[SolarCross]

As much as I might wish it I can't see 100 years of encrusted bureaucratic thuggery disappear from Britain overnight so I consider the following a workable interim position suitable for the British context. In short the position will be a minarchist "nightwatchman" state where the role of the state is reduced to that of territorial defence only, which will be funded only by a land tax, a territorial defence fee. The main thing to elaborate on here is the replacement of the entire complicated and invasive tax regime with a simple land tax.

Land Tax

The advantages of a land tax are manifold especially in the British context where for centuries vast tracts of land are unavailable to the majority due to being held by aristocratic landowners whose ownership comes from extremely dubious methods.
- Simple, a land tax will be very simple and therefore inexpensive to administrate both for the payer and the collector.
- Land cannot be hidden or moved abroad so those liable to pay have no ability to evade taxation by moving wealth out of the country.
- It will create an incentive for those holding land to either use it productively or give up ownership. This will rectify in short order a very long term systemic problem in the UK of land hoarding created by the various enclosure acts over the centuries. This will also have the concurrent effect of increasing the supply of land in the land market which in turn reduce the market price of land and therefore in turn reduce the cost of living. It will also likely increase the amount of land returning to a wild or natural state, which will have obvious environmental benefits, since unowned land is naturally exempt from this tax since there is no owner to pay it.
- Logical, if the state's job is territorial defence then it makes sense that this activity is funded by land owners proportional the quantity of land they want to be defended.

The major benefits of this tax regime do not come from the tax itself but in all the messy plethora of taxes that it will replace. In the absence of Income tax, Sales Tax (VAT), Fuel Tax and all the rest the economy will recieve a major boost. Full employment, higher levels of saving and investment will be naturally result. Manufacturing may once again be viable in the UK which will do much to enhance export earnings. Living standards will improve dramatically.

Setting the tax rate

Naturally the exact amount of tax payable per acre of land can not be set entirely at the discretion of the recipients. Those that pay should have some ability to limit the rate. Thus the military should be obliged to publish a revised budget every four years the sum of which will be divided by the total acreage of owned land to arrive at the per acre tax rate. Those who are liable to pay the tax then can vote to approve or disapprove the budget and its consequent tax rate. In the event that the budget is not approved then the military must revise the budget until it is successfully approved. This will encourage the military not to inflate their budget to unreasonable amounts and to do sensible market research ahead of the budget revision to ensure they are not demanding more than people are willing to pay.

Your thoughts?

[Prosthetic Conscience]

It sounds like you're proposing the same rate per acre over the entire country. So a hill farmer in Northumberland pays the same for his 300 acres as the Duke of Westminster for his in central London, although the value of the London land is far greater, due to the development done by others right next to it. If that is what you propose, then it wouldn't work.

[SolarCross]

It sounds like you're proposing the same rate per acre over the entire country. So a hill farmer in Northumberland pays the same for his 300 acres as the Duke of Westminster for his in central London, although the value of the London land is far greater, due to the development done by others right next to it. If that is what you propose, then it wouldn't work.

I do think the rate should be proportional to land quantity rather than the market value. The market value is changable, subjective, it makes determining the rate difficult, complicated and whimsical and therefore expensive, prone to error and abuse. Moreover the astronomical values assigned to land in London is the consequence of very artificial land scarcity that the land tax is meant to address. The land tax will open up the vast amounts of land to the market which will demolish the artificially high values in London and other urban densities. What the Duke of Westminster gains in cheaper taxes he will lose in the market value of his property in London. Note this will greatly help the working poor in London who will have opportunity to become small land owners in London or elsewhere.

[SolarCross]

Just to throw out some figures. The yearly military spending in the UK is currently around 40 billion GBP. This is very high, the UK is one of the bigger defence spenders. But even with this high spending how would it work out in terms of a land tax? The total land area of the UK is around 245000 square km.
40 bill / 245000 / 1000000 = 16 pence per square meter per year.

Land tax for a small detached house with a modest garden will be 15m x 15m x 0.16 = 36 GBP per year

Land tax for a typical aristocratic estate will be 66 kmsq x 1mil x 0.16 = 10,000,000 GBP per year.

This is just to give a rough idea, it should be noted that the British military is responsible for the security of territories beyond the UK also such as British Virgin Islands, Gibraltar, Falkland Islands and many others and they should of course pitch in their acreage to the support of the military that protects them and so reducing the cost to the landowners in the home counties.

[Prosthetic Conscience]

So, 16p/sq. m is 10,000 *0.16 = £1600 per hectare. We'll take a typical hill farm - 230 hectares. That's £368,000 a year they have to find. Well done, you've just put them out of business. You, I believe, are in a rural area - ask any farmer you know if they could afford to pay £1600 per hectare. Just for the defence of the country.

Taxing farms so they go out of business will not "open up the vast amounts of land to the market". Why on earth would you think it would? People don't particularly want to go and live on a hill in the middle of the countryside. They need to be close to where they work. It's also far more efficient to have people living in towns and cities, where the distances for travel and utilities are far smaller, than uniformly spread over the country.

If your libertarian ideal is also abolishing all other forms of government spending at the same time (eg roads), who would own the roads? They'd be able to charge people huge amounts for access, I presume, because people would have no choice. They would, however, be paying very little tax.

[SolarCross]

I'm gunning for the aristos mainly; probably, as a refinement of the scheme, some kind of exception or discount could be made for agricultural uses of land. But then of course this will necessitate some level of snoopery to make sure that land claiming an agricultural discount is actually doing real agriculture and not just pretending for the sake of a tax break. I'd like to avoid that sort of thing if possible. The other thing is this 16p a square meter is presupposing that the entire defence budget is being paid for by UK land. But as mentioned the British Armed Forces provide protection to a quite sizeable lands outside of the UK also. Assuming those places pay their share too then the 16p per sq. meter might go down to 10p or less.

People are packed together like battery chickens and made to pay extraordinary sums for the privilege in the cities and this problem is in a large measure due to the artificial scarcity of land and development caused by the aristocratic waste of land and the bureaucratic obfustication of development. Isn't this problem worthy of a solution?

Roads

The bulk of the roads in the UK are supposedly public property so it follows then, in the absence of a looting bureaucracy, that those roads become the commons in terms of ownership. The maintenance then can be organised by anyone who fancies the job and funds found by voluntary contributions. Badly neglected roads might be plausibly claimed by entrepreneurs and turned into toll roads.

[Potemkin]

People are packed together like battery chickens and made to pay extraordinary sums for the privilege in the cities and this problem is in a large measure due to the artificial scarcity of land and development caused by the aristocratic waste of land and the bureaucratic obfustication of development. Isn't this problem worthy of a solution?

You seem to wish to erase the distinction between town and countryside. How very Marxist of you.

[SolarCross]

You seem to wish to erase the distinction between town and countryside. How very Marxist of you.

Don't get too excited; that is probably the only commonality between myself and your typical Marxist.

[Potemkin]

Thin end of the wedge, taxizen, thin end of the wedge....

[Prosthetic Conscience]

I'm gunning for the aristos mainly; probably, as a refinement of the scheme, some kind of exception or discount could be made for agricultural uses of land. But then of course this will necessitate some level of snoopery to make sure that land claiming an agricultural discount is actually doing real agriculture and not just pretending for the sake of a tax break. I'd like to avoid that sort of thing if possible. The other thing is this 16p a square meter is presupposing that the entire defence budget is being paid for by UK land. But as mentioned the British Armed Forces provide protection to a quite sizeable lands outside of the UK also. Assuming those places pay their share too then the 16p per sq. meter might go down to 10p or less.

But some of the 'aristos', such as the Duke of Westminster, are incredibly rich from owning the most expensive land. Their land in central London can be rented out at a far higher rate than that in central Newcastle.

People are packed together like battery chickens and made to pay extraordinary sums for the privilege in the cities and this problem is in a large measure due to the artificial scarcity of land and development caused by the aristocratic waste of land and the bureaucratic obfustication of development. Isn't this problem worthy of a solution?

It's not the aristocrats refusing to develop, or sell for development, that makes property expensive in London. Everyone just wants to live close to the centre - because there's prestige for some companies working there, others want to be close to those, or close to government; and other people want to be close to the West End for entertainment, shopping and so on. Yes, there are government restrictions on green belt development, and I can see a libertarian would want those gone - that would mean lower house prices in outer London, but if people are still looking to work in central London, they'll have long commutes too, so the prices will still stay high for areas with short commutes. But you don't need to change the whole tax system to do that.

A good basic principle of taxation is "take regular tax from those who can afford to pay regular tax". This means they will still be able to pay the taxes again next time. A progressive income tax is the best way of following this principle.

Roads

The bulk of the roads in the UK are supposedly public property so it follows then, in the absence of a looting bureaucracy, that those roads become the commons in terms of ownership. The maintenance then can be organised by anyone who fancies the job and funds found by voluntary contributions. Badly neglected roads might be plausibly claimed by entrepreneurs and turned into toll roads.

Voluntary maintenance of the roads? Do you seriously think that would happen? Yeah, you'd end up with toll roads, and an immense (though private) bureaucracy for collecting the tolls - complete with intrusive monitoring of car movements (unless you fancied stopping every few hundred yards to pay cash). And you're worried about 'snoopery' of whether land use is agricultural?

[Technology]

I've thought about this before as a way to limit abuse of private property. It would kick in/ramp in above certain sizes of property, so that people don't have to pay taxes on small use land, but they can't just purchase gigantic useful land without developing it into something that will create a profit and generate production.

Then again I'm a centrist on property - I think it's acceptable that very large and potentially disruptive/dangerous kinds and uses of property involve giving something back to the community as compensation, but I don't think there should be some sort of community permission for any use of land anywhere, ever, otherwise you don't have much liberty at all. Compensation for large uses seems to be a good balance, and encourages development in order to produce to meet demand, make a profit, and pay the bill for that use.

Of course, a single tax sounds good because it reduces bureaucracy, but it's also single point of failure unless it has some variability, because it's hard to set the right rates. If a single tax system is national, then areas like counties (or even states in the US) should be able to set their own rates and there will be competition to find the best balance between allowing people to develop what they want, and community compensation. Some areas could (democratically please) even become communist if they want by setting the tax to 100% and lowering the area threshold, so that all property transfers to local government/"the people" ownership, but other places could go full on YEEHAH ancap by setting it to zero/excluding their area, and we'll see which system spreads through adoption of the most successful system, being that it is possible to leave small areas and vote with your feet (especially when public land is available to homestead and you don't have to buy a super certified official house that costs >£100,000 to live, because current building laws prevent existing cheap property plans from being fulfilled).

[SolarCross]

But some of the 'aristos', such as the Duke of Westminster, are incredibly rich from owning the most expensive land. Their land in central London can be rented out at a far higher rate than that in central Newcastle.

You're still not getting it. The land values in urban densities are that way because everywhere else is off-limits to development. With the great estates being obliged to either become productive in order to pay their way or sell up, then the urban densities will become a relatively small part of a much wider pool of land available for development. Only 8% of UK land is urban so the vast majority of people have only a tiny pool of land available to get a share of. Artificial Scarcity.

It's not the aristocrats refusing to develop, or sell for development, that makes property expensive in London. Everyone just wants to live close to the centre - because there's prestige for some companies working there, others want to be close to those, or close to government; and other people want to be close to the West End for entertainment, shopping and so on. Yes, there are government restrictions on green belt development, and I can see a libertarian would want those gone - that would mean lower house prices in outer London, but if people are still looking to work in central London, they'll have long commutes too, so the prices will still stay high for areas with short commutes. But you don't need to change the whole tax system to do that.

The planning gestapo are the ones preventing development possibly at the behest of the aristocratic and monarchic interests. A Land tax and a scrapping of the Planning Acts, won't necessarily reduce the value of London properties to the same levels as rural Wales because of course some of the London values derive from existing development and infrastructure but it will bring them down to rational levels as well as enable those trapped in the urban blight to move to greener pastures. Not everyone wants to be a battery chicken or raise a family in a £2000 a week broom cupboard purely for the dubious benefit of being 2 mins walk from a dozen nightclubs.

A good basic principle of taxation is "take regular tax from those who can afford to pay regular tax". This means they will still be able to pay the taxes again next time. A progressive income tax is the best way of following this principle.

Sure every mugger thinking of future spoils will agree with this. However I am suggesting a more moral and creative framework than the current self-licensed theft orgy as practiced by the Whitehall mobsters. Try remember human beings are human beings not the farm animals of knuckle-dragging bureaucrats.

Voluntary maintenance of the roads? Do you seriously think that would happen? Yeah, you'd end up with toll roads, and an immense (though private) bureaucracy for collecting the tolls - complete with intrusive monitoring of car movements (unless you fancied stopping every few hundred yards to pay cash). And you're worried about 'snoopery' of whether land use is agricultural?

I understand why you are pessimistic that people and businesses would not willingly contribute to the maintenance of utilities such as roads that they all use but you are still thinking in terms of the old way. For a hundred years British people have been mindfucked by an enormous burden of tax and regulation to the point where they have little or no initiative left and precious little human spirit. Their humanity hasn't been totally extinguished though and it will recover promptly when the tyranny of the bureaucrats is lifted. If they don't step up to the new opportunity and the roads get neglected (even more than the bureaucrats already neglect them) then they will have no-one to blame but themselves if entrepreneurs step in and make them toll roads. Actually there are probably ways of making roads a viable commercial concern and still be free at the point of use. Commercial TV is already provided gratis at the point of use as the revenues are generated through advertising. Possibly a new road surface might be developed that generates electricity from the moving weight of automobiles, such a road could be provided to road users for free as they generate saleable energy from their usage.

Technology - Given how simple this tax is, there probably would be little lost benefit in adding a certain amount of complexity for the sake of producing a closer mutual benefit for the miltary and those they defend. Region specific fees is good suggestion. I imagine that each region, through suitable delegates, could negotiate a tailor-made defence package with the military. Relatively poor but unlikely to be bombed or invaded regions like Wales might forego paying for the British Army and Navy and just pay for minimal Air Defence and meet Infantry needs through their own militias. Other regions like Gilbraltar that are wealthy, but in some danger of blockade or invasion by larger neighbours might be willing to pay more for an enhanced navy and airforce presence.

[Technology]

Is it possible to combine this Land Area Tax with the idea behind the Negative Income Tax, so we get the "negative" mechanism on the land tax, being effectively progressive, and subsidizing those with smaller lands?

[AFAIK]

Just to throw out some figures. The yearly military spending in the UK is currently around 40 billion GBP. This is very high, the UK is one of the bigger defence spenders. But even with this high spending how would it work out in terms of a land tax? The total land area of the UK is around 245000 square km.
40 bill / 245000 / 1000000 = 16 pence per square meter per year.

If we outlaw wars of aggression and scrap Trident that number will fall dramatically.

Would you be open to charging different rates for different categories?
City, town and country for example?

What if owners of larger areas of land commission private militia's, can they acquire an exemption from the tax?
What if a community wishes to secede and forms a people's militia or private militia?

How many people will take an interest in the budget if it costs them a few pounds a year?
Will those who own no land be allowed to vote?

Will there be any embassies or consulates to assist overseas residents or travelers?

[slybaldguy]

Prosthetic Conscience is right; for a LVT to work it has to be based on the market value. This would attract business to where land is least expensive(i.e former industrial heartlands, ex mining communities etc) without the need to build on greenbelt land. The reason land in London is so expensive is due to high levels of public infrastructure spending. The kind of pure libertarianism advocated by taxizen is utterly fanciful.

[SolarCross]

Is it possible to combine this Land Area Tax with the idea behind the Negative Income Tax, so we get the "negative" mechanism on the land tax, being effectively progressive, and subsidizing those with smaller lands?

I don't think that would be desirable. The idea is to encourage land owners to use their land productively or give up that ownership either to nature or to others that will use it productively, to discourage land hoarding. Whether an owner's land is large or small is not relevant.

AFAIK - I don't see a need to outlaw wars of aggression or trident, or rather that is the wrong approach. Under this scheme the military has full discretion as to what military gear they keep and how they deploy it however their budget must be approved directly by those that pay for it and also I should mention they will have no immunity to prosecution for any death or damage for which they are responsible. Wars of aggression are very expensive compared to defensive, deterrent or peacekeeping roles and so without needing to prohibit them, the military will have a clear incentive to avoid such actions in order to avoid blowing their budget and then finding that those who pay them refusing to approve an enlarged budget not least because they disapprove of how it being spent. Incentives always work better than prohibitions.

Different rates. - Maybe, presumably you are thinking higher rates for cities? With land being freed up from the aristocratic estates, market dynamics are such that land values in cities will tend to drop. Some will feel that as a loss, the compensation for that is vanishingly low taxes. If they are paying higher land taxes in the cities as well as losing land values then that will only increase the flight from the cities and steepen the drop in land values in the cities. The point is that it is better to keep things simple and carefully consider the consequences of changes and complications.

Private militias - At some later point that may be possible however the military are not going to like it. Not just because it means lower revenues for them but also because they are a highly organised professional organisation and private militias in their midst will be "loose cannons". They won't want to use them and they will be always a little unsure who's side they will be on. Private militias are a complication that will have no upside for the military only downsides.

Those who only pay a piffling amount of course have an entirely rational reason to not care a hoot about whether it is the "right" amount or not. I don't see any harm in that. Lucky for them they have one less thing to worry about.
Non-owners don't have to pay and so they don't vote. Should you decide how much people should pay for an automobile if you are a cyclist? If you are a tenant on the land of someone who is a payer then whether you get a say in approving the budget or not will be between you and the owner by negotiation, but I don't think many will bother to ask for it. Why should they care?

Embassies and Consulates - such institutions are utterly useless; they only serve to give bureaucrats another opportunity to cause mischief and shakedown people for cash. That said such things will probably need to be maintained to some extent if only because in order to get past the bureaucrats of other countries people will still need at least a passport. Travel insurance does much more for trouble struck travellers than any consulate ever has.

Slybaldguy - Market values are changable and subjective, moreover land (or anything) strictly speaking doesn't have a market value until a buyer and seller agree a price at a particular time. Land sometimes remains off the market for long periods of time even centuries and so its value is pure guess work. It is better to charge on the basis of unambiguous, measurable objective data such as land area. Another thing is that the land tax will encourage more land to the market and the artificially high city values to drop. If city values are also taxed higher this will only steepen the value drop. A property value crash is inevitable at some point and needs to happen but we should be careful about not making it anymore dramatic than it needs to be.

[slybaldguy]

I like the countryside as it is thanks very much. Value the land based on prices paid for similar land in that area. If the landowner doesn't like it tough.

[Technology]

I don't think that would be desirable. The idea is to encourage land owners to use their land productively or give up that ownership either to nature or to others that will use it productively, to discourage land hoarding. Whether an owner's land is large or small is not relevant.

I just feel that poor people having to pay tax on their small holdings of land would infringe the liberty of too many people. A progressive system for this would infringe the liberty of less people, and with less effect for those individuals, as they can pay more being richer.

[Eran]

In the context of a radical change to the system, why not simply confiscate aristocratic land tracts?

The criteria I would use are:
1. Land owned by a person who isn't actually using it, i.e. it is rented out, typically on a very-long-term-basis
2. Where the owner cannot demonstrate that the land was purchased using legitimately-earned funds

There may be grey areas (lands purchased 300 years ago from the proceeds of slave-run Caribbean plantations, say) but most aristocratic lands would be captured by these criteria, and transferred, free of charge, to their current users.


I agree with previous writers that taxing land equally, without regard to value, would introduce grave distortions into the national economy. Basically, it would make land ownership uneconomic in marginal areas, creating waste as valuable economic resources lie fallow.

The least distorting tax is generally agreed to be Land Value Tax (LVT), based on the value of unimproved land. It does introduce some bureaucracy associated with assessment/valuation, admittedly, but, in the grand scheme of things, a relatively minor problem.

In the context of having the tax pay for defence, a tax proportionate with value makes perfect sense. After all, the enemy (who exactly is it?) is much less likely to attack a rural sheep farm in the Scottish highlands than central London.


As for roads, I agree that most roads must remain open to the public. However, today, using those roads already is associated with a mandatory payment, namely road and petrol taxes. Thus charging a modest fee for using all roads, used to pay for their maintenance, doesn't seem onerous. What I envision is a two-tier system, with cheap roads being owned by public trusts, with actual users having a say in their operation (perhaps based on one-mile-one-vote system for selecting boards), and a parallel (and, over time, dominant) system of privately-owned roads.

As for the military, I think elections should be competitive. Different organisations would submit bids to run the national defence. Each proposal would contractually bind the winner in terms of both budget (payment for services) and a plan that includes size and composition of forces, readiness criteria, etc.

The bidding would be for the equivalent of today's civilian oversight, rather than for the entire force. Thus the same soldiers would be serving under whoever is selected by the nation to run the armed forces.

Naturally, voting rights should be proportionate to amount of tax paid, however that is apportioned.

[SolarCross]

Technology - small holdings are not necessarily poor holdings. The optimum productive size of a holding is not necessarily the bigger the better; there may be economies of scale but there are also dis-economies of scale. Regardless I don't like "progressive" taxes; I don't think people should be punished for being productive or relatively rewarded for being unproductive. Flat taxes or fees proportional to use are better as they do not discourage improving productivity.

Eran

Confiscation or tax - Confiscation might do the same job but would be harder to sell as a legitimate way to do it. Also by simply asking land owners to pay their fair share for the defence of the realm you are encouraging the land owners to rationalise their own holdings and to downsize at their own discretion and to downsize somewhat gradually, this will lead to less opposition and a more gradual freeing up of land that will upset the land market less. The current crop of aristos mostly have merely inherited land stolen in previous centuries and so it isn't really appropriate to treat them like thieves.

LVT - I do see the argument for LVT, but I wonder what do think of the possibility that such a tax will not more strongly cause a drop in urban land values and more strongly encourage a flight out of the cities? Would there not be a feedback effect as more land becomes available outside urban areas and at lower tax rates (as the large unproductive vanity estates are sold off to avoid paying tax), then urban values drop whilst still being liable to higher taxes, so people who can more readily move out of the cities sell not just to avoid depreaciation but also higher taxes thus furthering the downward pressure on urban values (more sellers than buyers) and in turn pushing more people to sell out of the cities and buy into the rural property?
Put another way LVT does make more sense than LAT (land area tax) in the context of an undistorted market, but the UK doesn't have an undistorted land market, just the opposite. Rural prices are relatively down not because no one wants them but because no one is allowed to do anything with them and city values are not high because everyone wants to live in the city but because those areas are the only areas anyone is allowed to develop. If that bureaucratic imposition is removed then rural values will tend to rise and city values tend to drop. In this phase LVT will exaggerate the value of rural land as not only will it be more available but it will also be cheaper to tax and also LVT will exaggerate the relative unattractiveness of city land as not only will it be depreaciating, yet still expensive, it will also be more expensive to tax.
I suggest LAT will mitigate that effect somewhat. Once land values have found equilibrium then converting to a LVT will make sense. Does it make sense to tax based on market values if those values are heavily distorted?