Evaluating the ACT land value tax transition

For all the talk of the benefit of land taxation, most Australian economic commentators have so far ignored the experiment happening in our nation’s capital.

Since 2012 the ACT has been phasing out stamp duties and phasing in land value taxes.

To see what lessons can already be learnt from this experiment, Prosper Australia commissioned me to delve into the data and see what is really happening.

The results of that effort are in a report that has been released today. It is called The First Interval – Evaluating ACT’s Land Value Tax Transition

If you are in Canberra, come along to the report launch at lunchtime today:

12.30-1.15pm Monday 12 September 2016
Boardroom, Hotel Realm 18 National Circuit BARTON ACT

For those who can’t make it, a quick summary of the main findings are:
• Increasing land tax rates appears to have deterred housing speculation
• Future land tax obligations are already capitalised into lower land prices
• Because of this, new home buyers save between $1000 and $2000 per year on mortgage costs
• New housing construction has remained strong during the tax transition period
• Residential rental growth is at historical lows, benefiting renting households
• The distribution of land tax obligations between different types of land holders is the main political sensitivity

The full report is here.

Comments

  1. A very interesting read and potentially a good argument for considering moving to the ACT as the only city in Australia that is starting to move towards a model where less economic capital is misallocated into speculation on existing house prices.

    If people start voting with their feet by moving to a city where housing is affordable, business and general economic activity may well follow.

    A decent fast (not necessarily very fast) rail link to Sydney would benefit both cities and more than a few places inbetween. Assuming of course that NSW introduces a similar land tax system along the route and especially near each stop.

    Just imagine – actual economic leadership from the nation capital.

    • One caveat – as noted in the report the ACT land tenure system of leaseholds means that effectively there is only one land banker (the LDA). While this means its profits from land sales acrue to public revenue it also means that it may be inclined to restrict supply to maintain price levels – particularly in an ideological environment where households are being encouraged take on massive mortgages.

      Adoption of a rental vacancy rate target that maintains downward pressure on rents might be an effective way of setting a target for new releases of land leaseholds.

      • Pfh: “If people start voting with their feet by moving to a city where housing is affordable, business and general economic activity may well follow.”

        Is absolutely correct. ACT is the national capital with little commerical activity. Were a state government to take up these reforms, it would become a magnet for investment on lower costs, easy land transactions and simple efficiency. Competitive federalism is usually code for prompting tax cuts that benefit particular groups. Land tax reform helps everyone – even the rentiers! It is all on the margin.

  2. I am a supporter of a broad-based land tax….but…..
    “Residential rental growth is at historical lows” ?
    Canberra asking house rents up 12% yoy
    Canberra asking unit rents up 10% yoy
    Canberra vacancy rate is 1.3%
    Canberra asking house prices up 8% yoy

    I agree with Pfh the key is land releases and the LDA monopoly. Require increased residential land releases(coupled with a bblva) until the vacancy rate hits 3%.

  3. So an economist with a property development background provides a report commissioned by a group committed to creating a single source of taxation and voila we learn that LVT is the bees’ knees promising lower house prices. WTF are you guys putting in your kool aid?
    For heaven’s sake, Prosper has been rattling around the place for decades with their wonky Georgist views on taxation which might have had some traction in the 19th century, but hello out there …….. we have a fiat currency remember!
    Just google the reported problems with the ACT tax model which is probably going to get the territory government kicked out and you can see all of the claims made by this “study” are a load of cobblers.

    • A fiat currency is no help to those arguing against land tax unless of course they completely deny that inflation exists and NO chartalist from any of the chartalist schools argues that when pressed on the point.

      So there will always be taxes and the question becomes what taxes are equitable.

      With regard to land taxes it is important to distinguish between

      (1) land taxes that seek to recover the costs of all of the infrastructure and services that support the value of land and

      (2) land taxes that seek to tax the wealth represented by land ownership.

      At the moment we have a system whereby too much of the infrastructure and services that support land values are supported by taxation on labour and not enough from taxes on the land itself.

      Local council rates do not scratch the surface of the costs of supporting land values so at the very least we should have higher levels of rates – perhaps a state land rate to reflect regional infrastructure costs. Calling these charges rates will also help distinguish those charges from taxes that are aimed at taxing land wealth.

      I fully support No 1 but I am less convinced by the arguments for taxing land for purpose No 2 (if the wealth primarily represents accumulated after tax income)

      Unfortunately for those that have concerns about targeting No 2 – land wealth does not currently represent accumulated after tax income.

      The current monetary system whereby money is primarily created by bank lending secured by residential housing is designed to pump land asset values as high as possible. In short the value of what should be a public monetary system has been yoked to pumping up the wealth of existing assets holders.

      In these circumstances it is quite understandable and legitimate to argue for the taxation of land wealth.

      Fix the monetary model (by greatly restricting or removing the rights of ADIs to create money in relation to unproductive real estate lending) and the arguments for taxing land wealth will be greatly reduced.

      • 007, what you and others are talking about in this article relates to federal taxation and this is the view that Prosper have been promoting since 1894 …… that’s right the 19th century. They were called something else then but their objectives are unchanged. They are a bunch of nut jobs wrapped up in some obscure neoclassical theory of taxation which doesn not relate to the real world.

        But that’s a digression. The article is talking about state taxation. State and Federal taxes are entirely different in purpose and effect. The ACT LVT, although a territory tax is pretty much a state tax. It is real revenue where it’s purpose is to replace the state stamp duty. The stuff you are talking about relates to federal taxation and although I disagree entirely with your proposition, that is not the point of my comment relating to this article.
        So let’s leave the petri dish theory behind and look at the real life effects of what replacing stamp duty with LVT will actually achieve.
        1. The proponents say it will be efficient because it will be like local government rates so it’s easy to apply and unavoidable.
        They fail to add that in the case of NG and CGT the LVT paid is a business deduction which impacts of federal taxes, so the impact will fall on non business land owners. In other words, the elite get a free ride.

        2. They say it will reduce prices because the effect is over all land values and not just those values on properties that are sold. We know this is nonsense because the sale price of real estate is a matter of supply and demand. Any reduction or increase in price simply flows to the profit on the sale. You need only look at Sydney for that to be proved.

        3. They say this will free up land supply because holders of land at the moment can sit on the asset whereas if that land is taxed then holders will be encouraged to offload the land. Again this is a nonsense argument and we can proved that because local government rates are paid on all land, but that does not prevent land banking.

        4. They say that LVT will reduce speculation. They base this argument on an observed sample without taking into account other factors in speculation such as interest rates, demand and supply and all the other factors that feed bubbles. This could hardly be a rational explanation.

        5. They observe that rentals have not increased in the ACT during the cross over to LVT, but fail to mention the demand cycle has been dented by the low wage growth in the economy which is the real reason rents are flat and has no proved connection to the LVT.

        6. They say future LVT is already capitalised into future land prices. How? This piece of microeconomic chicanery is entirely unproven. There is NO evidence to suggest LVT lowers future prices of land. In fact interest rates are a better indicator of future land prices than LVT and that is a proven fact.

        So all in all, this is a shabby exercise to promote LVT, mixed up with this notion that it is “efficient” and will make land prices cheaper by forcing the costs of flipping real estate onto the general populace. I don’t know about you, but I don’t relish the thought of supporting the purchase of property by all and sundry, but especially the businesses flippers and the foreign “investors” or those NG sharks who are the real problem pushing real estate through the roof.

      • Malcolm,

        First up – thanks for the considered reply! I will make some quick notes on some things that come to mind immediately but I will give it some more thought over lunch.

        1. The proponents say it will be efficient because it will be like local government rates so it’s easy to apply and unavoidable.
        They fail to add that in the case of NG and CGT the LVT paid is a business deduction which impacts of federal taxes, so the impact will fall on non business land owners. In other words, the elite get a free ride.

        Are you saying that you are opposed to deductions against income generally or just in relation to property income or just in relation to LVT and property income?. The deductability of the LVT is something that can be addressed if it is considered an excessive “free ride for elites” but some of the other dodgy deductions, like depreciation, that are allowed property investors might be a better starting point

        2. They say it will reduce prices because the effect is over all land values and not just those values on properties that are sold. We know this is nonsense because the sale price of real estate is a matter of supply and demand. Any reduction or increase in price simply flows to the profit on the sale. You need only look at Sydney for that to be proved.

        I don’t think that supply and demand is the sole determinant of house prices. The supply of credit is equally important. In any event I don’t see how either invalidates the argument that increasing the expense of holding an asset reduces its value and therefore an increased expense on all assets reduces the value of all assets

        3. They say this will free up land supply because holders of land at the moment can sit on the asset whereas if that land is taxed then holders will be encouraged to offload the land. Again this is a nonsense argument and we can proved that because local government rates are paid on all land, but that does not prevent land banking.

        I don’t think they are making that argument. They are saying that it will increase pressure on people to use land productively and if applied to land banked land it should do so. But there is a real risk that if land banked land remains zoned rural any land tax may remain peanuts. Ultimately, I agree that a LVT s no guarantee that land will be rezoned for residential purposes or higher density

        4. They say that LVT will reduce speculation. They base this argument on an observed sample without taking into account other factors in speculation such as interest rates, demand and supply and all the other factors that feed bubbles. This could hardly be a rational explanation.

        I agree that speculation can happen readily with or without land taxes as speculation is mostly about betting on rising asset values and that has much more to do with betting on the bipartisan population ponzi scheme and the RBA and APRA facilitating the supply of cheaper and cheaper credit to borrowers

        5. They observe that rentals have not increased in the ACT during the cross over to LVT, but fail to mention the demand cycle has been dented by the low wage growth in the economy which is the real reason rents are flat and has no proved connection to the LVT.

        I haven’t looked at that part of the report in detail so I cannot comment on whether they are making that claim or the strength of the claim. However, I agree that rents can move for a variety of reason and as we have seen in Perth – a vacancy rate of between 4 and 5% is very effective in pushing down rents

        6. They say future LVT is already capitalised into future land prices. How? This piece of microeconomic chicanery is entirely unproven. There is NO evidence to suggest LVT lowers future prices of land. In fact interest rates are a better indicator of future land prices than LVT and that is a proven fact.

        I think you are talking about 2 separate things there. A LVT can be capitalised AND property values still rise due to reductions in interest rates and thus borrowing capacity of buyers. But I agree it may be difficult to prove or separate out the two potential factors in order to quantify how much capitalisation due to LVT has taken place. As I noted above I think the major factors are the supply of suitably zoned land AND the availability of credit so the impact of LVT on land prices is not at the top of my list

        So all in all, this is a shabby exercise to promote LVT, mixed up with this notion that it is “efficient” and will make land prices cheaper by forcing the costs of flipping real estate onto the general populace. I don’t know about you, but I don’t relish the thought of supporting the purchase of property by all and sundry, but especially the businesses flippers and the foreign “investors” or those NG sharks who are the real problem pushing real estate through the roof.

        All in all my position remains as set out above. Higher rates (or LVT) to support the provision of services that support land values is clearly justified. As a measure to tax wealth or to redistribute wealth I remain unpersuaded.

      • FYO 007 and interesting report from Phil Coorey regarding the ACT adventure in LVT
        http://www.afr.com/opinion/columnists/act-land-tax-might-please-economists-but-its-expensive-for-everyone-else-20150604-ghh8qa
        I see the problem such that the Prosper report is trying to base their case on cause and effect without stringently approaching the issue from the many perspectives surrounding the issue of LVT. The carrot they offer is attractive to people watching the bubble erode their opportunity, but until other problems such as LIRP, NG and CGT are addressed, the application will result in the outcomes Phil has touched upon. The economics are debatable, but like all theories the question is whether they will stand the empirical test and I suspect that is what the author is attempting to do, but there are too many variables distorting the ACT experience. We all have our pet theories, but like GST the devil is always in the detail as no doubt the original proponents of GST would agree in hindsight. The problem I have is that LVT as applied in the ACT has created free riders at the expense of those who gain no benefit from the application. Thus the equity of the tax imposition doesn’t pass the fairness test, but rather has been tied up in this self interested argument without much real evidence put forward.

      • Mal,

        That Coorey article does a good job of illustrating how reducing an existing benefit is easily characterised as an unfair penalty.

        Property owners have for many years benefited from having the value of their properties supported by general revenue directed to infrastructure that supports land values. The property owners who benefitted the most were those that did not move and thus also dodged stamp duty.

        Exclusive dominion over land is fine but not with a subsidy to boot.

        Naturally such a lurk was even more attractive with the RBA and APRA pumping prices with credit creation sprayed at house prices.

        Having regard to all that a tripling of rates from $1,600 to $4,800 seems very reasonable.

        As it is difficult to convert a fixed asset into quarterly payments the govt should allow the higher rates to accrue against the title with payment when the property is sold.

        If the govt (state govts are constrained) is desperate for cash now it can sell the rights to the amount recovered to someone with the readies.

        A simple way avoiding difficulty for the asset rich but cash poor.

      • They say it will reduce prices because the effect is over all land values and not just those values on properties that are sold. We know this is nonsense because the sale price of real estate is a matter of supply and demand.

        It is astounding that someone thinks that reducing the return from an asset has nothing to do with that asset’s valuation. Saying just “it’s a matter of supply and demand” fails to recognise that there will no longer be the same demand for an asset at the original price. If the return from the asset goes down then supply and demand will resume equilibrium at a lower asset price.

      • You will need to explain that Chriso. I’m anything but.

        If you think that people who work to put a roof over their heads and get taxed on their PPOR are rent seekers then that is utterly lost on me.

        The rent seekers are those parasites in business who purposely hold real estate to earn capital gains and at the same time offset those gains with tax deductions whilst deriving economic rents (capital gains) and then cash in when it suits their purpose. Compare that with incidental capital gains on the PPOR which are used when someone has to replace their home on sale and have to find the extra cash because prices have been uplifted by the speculators and they are some how being asked to pay LVT on the way through so that these speculators can make their profits. It’s the speculators who are the rent seekers and not the PPOR owner.

        What clowns like Prosper and Murray want to do is have everyone pay an LVT which the speculator will use as a tax deduction, whereas the PPOR cannot, and somehow say this is efficient and will free up land and all the rest of the bullshit arguments they put forward. If you’ve swallowed that then you’ve fallen for their nasty little game. This is why LVT was abandoned many years ago after it became possible for the ordinary person to acquire and own their own land. It won’t gain traction anyway, as it’s just a piece of stupid social engineering that belongs in the distant past. There is no social benefit for LVT to be applied to anything but commercial and speculative real estate. It should remain as such. Meanwhile, CGT and NG should be abolished which has more to do with rising real estate prices than stamp duty, unless you’re a flipper speculator.

        The cost of stamp duty spread over the lifetime ownership of a PPOR is much less than the annual LVT applied by the ACT which is exactly like the GST. Regressive.

        If you think everyone should be penalised because speculators are utilising the tax system then I’m flabbergasted.

      • Malcolm,

        Most land owners are not rent seekers by choice, but that does not mean they are not the beneficiaries of economic rents. Should they be privy to the free ride denied to so many others just because they happen to be house holders? That too seems extremely unfair.

        It is tricky is to approach this issue because the current system is laden with so many rorts and distortions. Not just in regard to land, but the whole system.

        I am partial to the idea of an LVT but would like to see more evidence for it first. If it does turn out to be a better system than what is in place I hope that it is implemented across the board.

      • FS, the problem the proponents have with this argument is the fact that speculators are able to gain tax deductibility via NG or by virtue of the fact they’ve formed a corporate to gain tax deductions. The PPOPR can’t gain the same deduction so the benefit is skewed towards the speculator/corporate which provides them with a free ride paid essentially by the PPOR and assisted by the federal taxpayer. This mixes up the taxation fundamentals which essentially negates any so called economic gains. It has never been explained to me in a coherent fashion how this proposal that these transaction costs which should be shared by the whole community when the benefits are enjoyed by the transaction partners. It’s like saying the real estate costs of buying and selling should be covered by other property owners.

        The issue is that LVT was promised to transition from stamp duty in the ACT, but it has become an unwieldy and costly exercise in double taxation at the state level. Because speculators can gain a deduction from federal taxation for a state taxation revenue, essentially not only is the PPOR supporting the transaction agents but the general taxpayer is also tipping in because every deduction is balanced by taxation revenue from someone else.

        The issue of economic rents is that everyone receives them. To single out home owners is just cherry picking because at the moment it suits the purpose of speculators in an attempt to avoid direct costs. The fact is that all of the LVT economic theory is based on LVT applied on other countries where the taxation systems are different. Currently, local government and state governments utilise land taxes to provide services and this is exacerbated when federal government cost shifts provision of social services to the states who shift it on to local government. However, this doesn’t reduce the federal taxation levels, because the burden gets shuffled around. Do you recall that GST was designed to repeal stamp duties? It hasn’t happened because GST is an abomination of the taxation system …… regressive and poorly designed and more costly to manage than the previous wholesale sales tax. We were sold this pup because it was more efficient and all I hear from the LVT geniuses is all the wonderful outcomes that will happen, but so fat no one has actually provided any evidence that in the Australian system that it will work. Frankly I’ve had a gutful of these self styled experts, particularly those with vested interests.

      • To single out home owners is just cherry picking

        What? The only person here singling out home owners for special treatment (zero land tax) is Malcolm.

        Do you recall that GST was designed to repeal stamp duties?

        Yes I recall the 15% GST (Hewson’s) was designed to repeal stamp duties and the 10% GST (Howard’s) was not.

        It hasn’t happened because..

        You can ignore history if you like but Hewson lost and Howard won.

    • I love a bit of school yard name calling too.

      Malcom darling, LVT is merely the way by which we equally share the value derived from resources supplied by nature for free.

      If we do not do that, then by extension, humans cannot share this Earth as equals.

      Fascists do not believe all humans are equal. Are you a fascist or someone who just hasn’t thought things through properly?

  4. I note that the report says the jury is still out on the net effect on government revenue. Until it is clear that the change doesn’t have a big negative impact, I don’t see the states jumping on board.

  5. Ahhh! Good to see you out defending vested interests and bad tax bases to turn a dollar, Malcolm.

    LVT may not reduce land prices – it may even increase them! Exchanging Stamp Duty for Land Tax will certainly have that effect, all else being equal, as removing this charge on sellers less the capitalised cost of the annual charge, would fall straight to the bottom line as Cameron demonstrates.

    Where land tax proceeds are used to reduce labour and capital taxes, people will work harder and investment will increase – the preconditions for prosperity. This would also remove the staggering deadweight losses currently imposed on taxpayers by our very bad taxes. The literature repeatedly demonstrates land tax has either nil or POSITIVE deadweight costs – while you prefer taxes that cause actual harm. Your stance is sheer bastardry.

    As for Prosper being a bunch on nutbags, perhaps we are. If so, your nutbag category would have to include Ken Henry and the Australian Treasury, Joseph Steiglitz, Milton Freidman, James Mirlees, Michael Hudson, Martin Wolf, Jessica Irvine, Ross Gittins, Leith van Onselen, Michael Pascoe, Warwick Smith, John Freebairn, Frank Stilwell, Gavin Wood, and many, many more.

    If the fact these individuals are alive and might recant, perhaps some dead ‘uns who now refuse to change their views might appeal: Adam Smith, John Stuart Mill, Albert Einstein, Leo Tolstoy, Sir Stamford Raffles, Sun Yat Sen, John Locke, David Lloyd George, Winston Churchill, Helen Keller, Banjo Paterson, Benjamin Franklin, Sir Thomas More, Voltaire, James Tobin, Abraham Lincoln, George Orwell, Thomas Jefferson, Frank Lloyd Wright, Walter Burley Griffin, Ramsey MacDonald, Andrew Carnegie, HG Wells and more.

    Are all these people nutbags, incendiarists and raving lunatics? No they are not.

    Land tax is remarkable in many ways. Consider, for example, its entirely voluntary nature. No one has to own the best parcels or even land at all. Those who hate taxes could easily ditch their land holdings and not pay a cent to Consolidated Revenue.

    We need policy that deflects investment away from the current unhealthy obsession with urban land holding that is impoverishing the young and promises to destabilise the entire Australian economy when people conclude they really don’t want more debt and switch focus to paying down what they owe. Our wretched taxes are the base of the current economic malaise. Much good can come from fixing them.

    • I thought you would eventually weigh in with your “independent” view David, but be careful accusing me of vested interests and just argue the facts.
      I’ll give you the short version. LVT benefits the flippers, NG/CGT beneficiaries and speculators while imposing their costs on the ordinary person. What I’ve put forward makes that clear.

      What evidence do you have to support your view that it lowers prices, frees up land, make people work harder and the other “benefits” that will flow to society? You’ve made the assertions, now cough up some independent facts so we can critique your view. I wait with abated breath. And don’t bother to throw all these historical cherry picked experts because it’s not an argument worthy of consideration. BTW they were talking about a sovereign tax and not a state tax so try not to look stupid when you drag out these references. I doubt you would recognise a bad tax. Explain to me that LVT is progressive for starters. You can’t because it isn’t. It’s a nasty regressive form of taxation thrown out for those reasons. But don’t forget, LVT already applies to commercial land or land in excess of the PPOR – has this reduced the price of commercial real estate or speculative land holding?

      Apart from your questionable independence, you conveniently ignore the facts under your nose that don’t suit the purpose of your narrative. Don’t waste my time.

      • You are chasing rabbits down burrows, Malcolm, jabbering about ‘independence’. This forum knows who I am. If they don’t, a quick google search of my name will reveal all! I do not hide behind anonymity as you do. Whose words ought carry more weight?

        Your comments shriek partisan. I merely want to advance the common good, and land tax would do exactly that.

        You say: “LVT benefits the flippers, NG/CGT beneficiaries and speculators while imposing their costs on the ordinary person.” which is utter drivel. Perhaps the removal of stamp duty would aid flippers and speculators, by making it cheaper to trade, but introducing a universal LVT would not. In the sharemarket, the benefit of short term traders in price-making is well recognised.
        How is this not also true in the land market? As for imposing costs on ordinary people, the impact of Stamp Duty on transaction costs is criminal. It traps people in and out of housing and is a handbrake on change. And for anyone putting their land to its best and highest use, LVT is minimal.

        LVT does not make people work harder – if anything, they would work less. It is the reduction of labour taxes and the prospect of keeping more of the fruits of their toil that would prompt them to work more.

        You assertion that there is a difference between ‘sovereign’ and state taxes – which I read you to mean federal versus state and territory taxes – is a distinction without difference. There is no practical reason against a federal land tax, a state land tax and council rates imposed on site value.

        You don’t have to take my word on which are the worst tax bases: read Australia’s Future Tax System, written by finer minds than yours or mine for the answers.

        Your claim LVT is regressive does not stand scrutiny either. The holders of the best sites clearly have the highest lifetime incomes and command over resources. And as I say directly above, this tax is entirely voluntary.

      • As I thought David. A reply with not one shred of evidence to support to your views.. Just a wish list of outcomes driven entirely by your own narrow perspective. The only evidence you can dredge up is a comparison with the share market …lol are you freaking serious? Added to that you fail to distinguish the impact between federal taxation and state taxation and it beggars belief how you can come into this place and pontificate as though you are the font of knowledge. But that stands true to form as you have notions of taxation based on 19th century economics. I thought the mainstream economists and pseudo economists were a joke, but you are seriously hilarious. It what you put forwards counts as economic credentials then Gawd help the world if anyone takes any notice.
        Anonymity? I’m not hiding, you can google me as much as you like. Post grad at Adelaide in the dark art I’m sure you’ll find me in the library. If you want to hold yourself out in public life, then expect to be taken to task when you promote views based on nonsense. If you don’t like it then either don’t make lazy comment or stay the hell away from my comments.

        I’ve read the reference you suggest and if you think that was written by fine minds better then mine you are deluded. If that tome was such a resounding piece of macro then why were the majority of recommendations never implemented? They reflect a treasury view of economics which quite frankly belongs in the 20th century which is why it was much lauded by the mainstream and economic googlers parading as commentators and then quickly binned without much fanfare from the bureaucracy. Too bad the content was never put to the bureaucracy when Henry was picking up his pay cheque from the public pocket …… you realise it was his departing shot as Treasury I presume? He has admitted that his work was never a prescription but a set of suggestions for further work. The kicker was a couple of years later when he said it was too late to implement some of those recommendations as circumstances have changed. Wow, just as well most of it was never implemented, don’t you think? Next you’ll be extolling the virtues of Steven’s ZIRP adventure in the face of repeated failure, instead of reflecting on his blowing the biggest asset domestic speculation in living memory and not just real estate but security investments as well. That’s real economic drag David. Look it up.

        So stamp duty is criminal is it? Well then real estate fees and charges must be particularly galling to you. Let’s not mention bank loan charges or maybe we should socialise all those costs as well so that we can all enjoy the efficiency of perfect markets and spread transaction costs over the entire society ….of course businesses will claim that as a tax deduction because it’s a cost of doing business so it’s a cost of production and in your world business should be able to recoup that because there’s that question of not dragging production eh? You get my drift David? All this clap trap you promote is fine in the petri dish of economic theory where all theoretical factors are known and modelled, but in the real world no factors are ever completely understood so outcomes are always unknown. Only empirical evidence over time is real evidence.

        I’ve wasted enough time already with reading your drivel. If you can’t put up some evidence to support your views then save me the hysterical ranting about my credentials. You won’t because you’re too lazy to move out of your comfort zone and do some original thinking.

      • Tips hat @ Malcolm

        Whilst were at it why don’t we bring back window taxes and offset with bayview window deductions so the wife and kids can craft stuff in sunlight to take to the village market and sell….

        The – prosper – thingy creeps me out… reminiscent of those American prosper churches – Prosperity theology (sometimes referred to as the prosperity gospel, the health and wealth gospel, or the gospel of success)[A] is a religious belief among some Christians that financial blessing and physical well-being is always the will of God for them, and that faith, positive speech, and donations will increase one’s material wealth. It is based on traditional interpretations of the Bible in Judaism (with respect to the Hebrew Bible),[1] though less so in Christianity. Prosperity theology views the Bible as a contract between God and humans: if humans have faith in God, he will deliver security and prosperity.

        According to historian Kate Bowler, the prosperity gospel was formed from the intersection of three different ideologies: Pentecostalism, New Thought, and “an American gospel of pragmatism, individualism, and upward mobility.”[2] This “American gospel” was best exemplified by Andrew Carnegie’s Gospel of Wealth

        Disheveled Marsupial…. might be interesting to see how that squares with Davids name dropping atomic bomb… massive plea to authority w/o deeper unpacking… and massive coattail riding… cough~~~~~~~~~~

      • Disheveled Marsupial…. might be interesting to see how that squares with Davids name dropping atomic bomb… massive plea to authority w/o deeper unpacking… and massive coattail riding… cough~~~~~~~~~~

        Fuck that’s funny. You literally just wrote a paragraph of ad-hominem based on a tenuous word association and you’re having a go at someone else for “appeal to authority”.

      • yeah ok doc we know you’re a cheer squad member of LVT, but why not add some sensible comment instead of barracking from the sidelines. You claim ad hominem on Skippy but you missed the bit where David had a crack at me or is that passé for clown central. The trouble with the LVT theory is that it’s high on rhetoric and low on evidence unless you are living in the 19th century like the Prosper flat earth fools. But feel free to add some valuable commentary to the subject. BTW selective copy is just cherry picking at it’s worst. Lazy and unproductive and out of context. If you actually read what Skippy wrote about the window tax you would have seen the irony, but I guess you were too busy wiping David’s rear end. Outstanding work.

      • Tenuous drsmithy – ????? – are you 100% sure about that, sure enough to own your assertion that its pure ad-hominem, especially when David has a propensity for knee jerk spittle when anyone disagrees with him.

        His opening remarks – “Ahhh! Good to see you out defending vested interests and bad tax bases to turn a dollar, Malcolm.”

        Something that Malcolm corrected showing the confusion about federal vs state realities, as well, as noting that we do not live in the 19th or 20th century nor is our monetary or financial system bare any resemblance to them. As such its a bit wonky to ascribe long dead peoples opinions to an environment that has little in common with the authors.

        I would also note that I am familiar with the Single Tax history of Henry George and its latter manifestation Georgism which supports multiple mechanisms for government funding as well as Henry’s disdain for empirical based political economic evaluation, but preferred thought experiments about the effects of various factors.

        As far as spray and pray name dropping goes I can handle most of them, but Friedman is a huge no, major architect to everything that has gone wrong over decades, with a side of flim flam man.

        Whilst I share in spirit many of Henry’s opinions about small segments of society gaining to much wealth and power, which in turn becomes anti social and destructive, I don’t share the pure philosophical approach nor the over simplification of complexity in seeking remedies. Were Henry alive today and have the available knowlage we have now, compared to what he had then, would he make the exact same statements or have the exact same perspective.

        Disheveled Marsupial…. and if you don’t think that in the name dropping that their is not a huge religious influence…. well you need to expand you reading and historical perspectives…

      • yeah ok doc we know you’re a cheer squad member of LVT, but why not add some sensible comment instead of barracking from the sidelines. You claim ad hominem on Skippy but you missed the bit where David had a crack at me or is that passé for clown central. The trouble with the LVT theory is that it’s high on rhetoric and low on evidence unless you are living in the 19th century like the Prosper flat earth fools. But feel free to add some valuable commentary to the subject. BTW selective copy is just cherry picking at it’s worst. Lazy and unproductive and out of context. If you actually read what Skippy wrote about the window tax you would have seen the irony, but I guess you were too busy wiping David’s rear end. Outstanding work.

        You’ve offered little to this discussion except abuse (which you were the the first to post and subsequently most prolific) and assertions remarkably lacking evidence.

        Meanwhile, eagerly accusing others of doing the same thing.

        Hypocrite.

        I’m happy to admit insufficient knowledge on the topic to offer an opinion, because I’m here to learn, and, where possible, help others. Something I value in other posters like David and pfh007 who it would seem have similar goals.

        Unlike you and skip, who it seems are just here to sneer and abuse. Which greatly diminishes whatever valid points you might actually have.

      • Tenuous drsmithy – ????? – are you 100% sure about that, sure enough to own your assertion that its pure ad-hominem, especially when David has a propensity for knee jerk spittle when anyone disagrees with him.

        LOL. You have a go at someone else for “knee jerk spittle” is even funnier than having a go at them about “appealing to authority”, when those two terms describe probably 90% of your posts here.

        YOur post above was _textbook_ ad hominem.

      • Drsmithy…

        I can’t remember the last time I saw you make an argument outside pure rhetorical reasoning like your arguments wrt Uber, that’s it…. deep arm chair thunkit. You can’t even pass that bar in your comment above – all your comments are – shtick. Do you even know what an appeal to authority is, that by stating a name it makes it fact or truth, where as when I attribute its to inform of the source.

        You know a little bit, about a bit of basic economic philosophy, from few classical – neoclassical schools, that’s it. Its akin to reading the bible and then proclaiming deep under standing of not only humanity, but the entire universe…. without even sticking your head out the window… FFS…

        Then you pop up in this thread to bleat on about me using ad-hominem, when your comment is a pure ad-hominem – without any reference to the context of the tread above, its just a drive by hit job. As Malcolm noted I reference window taxes, do you grok that in relationship to the topic at hand – ?????? – or are you just blindly following what you believe an LVT will accomplice because it conforms to your biases. Its as bad as the Austrians playbook i.e. people groping around in the dark describing human nature in a prescriptive manner with what ever rolls around in their collective heads.

        You don’t even get the antiquarian frame work that the LVT crowd bases their perspective on and how that does not factor in the new information that exists in this reality, in fact it refuses to acknowledge key factors, because it makes their arguments redundant. Its a massive case of path dependency with endless literary critiques dressed up as evidence based introspection.

        Disheveled Marsupial…. It thought I suggest this book on that topic… Intellectual Path Dependence in Economics – Why economists do not reject refuted theories – Altug Yalcintas

      • IMO because of your lack of knowlage you don’t see the games others play, such as 007 et al not being entirely honest about his position and what agenda he had, after yonks of discussion, fully knowing where I was coming from. That is call deceptive and is more corrosive to intellectual debate than any ad hominem.

        Your entire involvement in this tread has been nothing more than a emotive plea, which suggest your side tracking the conversation from the core issues.

        Good grief drsmithy…. back in the day on this blog it was nothing but a stream of red hot dog piling ad hominem and juvenile back slapping group think about what had occurred and as long as you conformed you were part of the gang…. present information contrary to that group think and the vitriol would fly “Ahhh! Good to see you out defending vested interests and bad tax bases to turn a dollar, Malcolm.” is that an evidence based approach – ?????? – or an emotive screed to paint the detractor as a malfaisant low life right out of the gates.

        Disheveled Marsupial… or don’t you get its just another variant of the free market perspective where the market dictates to humanity and not serve humanity…

        PS. the book suggestion… yes… economic opinions have been refuted… as such the whole opinion based approach is insufficient to conduct argumentation by… were not discussing Dawg above… eh..

  6. Leith,
    I know that Dr. Murray wrote the report, and I plan to read it, but I’d be interested in your take on it as an interested observer.

  7. Haven’t had a chance to read the full report yet but the presentation was really good. Dr Murray found a lot of sensible land and property policy in the ACT that I hadn’t known about in addition to the LVT. He made a case for the lower price growth potentially being an effect of the LVT changes but also gave other possibilities and didn’t pretend the data was anything other than what it was. For example while its likely that some of the difference in price change is due to the LVT its unlikely to be the only factor and we can’t tell what proportion is due to which effect just from this data. The kind of good responsible statistics I’ve come to expect from him.

  8. the problem is that speculators are able to gain tax deductibility via NG

    For a start, that’s a two wrongs make a right argument. Just because there is one mistake in the tax system (NG) doesn’t justify having another mistake (inadequate land or economic rent tax). Secondly, it is not set in stone that the appropriate way to tax land is to levy tax on the land value in isolation from all other taxation. The land rental value could, for example, be assessed as part of taxable income for determining income tax. Your argument fails to consider the fundamental fact that there is a benefit that landowners get but non-landowners don’t.

    • Non landowners pay income tax too Chriso so they are enabling the tax deductability of the speculators. I’m afraid you’ve missed the point entirely and branched off into just another bottomless pit of theory. I prefer to work in the real world of facts.

      • Non landowners pay income tax too

        What is the point of this non-sequitur?

        I’m afraid you’ve missed the point entirely

        No you have missed the point entirely. You have completely failed to recognise the fact that landowners are getting an economic rent benefit from their land ownership that non-landowners do not get and you propose absolutely nothing to correct this inequity.

        I prefer to work in the real world of facts.

        Spare me the straw men for heaven’s sake.

      • Chriso…

        Land owners collecting rents… eh… how about going for the big fish and deal with the moby dicks of rentiership or the economic mouth organs that provide cover for them.

        Disheveled Marsupial…. BTW how do you collect an LVT tax on gates frictionless capitalism… seems that market is full of rentier activities…

    • BTW Chriso, you’re putting words in my mouth. In no way do I support NG in the same way I don’t support LVT because both are distortions. I thought I made that clear.

      • In no way do I support NG

        Fine. Then support the reform of gearing deductions. But just because there is one mistake in the tax system in no way justifies leaving in another mistake.

  9. LVT=rent.

    So in the real world an LVT collects rental values that would otherwise be capitalised into incomes and selling prices.

    So, in the real world, any critism you have of LVT equally applies to private landlords or banks selling mortgages.

    Do you think we should ban private landlords and mortgages? To be consistent you should.

    But of course you are going to expend energy denying what is plainly true.