HOUSE OF COMMONS SEMINAR ON LAND VALUE TAXATION, TUESDAY 24TH MARCH 2009
Chaired by Nick Ross
Panel of Speakers:
– David Triggs, Executive Chair of the Henry George Foundation
– Iain McLean, Professor of Politics, University of Oxford
– Ashley Seager, Economics correspondent, The Guardian
– Samuel Brittan, Economics commentator, FT, author
– Molly Scott Cato, Economics speaker for the Green Party
* Fred Harrison, Executive Director of the Land Research Trust and leading author
– John Lipetz, CEJ Chair. To sum up the seminar
* Author of Boom Bust: House Prices, Banking and the Depression of 2010.
The Coalition for Economic Justice – a recently formed grouping of concerned organisations across the political spectrum– believes that the private appropriation of community-created site values is lethal in its effect on our economic arrangements, dooming every economic upswing to an ultimate collapse.
To end this cycle of boom and bust it is vital that the Government has some control over the level of property prices. Land value taxation would give it that control. The tax thus raised would not be additional Government revenue but would be matched by an equal and offsetting reduction in those taxes which bear directly on labour and enterprise, such as, income tax and corporation tax. This would give a much needed stimulus to economic activity while curbing the unjust and unearned enrichment from property speculation.
The seminar is aimed at parliamentarians and policymakers, with the objective of forming an All Party Parliamentary Group to consider how this situation may be rectified and a land value tax introduced.
The American embassy in Grosvenor Square was recently sold for £500 million. As the price agreed was on the assumption that the building would be demolished, the entire price reflected the site value alone.
The intrinsic value of the 2-acre site is negligible – as agricultural land it would fetch no more than £10,000. All this site value therefore arises from external, community-derived factors, such as, the density of population at the heart of the nation’s capital and London’s unrivalled communication and infrastructure network. It is wrong that the site owner should reap this benefit; it arises from the community and is paid for through taxes. It should be returned to the community.
In most property transactions the site value element is not disclosed but is highly significant. It is the site value, not the perishable bricks and mortar, which is the driving force behind property prices, pushing them up to ever higher and unsustainable levels. These inflated property prices and the ballooning credit that supports them eventually implode with, as now, catastrophic consequences for the economy. An unsustainable property boom and its subsequent collapse has been at the heart of virtually every economic crisis since the Second World War.
With site values taxed, property would lose its speculative appeal and housing would once again become affordable. The mountain of credit thus released would be used to finance business and trade. The message from this shift in the tax burden from production on to property would
be: wealth comes from work, not from sitting on a property.
For further information contact
John Lipetz, 020 7794 5343, email@example.com Robin Smith, 07786 078836, firstname.lastname@example.org Dave Wetzel, 07715322926, email@example.com Tony Vickers, 07950202640, firstname.lastname@example.org