Coalition government. Legislation was being passed which controlled agricultural prices and also – for the duration of the war – farm rents. The cartoon suggests that, in the long term, any benefit designed to help the farmer would accrue to the landlord. Roy Douglas
The Cat and Dick Twittingham
Once upon a time there was a cat and his master, Richard Twittingham.
Dick was determined to make his fortune in London and planned to set off on the long walk from the Forest of Dean where he lived. But …
Outside a tavern in the year 1367, the first year in the reign of King Henry IV of England.
“Have you seen the cat?” asked Dick of the innkeeper.
“Do you mean THE cat?” enquired the innkeeper. “I don’t understand,” said Dick.
“Ah, well, either you see THE cat or you don’ t,” said the innkeeper, going about his business.
“Of course I can see my cat when he is here,” snapped Dick, “he is black and white with four legs and a tail and goes by the name of Tom.”
“Ah,” said the innkeeper. “Whither are you bound with your cat, then?”
“London, of course,” exclaimed Dick, “I’ve heard tell the streets are paved with gold.”
“So they are,” said the innkeeper, “so they are for them what can see THE cat.” Continue reading
Mason Gaffney has written a new book “Nature, Economy and Equity — Sacred Water, Profane Markets”, published in November 2016 issue of the American Journal of Economics and Sociology.
Ed Dodson has created a power point presentation to introduce the book, highlighting the important points.
The second presentation by Ed Dodson is an analysis of the U.S. residential property markets.
It is believed that the earth is something like 4,600,000,000 years old. How it came into being is not exactly understood, a mystery. It seems to be thought that massive rocky fragments were drawn together by gravity, becoming a single rotating orb turning in such a way that all parts receive light from the sun and then are shaded from it alternately.
Eventually it cooled to a temperature at which water could exist in its liquid form and cover large parts of its surface as it does today. This in turn is surrounded by a complete but very thin layer of atmospheric gases comparable in proportion to the skin on a fruit.
It is currently thought that Life began about 4,000,000,000 years ago. Again, we do not know how it came into being, another mystery. Not only do we do not know how it began but also we do not know what it is. Continue reading
And time there was, ere England’s griefs began,
When every rood of ground maintained its man;
For him light labour spread her wholesome store,
Just gave what life required, but gave no more;
His best companions, innocence and health;
And his best riches, ignorance of wealth.
Oliver Goldsmith. Continue reading
With 2.791.8101 Square Kilometres of surface Argentina is one of the largest countries in the world and with 36.223.9472 inhabitants one of the comparatively less populated. The actual ratio of inhabitants per Square Kilometres, 13, is one of the lowest in Earth.
In spite of being as a whole an almost empty country, the population is mostly concentrated in an about the city of Buenos Aires and some other few large cities like Córdoba and Rosario (about 12.000.000 people).
Being a country with such an abundance of land and so few inhabitants, nevertheless large sectors of the population live in slums surrounding the big cities, with no access to land.
This situation moved the Catholic Church to issue recently an Episcopal Document about the land problem in the country, proposing different solutions. In the foreword to this document Monseñor Carmelo Juan Giaquinta points out that the relation of the Argentineans with land “is maybe one of the worst in the World”. Continue reading