At last, a tax you cannot avoid

Published: 19 November, 2010

• AS Richard Murphy, in his otherwise excellent piece, is aware, the government isn’t interested in collecting tax billions missing through avoidance and evasion because such action would hit the class interests it represents: capital and profit (We suffer cuts, but tax cheats prosper, November 5). 

As a recent Channel 4 Dispatches programme, “How the rich beat the taxman”, revealed, at least two members of the current Cabinet, including finance chief George Osborne, appear to be engaged in tax-avoidance activities.

There is also, however, another massive potential tax source available to any government that has “fairness” at the centre of its policies – land-value tax, or LVT. 

A tax supported by as diverse a group as Adam Smith, Karl Marx and Winston Churchill – and garnering increasing support among progressive commentators at the right-leaning Financial Times – clearly has something going for it. Labour Party leadership contender Andy Burnham had it in his manifesto but, wedded still to the values of New Labour, shamelessly wanted it to replace inheritance tax. 

As a replacement for the wholly regressive, unfair council tax, LVT has the advantage of simplicity: it can’t be avoided as land cannot be hidden. 

It would also help reduce the obscenity of property prices, now nothing more than a sick joke in London since it would no longer be profitable to keep property empty or land unused. 

Currently, a lower rate of council tax is payable on empty second/multiple homes.

Taxing land won’t solve the problem of landlordism and the curse of buy-to-let landlords – though falling property prices as a result of LVT would help. 

One thing that’s never talked about by any of the established political parties is the unearned income which comes from property price speculation and land. 

A proper debate on fair taxation is urgently required. Let’s hope Richard Murphy has started one here in Islington.

MEG HOWARTH 
Ellington Street, N7