…. Government

Malcolm Turnbull

For example, if you were to replace stamp duty on property transactions, and replace it with a land tax, a general land tax, there isn’t a tax economist or theorist in the country that wouldn’t tell you that would be a good move, because taxes on transactions like sales of property obviously inhibit trade, they slow down economic activity. Everyone understands that. So that would get a policy tick.

Productivity Commission

State and Territory Governments should move from stamp duties on residential and commercial properties to a broad-based land tax on the unimproved value of land.

The key elements of the Commission’s recommended reforms are:

–          Replacement of stamp duties on property transfers with a broadly-based tax on land values. The shift to a broad base is essential to ensure that revenue is raised efficiently and the tax burden is not disproportionately imposed on a few groups.

–          Provision for tax deferral for certain low income groups, so that taxes do not force people with less capacity to move. These include people such as owner-occupier retirees, who may be attached to the family home and their community.

–          Low interest rates on deferment of taxes, for example bond rates, consistent with the policy objective of deferment.

The Treasury

Consistent with earlier studies, stamp duty on conveyances and the company income tax are the least efficient taxes (that is, they have relatively high marginal excess burdens), while the most efficient tax is a hypothetical broad-based land tax.

Infrastructure Australia

A broad-based land tax – accompanied by the removal of inefficient taxes such as stamp duty – would provide an efficient, sustainable approach to value capture in Australia. While a number of mechanisms can provide individual solutions for specific projects, reform of land tax presents a clear opportunity for a more sustainable, longer term reform. The impact of this change could be streamlined by broadening existing state-based charges, and aligning payments with local property rates cycles.

RBA

Phillip Lowe: I don’t see any economist arguing that the current way that society taxes land is appropriate.

….. Economists and commentators

Ross Gittins

Increasing land tax would mean the reform package made the tax system fairer rather than less fair – surely an important goal of honest tax reform.

As well, universally applied land tax is more efficient than GST in that, as every economist is supposed to remember, it would do less to distort people’s decisions about whether to “work, save and invest”.

Peter Martin

A broad, well designed land tax would raise the kind of revenue that we need to fund our schools and our hospitals but it would fight inequality, rather than exacerbate it.

It would encourage a more efficient use of housing stock, and along with reform to capital gains and negative gearing, it would combat the extraordinary inequality and instability we see in our housing market.

Replacing stamp duty with a land tax would make housing more affordable for first time home buyers. It would also give governments a further reason to invest in infrastructure that increases the value of land, such as roads and public transport.

And unlike other taxes, land tax is impossible to avoid: as much as he might like to, Malcolm Turnbull can’t move his Point Piper mansion to the Cayman Islands.

Saul Eslake

I think there’s a strong case, based on the principles of good tax design, for abolishing stamp duties entirely and replacing them with a more broadly-based land tax which includes owner-occupied properties (and which could be collected by local governments in exchange for a small commission, thereby allowing State Governments to abolish their revenue offices if they also outsourced the collection of payroll taxes to the ATO). Low-income owner-occupiers such as retirees could be catered for by allowing them to defer land taxes as a charge against their estates (as some local governments already do with municipal rates), although one can imagine the howls of protests from the would-be inheritors of otherwise unencumbered properties at this suggestion. Obviously there would need to be some transitional arrangements for people who had recently purchased properties to ensure they weren’t unfairly taxed twice, but they would not be too difficult to devise.

…. Interest Groups

AI Group

…in the absence of the prospect in the medium term of higher GST revenue an alternative way to finance the removal of the most inefficient state taxes should be investigated. One option is to finance the removal of residential and commercial conveyancing duties would involve using the existing local government rates bases or reformed land tax bases to phasing out the inefficient duties. There would be substantial gains for the economy if the burden was assumed by an annual charge on the much less inefficient unimproved capital value tax base rather than the turnover tax levied on the full sale price.

ACCI

…states should be encouraged to lower stamp duties on property and insurance, make greater use of a broad-based land tax and lower their reliance on payroll tax.

Insurance Council of Australia

The Insurance Council of Australia (ICA) says replacing inefficient insurance stamp duties can help state and territory governments raise extra funds while remaining within the existing fiscal envelope.

It follows the release of modelling by KPMG that showed replacing property stamp duties with a broad-based land tax could boost the NSW economy by $5 billion a year.

The Australia Institute

Stamp duty rollback can be financed by increases in land taxes, as advocated by the Henry Report, although there really needs to be base broadening in this area to make the land tax more fully tax economic rent from any land.

Grattan Institute

Higher property taxes could also be used to fund the reduction and eventual abolition of state stamp duties on property. Stamp duties are among the most inefficient and inequitable taxes available to states, and their revenues are inherently volatile. Although abolishing stamp duties is not the focus of this report, shifting from stamp duty to a broad-based property tax would provide a more stable tax base for states, spread the tax burden more fairly, and add up to $9 billion annually to GDP.

McKell Institute

The economic case for a land value tax is simple, and almost undeniable.

ACOSS

“If the goal of tax reform is economic growth, then the best reform option is a switch from stamp duties to efficient land taxes,” ACOSS CEO, Dr Cassandra Goldie.

HIA

“Replacing stamp duty with a more predictable and equitable tax would provide state governments with a more reliable source of revenue,” HIA Chief Economist, Tim Reardon.

ACTU

“Replace stamp duties with a broad-based annual land tax that will dampen house price inflation, stimulate more building of housing for rental purposes and encourage the development of idle land. If it is necessary to allow concessions on the land tax for equity reasons, the dollar value of the concession should be determined against income or wealth and not on the land value. There needs to be a suitable transition process in order to ensure that no household pays double taxation on stamp duties and land tax.”

We’ve been doing it for some time …..

But our prayers and thoughts are with those dispossessed by rent-seeking:-

“We heartily pray Thee to send Thy Holy Spirit into the hearts of them that possess the pastures and grounds of the earth, that they, remembering themselves to be Thy tenants, may not rack or stretch out the rents of their houses or lands, nor yet take unreasonable fines or moneys, after the manner of covetous worldlings: but so let them out that the inhabitants thereof may be able to pay the rents, and to live and nourish their families, and remember the poor.

Give them grace, also, to consider that they are but strangers and pilgrims in this world, having here no dwelling place, but seeking one to come; that they, remembering the short continuance of this life, may be content with that which is sufficient, and not join house to house, and land to land, to the impoverishment of others; but to behave themselves in letting their tenements, lands and pastures, that after this life they may be received into everlasting habitations.” – King Edward VI

Edward’s prayer of comfort was required to be read in all churches – but not so much Leviticus 25:23: “The land shall not be sold ….”

Boris Johnson has had a stunning win. The drift to the right, towards ‘authority’ and away from workers, often seems to characterise the early stages of hard times.

Despite US figures supporting an apparent economic recovery in that country, the use of the US$ as the world’s reserve currency works wonders for appearances. But the US Reserve’s support for inflated asset values comes at a great cost to dollars in American pockets, and casts significant doubt on the strength of the purported recovery.

Interest rates support the conclusion that we slipped into deep socio-economic deflation from 2008, and the state of world economies confirm the depressionary scenario (although not neoliberal economists’ useless definition of an economic depression).

The drift to the right at elections is palpable. So, congrats, Boris Johnson: that’s Brexit done, but what are you going to do about the UK economy?

From the outset of the 21st century we’ve experienced the madness of share and real estate prices, impossible escalation of private debt, banking and other corruptions …… so, let’s trust these features looming over us don’t degenerate further as they did once before – into the extreme rise of fascism.

Meanwhile, I’m inclined to agree with a tweet posted this morning in response to the British election:-

It is truly remarkable that billionaires have been able to convince the downtrodden that the former are best placed to look after the interests of the latter. Jokes on us.

The bleak economic outlook certainly isn’t improving.

…… but what would they know?

https://www.progress.org/articles/101-famous-thinkers-on-owning-earth

“Central banking, rigged capitalism, land speculation, income tax and neoclassical economics have compromised democracy, stunted progress, perverted the course of human destiny and compromised the future of this planet. ” – Ross Ashcroft

Here’s how! Watch with comprehension!

A great contribution, Ross Ashcroft!