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Heather Wetzel (pictured above right, at Tent City) argues that the Labour party should look to fundamentally change the tax system and shift taxes from wages and production onto unearned natural resource wealth
There is a strong argument for a tax reform that will result in the whole population sharing the natural resource wealth we all create and which will bring about the efficient use of land and other natural resources.
The Labour Party today ignores the economic and social damage the current tax system does and will continue to do until there is a proper understanding by politicians, their advisers and academics that there is fundamental flaw with their economic analysis that urgently needs to be corrected.
In our borough, we don’t have to look far to see the number of empty or underused properties that are much needed for homes and jobs. Alpha Lavalls, The Baltic Exchange, Wilson and Kyle, the New England pub, the never used new office block at the corner of Great West Road/Boston Manor Road (built on the site of the former Park Baptist Chapel), and so on. They stay idle or underused (some for many years) simply because of land speculation – and there is no incentive to get these land owners to bring their sites into full use. This is the case across the whole of the UK.
Yet we have homeless families and individuals; we have people unable to invest in a new business because they cannot afford the high rents charged by commercial property owners; we have children playing on streets because they have no play areas near them where they can safely play; we have new homes being built on green land thus destroying our environment; elsewhere we have such developments built in places that mean long-distance commuting, which adds to environment and social problems; we have a real need for more investment in our health services, in education, in new homes, in social support networks and so on. Around a quarter of food grown is actually destroyed or fed to livestock by farmers (because supermarkets won’t accept knobbly carrots for example) and that is before shops and consumers add to this terrible waste. White goods are deliberately built to have a short life span. Long distance lorries travel half empty whilst causing pollution and using valuable fuel. It is cheaper for a family to travel a distance by car instead of using a train or bus. The list of waste we create and the damage we cause through the misuse of our natural resources is ever-growing.
By taxing the economic rental value of our natural resources, they will be used sparingly and efficiently and other policy reforms such as investing in renewable energy, good planning and reducing pollution will have a real chance of succeeding.
Land and other natural resource wealth is created by all of us – not by those that claim to own the products of nature. The wealth that comes from our collective use of all land and other natural resources is in fact created by the collective public and private investments and consumption that we all pay for either directly or indirectly. It is an economic fact that as a country increases its productivity, so the value and therefore the price of the land and other natural resources will rise.
If business rates and council tax were abolished and an annual Land Value Tax (LVT) was applied to every site according to its optimum permitted use, there would be an immediate financial incentive for owners of land to use it efficiently and we would all benefit because:
- LVT cannot be avoided
- LVT is transparent, flexible and cheap to collect
- LVT stimulates economic development in a positive way
- LVT can be used as a tool for rationing the use of all natural resource
- LVT does not penalise employees or employers or capitalists
- LVT is transparent in identifying the subject of the tax
- LVT acts as an incentive to bring sites in our towns and cities into full use thus reducing the need for urban sprawl and the destruction of green and natural land
- LVT captures at least some of the wealth we all create
- LVT is fairer for tenants and other non-property owners ( private and commercial ) who gain no share of the land wealth they also help create
- LVT will help protect the environment and avoid urban sprawl by bringing unused and underused sites into full productive use
- LVT takes the opportunity of land speculation out of investments and allows the positive use farming subsidies to encourage traditional, small scale and organic farming as viable environmentally friendly ways of farming.
For more information, go to www.labourland.org or contact Heather Wetzel on firstname.lastname@example.org
Heather Wetzel is a member of Isleworth and Brentford branch.