Tory think tank researches Land Value Tax
Posted: 02 Aug 2006 11:04:53 GMT
Centre-right research thinktank the Bow Group has published a paper detailing plans for a radical reshape of the tax system.
The most significant point for householders is the inclusion of Land Value Tax (LVT) which would involve taxing homeowners one per cent of their property's value after a threshold of £70,000.
LVT would replace council tax, inheritance tax, stamp duty, TV licence fee and capital gains tax. Mark Wadsworth, the author of the paper, believes that the income from all of the above taxes is in the region of £28 billion pounds and that LVT would bring in a similar amount.
Mr Wadsworth states: "As far as I can see, the above taxes are nuisance taxes and stealth taxes, that, taken as a whole approximate to a LVT of one per cent of the value of your home less an exempt amount for each household of around £70,000; the total tax raised by the new tax would also be around £28 billion."
The figure that Mr Wadsworth has concluded upon does depend on the rate and the value of the band exempt from LVT.
The purpose of the new tax would be to get rid of a large amount of needless taxes and replace them with one handy tax that is directly related to something that usually mirrors the income of a household. The value of a person's house, says the Bow Group, is a clear indicator of their financial status and thus the amount they can afford in tax.
What the report doesn't consider is that households may be punching above their weight in terms of owning a house that is several times their own income. This would usually mean that finding the money for the current council tax is a burden, let alone paying a tax that takes into account buying and selling a property.