Friday, April 09, 2010

Duke of Westminster & Land Tax

Hard on the heels of Michael Hudson in the FT yesterday comes Philippe Legrain 'Tax land...but not hard work'. In the context of UK 6 May election issues, whilst he agrees with Tory opposition to National Insurance increases as a 'tax on jobs' he sides with both Labour and Lib-Dems in questioning the Tories' claim that 'efficiency savings' will fill the revenue gap caused by dropping the NI increase.  The parties do seem to be going round in circles on this one. So are we left with the thoroughly negative NI increase as the only way? 

Legrain comes up with options in line with Free Lunch principles. He proposes a levy on carbon emissions at £10 a tonne to raise the £5.6bn needed. Whilst this is a complex issue (see Wikipedia) and the carbon-reducing effectiveness is variable, it is better to levy a tax on the use of natural resources like carbon, rather than taxing human effort. But his proposal to tax land values has great clarity and justice. He tells of the Duke of Westminster's family - the Grosvenors - owning 300 acres of fields that became Belgravia and Mayfair. These 'fields' are now valued at £6.5bn, only because talented and industrious people flocked to London over three centuries and generated the Grosvenor's windfall as they needed places to live and work.  Tax that windfall gain and not work, says Legrain.

Legrain's website for 8 April has a YouTube piece on immigration which brings some clarity to that issue. Here again Legrain cuts across the confusing election-babble as he blows away the fog generated by party positioning. 

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