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B438 - Welfare Bill 2012

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    (Original post by jesusandtequila)
    Resources are indeed hard to come by. Banks in his (also 1989) Costing The Earth book estimated it at £500bn, so we're using the far smaller figure.

    So yeah, we took the smaller figure, and used the growth in nominal GDP versus the growth in land values (as per the Land Value monitor linked to in the costing) and extrapolated from the period available (2000-05) to the total period (1989-2011 [nominal GDP data is not available for 2012 yet]). This is how we arrive at the £559bn figure.
    Just to be clear, how do they measure the value of unimproved land?

    It entirely depends on the rental value of their land. Pretty much **** all, would be the general answer, though. Farmland rental value generally, as exists in real life comes generally from the improvements made to the quality of soil etc. This taxes land as if it were unimproved, so land in the middle of nowhere would be virtually untaxed. If, however, you decided to try to build a huge farm in the middle of say, the City - you'd be paying a hell of a lot of tax. It's location location location - and yeah, farmers wouldn't really get hit at all.
    I'd wrongly assumed that there would be a mean rate applied equally to all landowners per area of land.

    On the contrary, land is one of the most hugely unevenly distributed resources. 0.3% of the people own 69% of the land by value. Furthermore, whilst you say wealth is 'concentrated in the City', you mean, people who work in the City - these people don't own the land where they work. Since, however, it's based on rental value - it's those living in the nicest areas (thus excluding everyone else from the most valuable land) that pay the most.
    From what you're saying it seems as if there'd still be regressive consequences. The area I live in has a mix of both well-to-do and poorer families living in very different types of house within close proximity of eachother on similar plots of land, presumably they'd pay the same in taxes as their neighbours despite having different means. And even if this is not the composition of most neighbourhoods now, the tax would incentivise the wealthy to live amidst poorer lots so as to reduce the value of their land, incidentally pushing up the amount of tax paid by those around them with less wealth. I'm not convinced that this tax is progressive, it's seems too blunt an instrument.

    And as for the suggestion that 0.3% own 69%, I have no reason to doubt that, but in and of itself it doesn't make a GRT progressive either - 0.00001% could own 99% of, say, peanuts, but taxing peanuts would not be progressive because the wealth of a person is not reflected by how many peanuts they own, nor by the value of the unimproved land they live on.

    As an irrelevant aside, wouldn't a steep land value tax give people a very good reason to live in massive skyscrapers?

    In the Mirrlees review from the Institute for Fiscal Studies, they mention that land values are highly correlated with lifetime income and wealth - rather than focussing on just current flows of income. It's the holy grail of the lump sum tax.
    I'll have a look at that but I'm very conscious that situations would change after the tax being introduced, as I've said above.

    On the contrary, a title deed for a house exists. We still own our house and it is recorded, legally, that we own our house despite the fact that we bought it in 1993, prior to the Land Registry's existence. Yes, currently they only track it when there are transactions, but it's a very small effort to go backwards to see who owns what. Simply - for people to have any legal recourse of having the property rights of that piece of land through the courts - then they must register it. It's not like you can avoid the tax by hiding pieces of land off-shore. This one off admin cost is far lower than the current swathes of money spent chasing down tax evasion and avoidance.
    The point I was making is less poignant now, but the land owned by some nobles may not have changed hands for centuries. It's a non-issue though, I agree.

    The reason we make the distinction is because of the different needs for those of working-age and those not to participate fully in society. For example, it isn't deemed (by wider society) necessary for pensioners to have an internet connection, for example. As society progresses, these figures will change, and they are subject to an annual review. I believe it's much better for politics to be over what is an 'adequate standard of living' rather than whether we should withdraw this benefit at x% or y%. It makes for better politics where we can actually have politics of values, not technocracy. For that reason - if you have some minor qualms with the figures, I urge you to vote Aye and amend them in a future Bill.
    I'll trust Rowntree in this case, though I think the ideal is having as objective an amount as possible.

    I'm leaning towards an aye, but as I've said I do have concerns about how progressive this would be/become. It's cruel that you've put a rehashed tax system, one that I'm slightly suspicious of, in the same bill as a basic income provision, which I'm heavily in favour of.
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    (Original post by jesusandtequila)
    How is it better to give someone a product they might not want instead of giving them the money to purchase the products that they prefer?

    By your logic, we should scrap all forms of income support and have the gov't give out food stamps, housing, free bus passes and they have no income or choice over what to buy.
    No, how did you get to that conclusion?
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    (Original post by toronto353)
    No you don't get my argument. You oppose the measure of stopping free bus passes, but you fail to explain why any one group of people should have free bus passes over another and because of that, your argument doesn't really work.
    Because those less well-off will find it harder to use transport if they have to pay for it a bus pass everyday.
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    (Original post by JPKC)
    What... So it's cheaper for the Government to buy someone a £70 bus pass rather than just giving them £70? Has it occurred that not all pensioners want/need a bus pass and would be much more content with spending the money how they'd like rather than how you'd want them to?
    That's not what I'm saying; I don't see the point of just handing them the money when they'd just be able to use it on anything they want. Of course not all pensioners will want a bus pass, so they just don't need to apply for a free one, it's that simple.
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    (Original post by mevidek)
    That's not what I'm saying; I don't see the point of just handing them the money when they'd just be able to use it on anything they want. Of course not all pensioners will want a bus pass, so they just don't need to apply for a free one, it's that simple.
    What? Like people do with normal benefits? Perish the thought. Why not give people the money and let them do what they want with it?

    Get TopHat to explain the idea of a negative income tax with you guys in the sub-forum.
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    (Original post by JPKC)
    Firstly, we need to actually debate the merits of a land value tax - I noticed that in the Tax Bill 2011 a lot of members simply nodded it through because, well, the Bill it came in looked nice and professional. I hope the same doesn't happen this time around.

    I've been trying to find some external justification for the gross land value (as stated in David Richards' somewhat obscure work) but to this point haven't been able to find anything online covering it - I'd appreciate some explanation for how the figure was realised.

    Assuming that it is watertight, there are still numerous problems with the implementation - firstly, the Bill here (and B408) assumes wrongly that all land in the UK is liable for taxation. The Government happens to own around 17%+ of all this land and cannot tax itself. Similarly, charities like the National Trust and RSPB have substantive holdings that shouldn't be taxed either - together the amount of untaxable land probably reaches around c.23%, and that ignores the Crown Estates and land owned by the Church.

    Secondly, could anyone who has so far nodded this by actually specifically tell me how much a farmer, with, say, 40,000 acres, would end up paying in tax for their land per annum?

    Land value taxes were first proposed at a time when the amount of land owned correlated with personal fortune, this is not the case today as wealth now is concentrated in areas like the City (in contrast to places like Downton Abbey 100 years ago). This undermines J&T's somewhat unfounded claim that this is a "hugely progressive" tax. How?

    Another problem of impracticality is that 40% of all land in the UK is not registered with an owner, it only comes to the attention of the Land Registry when it is part of a transaction - this obviously impedes the ability of the taxman to see who owns/owes what.

    I believe that we should have a ground rent tax, but I think that making it our prime source of revenue by such an extent is a step too far - I'd expect Lib Dem, Labour, Socialist, UKIP and Tory colleagues to consider the ramifications of destroying the redistributive nature of the tax system.

    As for the welfare section, I broadly agree with the principle of a basic income, but I'm not confident in the nuances of this proposal - for instance, why call it the Citizen's Income if legal residents can claim it? Seems a minor oversight. It's also odd that the figures for the CI have no explanatory notes - why make a distinction between retirees and adults? Why not just have employed people/unemployed people because ultimately that's what the difference comes down to. I think an adult's amount should remain static until their death.
    I'll reply to this when I have enough time to make a detailed response, but for now J&T has covered what I was going to say.
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    Just to a note to my own comments. I agree fully with the land value tax (though i'm slightly skeptical it should be so high) and it is the current form of the citizens dividend which i oppose.

    With that being said this bill is a big step forward (it's something that Jarred and myself were already looking at) and in its current form i will still vote Aye and ammend in the future if you remain committed to everybody having a dividend.
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    In a country with so many various benefits and allowances and tax credits, we already have a de facto citizens dividend, it's just incredibly complex, often arbitrary, creates enormous levels of bureaucracy just to pay it out and disincentivises work - none of which this bill does.
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    I am skeptical that the citizens dividend incites work for those currently unemployed as it essentially gifts then larger benefits.

    I accept that it is much simpler and easier to adjust however which i why i believe this to be a step forward and support the bill.
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    There are some welfare allowances that I don't think this bill would adequately cover even with Citizen's Dividend. From skimming through the allowance list, Attendant Allowance, which gives money to those who require full time care, wouldn't be properly replaced, nor would Bereavement Allowance, which gives money to those who're adjusting to the loss of the main income earner for a small time. Carer Allowance would need to be added. Your Disability Allowance only covers the cost of the individual who is disabled. Often the severely disabled are cared for by family members, who wouldn't be able to claim any allowance, which is what Carer Allowance is for. Funeral Allowance has also been removed, which means people have to fund something they have no real control over. I'm also assuming that by repealing welfare, you're not including budget loans and crisis loans, incidentally.

    All of these allowances tend to be very large amounts, and the loss of these amounts isn't really compensated for by the Citizen's Income. They're also all to tackle events that people can't really avoid or do much about.
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    (Original post by jesusandtequila)
    Not quite. Although farms are large by area - they are not particularly valuable land.
    It does appear to affect farmland quite a bit (from a brief read, I'll read it properly tomorrow when I am not going out) and I will have consider voting against it... unless they are exempt and my plans for farms being taxed separately with social security being part of my current plan I am working on.
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    So how much is a not particularily well-off farmer with 50 hectares of land (slightly under the UK average) going to pay under the increased land value tax?

    And while at it, how much is your average millionaire with a London Penthouse of, say 500 square feet, going to pay?
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    (Original post by TopHat)
    There are some welfare allowances that I don't think this bill would adequately cover even with Citizen's Dividend. From skimming through the allowance list, Attendant Allowance, which gives money to those who require full time care, wouldn't be properly replaced, nor would Bereavement Allowance, which gives money to those who're adjusting to the loss of the main income earner for a small time. Carer Allowance would need to be added. Your Disability Allowance only covers the cost of the individual who is disabled. Often the severely disabled are cared for by family members, who wouldn't be able to claim any allowance, which is what Carer Allowance is for. Funeral Allowance has also been removed, which means people have to fund something they have no real control over. I'm also assuming that by repealing welfare, you're not including budget loans and crisis loans, incidentally.

    All of these allowances tend to be very large amounts, and the loss of these amounts isn't really compensated for by the Citizen's Income. They're also all to tackle events that people can't really avoid or do much about.
    Other than bereavement care, why wouldn't 3(2) account for all of those?
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    (Original post by CyclopsRock)
    Other than bereavement care, why wouldn't 3(2) account for all of those?
    It may be intended to, but the way I read 3. it is saying that only the person affected by the disability itself can claim, which rules out carers (as while they are affected by someone else's disability, they don't have one themselves) and attendants (as being old isn't really a disability). Additionally, bereavement and funerals aren't covered.
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    TopHat's got a good point, (3) could be clarified/extended for the second reading?
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    (Original post by TopHat)
    It may be intended to, but the way I read 3. it is saying that only the person affected by the disability itself can claim, which rules out carers (as while they are affected by someone else's disability, they don't have one themselves) and attendants (as being old isn't really a disability). Additionally, bereavement and funerals aren't covered.
    That doesn't mean that person can't get money for carers (which they can then spend as they see fit, of course - be that on the livelihood of their family who would care for them, or some other form of care that doesn't involve their family).
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    (Original post by CyclopsRock)
    That doesn't mean that person can't get money for carers (which they can then spend as they see fit, of course - be that on the livelihood of their family who would care for them, or some other form of care that doesn't involve their family).
    Sure, but it isn't immediately clear on reading the bill that it allows for that. Is there any chance that could be clarified on a second reading?

    Additionally, that still leaves Bereavement Allowance and Funeral Allowance removed with no adequate replacement. Will they be included in a second reading?
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    (Original post by JPKC)
    TopHat's got a good point, (3) could be clarified/extended for the second reading?
    Quite possibly. Suggestions are welcome and this is the whole point of readings, we don't get it perfect first time.
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    I'd like to point out that it seems that, more or less, everyone in the Libertarian party is currently drunk.
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    Libertarianism. It's a party.
Updated: May 2, 2012
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