citizens income

Over at Lib Dem Voice they've printed a biographical piece from the Directory of Liberal Thought about Henry George, the leading proponent of the "single tax" in the nineteenth century that many of us know nowadays as "Land Value Tax" or "Site Value Rating". Several of the correspondents in the discussion following the article felt that they had never really understood, or had explained clearly and convincingly, what LVT is and why it is such a good thing. So I'll give it a go, though many have tried before me, and no doubt many of them more intelligibly.

Land.

Forget what you might think you know about land. In economic terms land refers to the third factor of production. If "labour" is the work that goes into something, "capital" the wealth invested or expended in producing more wealth then "land", in economic terms, is everything else - "the entire material universe not produced by the application of capital and labour." So yes, it includes the land underneath our feet, but it also includes the air, the electromagnetic spectrum, the cosmos, the mineral wealth of the planet, all in their natural states, natural fertility, self-seeded trees and plants, water and fish and non-domestic animals and so on.

Now, billions that we humans number, for most purposes most of these types of land are either unlimited or of indefinite supply. Some types we don't absolutely need to survive. Others we do need to survive. Others are fixed or limited in supply. As far as I am aware, we are pretty well attached to this planet. Every single human born so far has only had the resources of this one planet to sustain them. And since we need it to survive, then we must all, every one of us, have an equal claim on its natural bounties.

In early human society, hunter gatherer family units or tribes would simply range over as big a territory as necessary to meet their nutritional needs. For some, in fertile temperate parts of the world, this may have been a small area.  For others, in less fertile territory, it might be a large area of rough foraging. But of course this sort of isolation, subsistence living, is not very conducive to human development. Through trade we grow, both as individuals and as communities. And as soon as we come together to trade certain locations become more important as places where people meet and we can no longer justly grab as much space as we want without excluding others. It is at this point that land begins to have...

Value.

The value of "land" is its "rent". Just as the cost of "labour" is "wages" and the cost of "capital" is "interest". When natural resources (land) are in infinite supply, so that anyone who wants to use some of it can just take it and there will still be plenty for everyone else, it has no rental value. But as soon as humans get together in clusters, the further we move away from being a agricultural based economy and as our survival is based more on our ability to sell our specialist labour for enough to sustain us those locations where we form our clusters begin to attract rent, because many people are in the scramble to be in the best location for their market.

A landowner might be able to make more efficient use of his location and fit more people onto a particular piece of land, or they might invest in creating a work of art for the discerning occupier who will pay a premium for quality. But the landowner, as a landowner, does not have to lift a finger to contribute to any change in the rental value of that location.

And when we buy our homes, what we are doing is rolling up all the location rent for a number of years and handing it over, together with the capital value of the buildings at that location, to the previous landowner, and usually borrowing to do so. This is a key concept in LVT - we are already paying this rent either monthly when we actually rent, or up front when we buy (but inflated often by the cost of borrowing to afford it). It is this "rent" value that Land Value Tax seeks to...

Tax.

To me, this is a big misnomer, and causes a deal of confusion about LVT even amongst "Land Value Taxers". The Georgist purist like me intends really for the community to share the rent for the locations that are made valuable by that whole community equally with everyone in that community. Shared equally because, remember, we have that equal right of access to the land as our birthright as creatures tied to it for the very stuff of life, and because we all help to create that overall rent value. We more commonly think of a "tax" as an imposition used to fund government spending. The community sharing of rent is really a way of each and every one of us paying everyone else who has just as much right to make as good use of our location as we do for the inconvenience of having to avoid it because we have exclusive rights to it.

The community in question is the area within which land has rental value - technically speaking "within the margin of production". In some cases that may still be just a single town or city - the desert outside Phoenix, Arizona, for example might well tail off to zero in rental value at the end of the irrigation system pipes. In others, it could be an entire country - for example it could be argued that we are such a small country that London creates some rental value almost everywhere in the country.

The effect of this rent sharing is that those in that geographical community, however big it is, whose productivity - ability to earn - means they can only afford to live in the cheapest locations with the lowest rents will get more, perhaps much more, than they pay out in location rent. Those whose ability to earn enables them to commandeer the best locations will be paying into the community rent fund much more than they get out. And the net effect of all that is that we create an automatic, self-adjusting safety net which, if you have nothing else coming in, should enable you to eke out a basic living on the most marginal, cheapest locations.

Of course many of you reading this actually do believe that government is sometimes the best body to deliver "essential" "public" "services" and will recoil from the idea of giving people a basic income for fear it becomes an invitation to idleness. That's fine. For you, the Land Value Tax would be a way of financing those public services. I will tend to try to persuade you to take that one further step and believe that giving people their money to spend for themselves will lead to better and more efficient services in most circumstances.

The single tax.

Now this is the other side of the equation. Nobody who is serious about LVT's benefits wants to add to the current tax bill. LVT must replace other taxes if it is to achieve its most important benefits - of freeing up labour and capital to invest and work in productive wealth creation. And so Henry George called it the "Single Tax" and his adherents were called "Single Taxers". Henry George reasoned that virtually all other forms of taxation constituted tariffs, and therefore barriers to wealth creating free trade. All except tax on land in the generic economic sense affect the resources that can be applied to productive enterprise - labour, capital and, in the end, consumer spending.

And remember, the best thing about all this is that most of us, that is everyone who is still paying a mortgage or anyone who rents anyway from a landlord, are already paying this "single tax" in the form of location rent to our landlord or previous landowner, who have done nothing as landowners to earn that bit of the rent. So reductions in any of these other taxes, such as employers National Insurance, Income Taxes, VAT and capital taxes, feed straight through into more money in our pockets. And not only that, but all the disincentives to work and creating employment created by our complex income tax system and the problems associated with benefits withdrawal rates and tax credits and so on, will be removed.

Nor must you believe that the "Single Tax" only refers to a tax on the rental value of one type of land. There are other finite natural resources that we can rightly claim belong equally to all of us but which attract an economic rental value because they are scarce amongst a given community of users. One can argue for a "Land Value Tax" on the exclusive right to transmit on particular frequencies in the electromagnetic spectrum. Or to fly through our airspace at a particular time and place. You could even describe some mechanisms for taxing polluters as a specialized "Land Value Tax" - though it may not be the best way to deal with such issues.

Common Objections:

"We've already been taxed on the money we bought our home with"

Actually, you've been taxed on what you have paid your rent with - whether you actually rented, or bought from the previous owner by paying over several years' rent up front. Any rise(or fall) in your property's rental value by the time you come to sell it on is mostly accounted for by changes in the location rent, to which you have not actually contributed, as a landowner anyway.

But think of it in a post-LVT world - you'll have paid substantially less for your home, you'll have borrowed substantially less to do so, and you will not be paying all those unproductive taxes on income and capital anyway.

We have plenty of "double taxation" in our current system anyway. I pay tax on my income, but then when I go out and spend my post-tax income on most most goods and services I will pay VAT at another 17.5% and possibly duties. And this is an ongoing double taxation - at least with LVT we're only talking about this effect being felt once - at the implementation date and then not again because all the other taxes will have been ended.

"Land rich, income poor - the "poor widow bogey""

As long ago as 1909 Winston Churchill used to be taunted by the Tories with what he called the "poor widow bogey" - the supposedly unbeatable argument that LVT would be wrong because people who happen to have seen the rental value of their location rise will have to pay more in location rent without necessarily having more income with which to do so.

First, again, think of it in a post-LVT world - you will have borrowed substantially less to acquire the various places you will have lived in your life and you will be paying, if you are efficient in your use of land at least, less in tax in the form of location rent. You will have more to save and invest in productive assets other than housing. If you choose to save for your retirement an amount that allows you to continue paying your location rent till you drop, fair play to you. But the evidence is in fact that there is a huge unmet demand for people downsizing nearing retirement (indeed it is mostly the best off pensioners who are able to do this at present). LVT, because it makes the market in land and locations much more reactive to community change, will more than likely encourage this need to be met.

But in the implementation there is some evidence that a very small proportion of pensioners would indeed face larger bills than they have at the moment. For those Land Value Taxers who would prefer to implement LVT slowly, increasing the rate of the tax over a long period of time, their answer would be to allow such people to roll up their tax bill until they do eventually sell up and move or for their estate to pay. I, preferring the big bang approach, would simply compensate people for the lost land value in bonds which they can use to pay their tax into the future.

"Confiscating the value of our biggest asset"

It is true that implementing the full rent sharing I outline above will wipe out the capitalized rent values that one is accustomed to seeing as part of the "sale price". And it is also true that this will hurt those most recently on the ladder and having just borrowed to pay for that up-front location rent.

But the home you live in is not really "wealth" in the conventional sense. Until you are at the stage of downsizing or selling up completely, the value of your home really only matters in respect of its relationship to the price of your next one. For most of us, for most of our lives, our shelter is a cost of living - either in rent or mortgage payments. And if we have slashed the cost of buying by removing the land value, then we have also slashed the cost of your next home in similar proportion.

Again though, in transition from one system to another, with my big bang approach, those who lose out can be compensated with bonds with which, for example, they could pay off any outstanding mortgage over the new land-free market value. If you take the slower incremental implementation mechanism, again, the loss will be less all at once; indeed you could structure implementation such that it effectively only capture future rises in rental values.

"Impossible to value"

This is the "experts' objection" that it will be too cumbersome to invent a system that values the rent for each plot of land every year. And more than that, that it will be arbitrary. But we know from evidence in on the ground pilot studies that we only actually have to value about one in ten plots that share common characteristics in the form of access to services and infrastructure say. It's also not really too different from the current system of self-assessed income taxes. A game is played out every year with taxpayers trying to minimize their liability and the HMRC trying to catch people out hiding some of their income. And here there is no market to help.

The average mortgage lasts eight years. That means that somewhere around 12.5% of our owner occupied housing is valued every year just to get a mortgage valuation. More in recent years where people have been encouraged to chop and change their mortgage even though they are not moving home.

And then there's the rental market. There will always remain benefits to renting for some in the population - short term workers and so on. So there will remain a rental market. This presents yet more, and really very accurate, evidence on which to base valuations- more accurate once you take away the capital gains aspect of land ownership as landlords will only be investing in a rental stream.

And ultimately the market will still highlight areas where the assessed location rents are higher or lower than investors think they should be. If buyers think the current rents are too high, they are going to offer a discount on the capital value of the buildings themselves and if assessed rents are adjudged too low by the market, buyers will offer a premium over the building values in order to get the more desirable location at a lower location rent until the location rent is adjusted the next year.

And finally, let's not pretend that this is new - we had Schedule A imputed rent on our homes on our tax returns until 1963.

"Concreting over surburbia"

There is often concern that when Land Value Taxers talk about our system leading to more efficient land use we mean that every available inch of land will be developed. There is no reason to think this in reality. It will first bring into use completely unused land - that mouldering old factory that's been sitting empty and becoming more and more of an eyesore for a decade for example.

But there's no reason why Land Value Tax would not be subject to a similar planning regime as now. It would change - because a community decision that they would prefer housing to a factory on a particular site for example will lead to that factory being redeveloped a deal sooner than it might today, because its owners are going to be seeing their location rents rise to the point that running a factory there would be inefficient compared with developing it for housing, say.

Personally I would also like to see many planning controls repealed anyway and have most (ie small scale) developments make their peace privately with its neighbours through mediation rather than state control.

Overall though, there is little evidence that people would suddenly settle for a squashed apartment instead of a suburban semi with garden and garage just because of LVT. It will encourage people to consider whether their continuing use of a particular location is cost effective for them and it will make the market more efficient and so there is likely to be more rebuilding, but that doesn't need to be at the expense of amenity.

In conclusion

So, there then was my now not so concise explanation of Land Value Tax and some brief responses to some of its most common objections. It is quite important to get across just how land gains its value though. That helps to explain why some of us see LVT as such a just and equitable way of doing things. If we had Star Trek style free instant transportation systems, land would again be worthless but while it take time (which is money opportunity lost) and money itself to get from A to B the land in between A and B is absorbing some of your hard earned income (and that of everyone else who has to pass it by every day) for doing precisely nothing.

Land values are effectively a tax on all production and one we already pay anyway. Getting rid of all those other taxes on production and capturing for the community the rental values of land will create such a different more equitable economic playing field on which we all continue to ply our various trades.

One of the most common points of disagreement between, let's call them "state-interventionists" and "non-interventionists", is the claim that "non-interventionism" would leave the poorest in society on the scrap heap with no welfare, no support. That the much vaunted idea of "non-interventionists" that "private charity" or "voluntary co-operation" would take the place of state welfare is just an impossible pipe dream. So determinedly do "state-interventionists" believe their own claims that they frequently castigate "non-interventionists" as heartless uncaring selfish individualists who would rather see others die than pay taxes. One quote from a Lib Dem Voice "discussion" just today will give you the general idea:

"Well none of them [Libertarians] are serious, because it an incoherent philosophy....send the kids back down the mines, it’s only a lifestyle choice."

And to an extent, I used to believe that propaganda. As a geo-libertarian of course I do have an answer of sorts - the basic income derived from land user fees (which would on their own create an almost unimaginably more equitable society in any case) would cover the basics of life for everyone, and give everyone an incentive to top it up with as much or as little work as they can manage.

But a recent discussion on a "non-interventionist" mailing list I've been frequenting recently has challenged the basic assumption of this debate for me. Would people really not contribute voluntarily to the upkeep of others if you don't have a government apparatus threatening them with the confiscation of their property and ultimately the loss of their freedom unless they pay their taxes?

It is a strange proposition. Governments for at least the last sixty years have been supporters at some level or another of some form of state welfare. They may argue about how much is appropriate but the fact is, people have overwhelmingly voted for a state that takes money from you in order to give some of what's yours to someone deemed "less fortunate". We even have a cliche about the inevitability of death, and taxes.

We have tens, maybe hundreds of thousands of people who do voluntarily give up their time to care for another. Most people are someone's relative, someone's friend, someone's colleague. And whilst I recognize that some do not have such support networks and would still require some form of collective support, most people do not want to see their friends and relatives on skid row or worse.

One has to wonder whether the interventionist route actually makes things worse. And in how many ways. When we look at our pay packets do we not think often that we've given quite enough for the support of others through our taxes thank you very much. National Insurance and Income Tax between them effectively make the worker near forty per cent worse off. I know what I would do with an extra forty per cent each month. It would pay the interest bill on the piece of land we have just acquired for our first Community Land Trust for a start.

Other taxes and protectionist policies keep the prices we pay for basics artificially high and create incentives for companies to produce cash cows rather than exciting developments. I'll bet if we didn't guarantee one pharmaceutical company a contract for however many millions of doses of Metformin diabetes pills every year a dozen others would have put the effort in to find a cure, not a chronic treatment regime.

The attempt to do welfare as a "universal" system, with the same rules for everyone, means a bloated bureaucracy enforcing inflexible regulations. If welfare were, say, to be dealt with at the parish level, and the barriers to job creation caused by taxes eradicated, I'll bet you more people would be found some work, appropriate to their abilities, even if it didn't give them everything they need and then people would feel much better about helping them out with the rest - because they were trying to help themselves as best they could. We have no way of measuring that at a national level really.

We have a Professor here at Brookes, a chap called Steven King. His area is the History of Welfare mostly in the 18th and 19th centuries - probably the period which received wisdom says was the harshest environment if you were poor or hapless. But I was fascinated by a lecture he gave a couple of years ago on being elevated to the professoriate (you are elevated to that aren't you?). Apparently when parishes were responsible for pensions, those who actually got a pension - those whom their own peers and neighbours if you like knew had simply tried and been unable to support themselves (in common parlance I guess the "deserving poor") would get on average 75% of the average working wage for their area. For others there were varying levels of support down to a pretty basic safety net that was intended to be subsistence rather than comfortable for those they felt were "swinging the lead".

And then there's the problem of administrative costs. If I had an extra 40% in my pay packet and was going to give it away, I'd know that the people or organizations I was giving it to would get all of my donation. I'll bet for the 40% the state apparatus take off me in taxes, probably half actually gets to someone who needs it, to direct service delivery, if that.

So, given all those disadvantages of, and the singular advantage that people actually vote for, this tax based welfare system at some level or another, is it not just possible that by doing away with all that coercion, all that centralization, all that unproductive bureaucracy, the people who get to keep what they earn would be quite proud to "do the right thing" by their neighbours and communities? If they vote at the ballot box to have money taken off them by the state for things they obviously believe are necessary, would they suddenly feel they were not necessary or that they should not contribute towards those same things without the threats of the state?  Isn't that a totally illogical position?  You'd vote for it but not do it if the people you vote for didn't force you to do it?

And so, at the very least, would it not be at least a courtesy to accept that Libertarianism is an optimistic creed; that it is positive about humanity's innate ability and even need to help each other. You may call that a naive optimism. But I'd rather be a glass half full freedom lover than the glass half empty authoritarian approach that says humanity will not help itself unless it is forced to do so by the agents of a state apparatus that may, just may, cause more problems than it actually solves. Libertarian is not a "devil may care/beggar thy neighbour" philosophy but one that places the utmost faith in people, as individuals, to know and do what is right.

And as to whether it is a "coherent philosophy" or not, I submit that "non-interventionism" is the only truly coherent philosophy in the game. For once you admit the state can do one thing better than we can through voluntary co-operation, you inevitably end up in endless arguments between factions about just how much the state can do better, and the ultimate end of that arms race is totalitarianism - that the state can do everything better than voluntary co-operation. Which is manifestly not true.

Again, I'm starting a new post to respond to some very interesting comments by Tim Carpenter. My inept attempt at a Drupal template means it's almost possible to follow a thread of comments and especially given this is going to be another long response I think it deserves an airing on its own.

For anyone coming new to this debate, it follows on from my original "three point plan" for equity and economic justice and some clarifications and responses I gave yesterday to comments on that original by Tim Carpenter, Head of Policy at the Libertarian Party UK.

Tim, thanks for taking the time to respond. However I think we are, as a colleague used to say to me "talking past each one another". Paul Lockett has put it all a deal more eloquently than myself , and for that, and if I have caused any confusion, apologies.

I am a geo-libertarian (of the "geo-mutualist" variety if you will). The main thing you seem not to have appreciated is that in calling for the "Single Tax" I mean just that - the community/state can only take economic rent on the land resources within its jurisdiction and has no call on incomes or trade. As I understand it this is the "purist Georgist" position.

The ideal 'state' would be limited to collecting the rent and distributing it all as a dividend to citizens for the reasons Paul outlined. "Commonwealth" - you are right, it's lazy, I should put a space between "common" and "wealth"! Economic rent from the finite natural resources we all require to share is "common wealth" and should be collected as such and distributed as fully as possible whilst every other tax is a tariff.

Tim: "1. When I say who defines the value of your land, you say "why does anyone need to decide", yet immediately go on to talk about collecting the tax! Someone DOES decide the taxable value and that affects the actual value. Can you not see that?"

No, the market sets a location's value. It does it all the time at the moment. And it will continue to do so in an LVT system. Even in a "100% LVT" system. If a location is appreciating in value, buyers will be prepared to pay a premium over last year's rent bill and vice versa, in a falling market sellers will effectively have to be prepared to pay someone to take the rent bill off them. The following year's rent bill will reflect that premium or discount by going up or down respectively.

Tim: "2. As you should know, we aim to eradicate income tax., so the comparison does not hold."

See above - I'm a single taxer. No income tax here either. It is a tariff on employment and trade. Though I would say that if a local community decided mutually to have a local tax on incomes or sales to finance some mutually agreed local project it would be doing so in competition with neighbouring communities that perhaps were not or were charging a different rate or a different tax. Tax competition is good, in itself, isn't it? Also I am aware of some "single" taxers who would justify retaining some income tax at least temporarily in order to try to address the "embedded" historical advantages of monopoly ownership. I don't.

Tim: "The problem comes when some local area under the influence of whomsoever, adjusts taxation on land they wish to gain access to because a new development is coming. So, building a road, whack up the value of land next to it. Farmer has no CAPITAL to develop it, so has to sell it for a knock-down price because he HAS to sell to meet the tax bill. If this does not concentrate land into a few hands, I do no know what would. This is just one example of the potential risks."

This appears to be Churchill's "market gardener" bogey, or, to others, the "poor widow" bogey. If you look at it under the current system, that same farmer, in similar circumstances is perfectly able, regardless of the squalor growing around, to sit on that land, not paying anything and watch its value "ripen" until the value, created merely by excluding others from what they need to use, is so great it becomes irrational not to sell. That process is outright extortion.

In fact, under an LVT system, land values at the margin would tend to move much more incrementally in any case. In the absence of other restrictions - zoning, green belts etc (it is your policy to remove those restrictions once an LVT system proves practical isn't it?) - you would not get these large leaps in hope value. I would actually retain green belts and such like for a while after LVT was implemented so that it can have its greatest effect in turning existing urban land to its most efficient use before going for sprawl. But I am prepared to be convinced on that. After all, we know that at relatively low densities compared with what planning guidance seeks nowadays, it would take up less than three quarters of one per cent of the non urbanized land in England to build the three million new homes predicted to be necessary over the next twenty years.

But once a point of equilibrium was reached between supply and demand rents at the margins of production would move slowly and via the democratic influence of the market. If that market and the community that makes up its participants eventually get as far as that farmer's land and all that remains to bring it in from the margin to profitable development is to develop a road, the farmer will have had plenty of opportunity to see it coming long before the tax bill becomes an issue for him.

Tim: "3. Living costs - if you have CBI as described you would still keep the most expensive parts of the Welfare bureaucracy - the entire means-testing apparatus. Housing benefit would probably remain in all but name."

I disagree. But I don't think what you understand me to have described is what I think I have! ie, in particular, that I am not paying for CBI out of income taxes, but out of the community collected rent on economic land. Land at the margins tends as I said towards a nil value. More people will be able to own their home because they will not be borrowing twice as much as the value of the capital good (the building) in order to pay the land value in up front capital. Renting a basic home at the margins ought to be achievable out of the Citizens Income.

With so many pulled out of poverty anyway by not having punitive benefits withdrawal regimes that reduce the marginal value of doing even the smallest amount of paid work and by the reduced costs of living owing to tariff eradication and the better off keeping more of their own money, the capacity of private charity or local mutualism to assist the much smaller number of people that would be needing top up hand outs above their CBI would be much increased.

Tim: "4. Income. You need to clarify here - are you saying that COMPANIES have 40% more or that wage earners do? Be under no illusions, if you have CBI, income tax will be enormous. I worked out once that if we went for CBI with no other tax changes but a cull of QANGOs, income tax would need to be about 64% flat from the very first penny (IT is currently £140bln, 7k x 50m = £350bln pa). A HUGE disincentive to working especially at the lower end. Result: black economy, unproductive citizens, more companies shutting down and a growth in imports (and do not say "cheap imports make us richer" because that only holds if we are simultaneously exporting a greater amount of higher value exports)."

I hope you'll agree that that objection is moot given I am not talking about income taxes at all. My calculation of the CBI cost at £5200 pa for adults and a decreasing proportion for under-18s to 20% for 2 year olds is around £285bn. £245bn if only the adults. I reckon there was about £200bn a year's worth of economic rent in residential land alone at the recent peak of the market. I don't think it is beyond belief that there's another £85bn in commercial, industrial, retail and, possibly, agricultural economic rents.

Tim: "5. Movement to low tax areas: A company will consider workforce supply as a prime consideration, not just rental costs. If that were not the case, expensive London would be empty. People pay top dollar for London rents because of a massive pool of labour - they can gain access to many cheap or more chance of snaring the best. To think LVT would make a company move out to a depressed area? Those places are already cheap. Why doesn't it happen now? Limited skilled labour pool. As you say the Government does it now and did it in the past (remember the Hillman Imp?) and it creates quasi-soviets. If LVT has an influence, it might IMHO move a few companies, deter some from even setting up where they need to and the rest of the companies will be bled paying higher rates just to keep near the labour pool they require. In the case of London, the move will be to New York or Hong Kong and we all lose out."

There are so many issues in this paragraph I can only assume again that I have failed adequately to have explained my position. At the moment businesses pay rents, yes? In an LVT system they will still pay rents. The only difference is that whereas currently the entire rent, that which accrues to both the building and the site or location goes to the current landowner, ie it is enclosed, privatized. Under an LVT system, the same rent is due (assuming they were paying the market rent originally), only the portion of it that accrues to the location goes to the community and that attributable to the building to the building owner. There's no corporation taxes, no more employee taxes. There's no increasing of rent or rates; there's no bleeding anyone. Except those, as landowners, who have bled the rest of us for centuries.

Areas of low land value will also be areas in which it is cheaper for employees to live (lower LVT for them too). For a business operating at the edge of profit it would seem to me to be quite an attractive move. But one that remains in London because their key skills are there is not penalised by that. Indeed, if sufficient other businesses do it who do not need to be in London for optimal profitability do move, costs will also likely fall for those left behind, increasing their profit, distributable to capital and labour.

I think there is, in particular, one form of LVT that could have a significant effect in this regard...the auctioning of air-space, via "landing slots" at airports. Making more efficient use of regional airports would draw business into those areas. I'm likely to propose this to our regional conference this autumn as part of an "anti third runway at Heathrow" motion. Interesting choices of examples though - Hong Kong of course is famous for having state owned land - everything except the Anglican Cathedral is leasehold and that has been used to raise revenue in a form of LVT and keep income taxes low. Modern valuation tracking and billing systems would make that far more efficient and not prone to some of the problems Hong Kong suffered by having too infrequent valuations.

In China before Mao took over, I understand that Chiang Kai Chek's regime looked into LVT as a way of staving off the rise of Mao's totalitarian collectivism. And in the former Soviet Union, Gorbachev I believe looked into LVT as a way of capturing the value of natural resources and in not implementing it allowed the so called "oligarchs" (really "kleptocrats" in my opinion) to enclose the revenue from that vast pool of common wealth.

I'm getting a bit tired here! I'm going to call it quite at this point and maybe think some more about the issue of mutualism. I think Paul answered the point about the "state as landlord" objections quite satisfactorily and there's no need for me to repeat it. But for fairness, other readers can read Tim's further points in the comments on the previous post.

Tim: "p.s. your page has a script that my browser asks me to kill due to risk of resource hogging."

Yes - I only notice this on older machines or slower network connections - I never experience the problem at home or at work. I think it must have been an advertising panel I have just removed, but if others still experience the problem let me know and I'll have another look.

In my last post I set out what I considered to be the three necessary reforms to create a more equitable society - Land Value Tax (or "The Single Tax"), Citizen's Income and Ownership for All.

In the comments, Tim Carpenter, Head of Policy at the Libertarian Party UK had several objections that I would like to address:

Tim: "LVT can seem fine and dandy at the first off, but over time who decides the future value of your land?"