Local Tax Reform in Scotland
Land Value Taxation Proposed to Replace Council Tax and Business Rates
In Scotland the Green Party is calling for the abolition of two taxes, replacing them with a simple local tax reform that has proved successful where tried.
Greens promote a progressive alternative to Council TaxGreen MSPs have lodged an amendment for debate on Council Tax on Thursday, June 21, 2007, urging government to carry out a review of Land Value Taxation (LVT) as an option for the replacement of Council Tax. Speaking in advance of the debate Robin Harper MSP will argue that the bad idea of replacing an unfair property tax with an unfair income tax should be resisted. In 2003 Robin Harper won a vote in parliament which requested that the Scottish Executive undertake an investigation into LVT. However, this was never carried out.
In the 2003 - 2007 parliament the review of local government finance failed to properly investigate Land Value Taxation (LVT) as an option. The Burt review of local government finance did not take more than a brief look at LVT despite finding: "many positive features of a land value tax which are consistent with our recommended local property tax, particularly its progressive nature."
Harper says Land Value Tax offers a fairer and more effective local government finance system which will have many more social, economic and environmental benefits than the much criticised and unfair system of council tax. Similar forms of local taxation exist in many other countries including Denmark, South Africa, Jamaica, some Australian states and some cities in the United States.
Greens say a system of land value taxation would benefit those on low incomes and aspiring first time house buyers. LVT would help stabilise property prices, while SNP/Liberal plans for Local Income Tax would worsen housing market distortions. LVT could also be used to support small businesses and enhance links between local government and local taxation. The system would reduce speculation in land and 'landbanking', where speculators hold land without developing it while waiting for planning permission or an upturn in property prices.
The proposal would also free up rural land for community benefit, reward more efficient businesses, enable the promotion of sustainable land uses such as organic farming, forestry and affordable housing, be much easier to administer and more difficult to dodge than income tax based systems. LVT would raise the same amount of revenue as the current tax and rate system, but could also be more easily adjusted as appropriate for service provision.
Robin Harper MSP, said: "All the other parties are thinking far too narrowly on this issue - the new politics should look at all the options. It is a shame that the Burt review did not examine Land Value Tax more thoroughly. However, what it did find was that LVT would provide a more progressive form of taxation.
"LVT will target the asset rich, not the poorest in society and is an inherently fairer system all round. It will drive efficiency throughout the land-use system, make more land available and resist speculative planning proposals which distort the market. It will offer public benefits, which are currently captured by private interests.
"I urge all parties, and there are LVT supporters in the SNP, Labour and the Libdem ranks, to consider LVT as a possible opportunity to break up the polarised arguments over local income tax versus minor tinkering of Council Tax."Also see http://www.scottishgreens.org.uk/site/id/3749/title/_039_Victory_For_Constructive_Politics_039_As_Green_MSP_Wins_Vote_On_Radical_Land_Tax.html
Various proposals for changing Scotland's system of local taxation have recently been put forward. These range from minor modification of the status quo, to the wholesale replacement of the existing systems by alternatives such as a local income tax. Instead of wild, untested ideas, LVT is a proven success.
A Green Bill submitted in the last session of parliament proposed shifting the base of assessment away from whole-property value and onto land value only.
Key benefits: Council Tax and Business Rates will be part of same system. Those most capable of paying will pay more. Low income households will pay less. Exemptions and discounts for pensioners. Free up derelict and underused land and empty properties. Tax falls on property owner, not occupier. Will stabilise the housing market. It would finally create a comprehensive land register. Those who use land efficiently, pay less. Difficult to dodge, easier to collect.
Green Tax Shift Headquarters
Tax Cuts, Green-Style
Green Tax Policy Advances in Scotland
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