Money For Nothing & Your Cheques For Free, & A Little About Land Value Tax

Sir Roger De Haan owns a sprawling 1500 acre farm called Horton Park Farm . In the map below it is the area marked in red.

According to the latest figures available from DEFRA, Sir Roger (pictured) has received £253,585.42 or 74% of taxpayer funded subsidy in the form of ‘single area payments‘, calculated by land area – that is to say, payment simply for the privilege of owning land, rather than growing food or performing an environmental or social service (beyond the basics of cross compliance), yet the charities of which he is a trustee, had issues with paying their council tax

Of course Sir Roger is not the only wellie wearing farmer who receives these taxpayer subsidies. William Pleydell-Bouverie, or the 9th Earl of Radnor as we know him here in Folkestone, was handed £453,618.76 in 2014 to pay for the upkeep of the ancestral seat Longford Castle (pictured below), near Salisbury in Wiltshire.

The estate, which boasts a multi-million pound art collection featuring paintings by a number of classical masters, is administered by a private company called Longford Farms Limited of which the Earl is a director.

Also 24 non-Royal Dukes receive large annual farm subsidies for the lands they own. In 2015, these summed to £8.4million, paid to the Dukes directly or to trusts, companies and entities controlled by them.

All of this money of course comes from the EU Common Agricultural Budget, which accounts for roughly 40% of the EU budget, or 42bn a year.

Anyway what’s our point? Well, we think it is time to introduce a land value tax, (LVT).

It might sound extremely left wing, but the granddaddy of rightwing economists, Milton Friedman, described it as the the least bad tax. Other economists like it too. David Ricardo  termed unearned income from land as a pernicious anomaly: “that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil”. Adam Smith said “nothing could be more reasonable”; and Winston Churchill said scornfully that a landlord “contributes nothing to the process from which his own enrichment is derived.”. Those who own the land skim wealth from everyone else, without exertion or enterprise. They “levy a toll upon all other forms of wealth and every form of industry.” Land value tax recoups this toll.

Most taxes tend to depress economic activity; they also displace it – for example offshore financial centres . The faster that tax collectors crack down on loopholes, the more clever accountants find new ones

Land-value taxes, on the other hand, lack these perverse effects. They cannot reduce the supply of land, or distort decision-making. Instead they may even stimulate economic activity, by penalising those who hoard land and keep it idle (a big plus in desolate post-industrial cities where much land is vacant). The tax drives the land price down by the capitalised value of the future levies—theoretically even to zero—until someone finds a use for the land. Collection is cheap. Unlike profit, you cannot massage land away or move it to Luxembourg , or the British Virgin Islands. If you do not pay, it can be seized and sold. Though nobody likes extra taxes, new land-value levies could be matched by cuts in other taxes, especially those paid by poorer people, eg those earning less than £80,000 for example.

Rich people tend to own a lot of land, poor people very little. For that reason it wins favour with economists who worry about inequality, such as the Nobel-prize winner Joseph Stiglitz. He argued in a recent paper that land and housing, rather than the distribution of income and productive capital, are the key to a fairer economy. When public investment improves the value of a site—for example by building a new road nearby—the benefit comes back to the community in the form of higher tax receipts, rather than ending up as a windfall in the pockets of the owners. Taxing the unearned income that landowners enjoy should curb the boom and bust cycle in land prices.

Of course like any tax it is fine in theory, but LVT is not without its problems, but it is “the least bad tax” of them all which redistributes wealth. All parties who are serious about helping the Just About Managing (JAMs) would do well to consider it, because at the moment the current Government denounce the transfer of public money from rich to poor, however they are intensely relaxed about the transfer of public money from poor to rich.

On June the 8th we will be voting for Martin Whybrow (pictured) of the Shepway Green Party, as we do not want to surrender this corner of Kent, or our country, to the unmolested control of people prepared to rip up every variety of public spending and public protection except those that serve their own class; in our humble opinion, such as our own local philanthropist Sir Roger De Haan, the Earl of Radnor or those 24 non-royal Dukes and their ilk.

Shepwayvox Team.

We do not intend to suggest or imply that any named person receiving EU subsidies has in anyway broken the law. They are entitled to the subsidies by virtue of owning the land they do.