Killer Arguments Against LVT, Not (247)

Guest edition, part 1 of 2, emailed in by Logan B:

(1) The ability to pay argument is the most frustrating because the objection contains the answer. Consider [the Socialist in a Mansion's] statement that "whereas with a LVT they could see bills continue to rise without any corresponding rise in their ability to pay them."

What does the condition of rising LVT imply in the first place? Simply, it means that at least one person is willing to pay more LVT than was previously being levied. This means that the current land owner can just rent out the land to this other person and use the proceeds to pay their LVT. So, they have the ability to pay, but Homeys ignore this fact to score quick rhetorical points with those who don't think beyond the original statement's main thrust.

Implicit in the ability to pay argument is the audacious belief that people should not have to pay for benefits received if they fall short of income. Why are the essential services of government and the beneficial locational advantages of sites somehow exempt from the normal process of people paying for what they consume, while cell phone bills, utility bills, and *cough* rent payments to landlords are not?

It makes no sense. And it is rich with irony (or hypocrisy?) that Homeys argue for the inviolability of private property by defending the right of the landlord to evict tenants off of land for failure to pay for benefits received while arguing that they themselves should not be evicted off of land for failure to pay for benefits received.
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Short and sweet. But as ever, I can't help expanding. The Homey KLN is of course two-fold and sounds plausible if you say it quickly enough, but is inherently contradictory.

I trust that we are all familiar with the phrase "You can't have your cake and eat it"? The full Homey KLN cheerfully ignores this: "I want to live in my house until I die and then leave it to my children"

That's the point. The elderly Homey wants to have his cake and eat it.

In the absence of LVT, if he wants to maximise the amount his children can inherit, he would downsize into the smallest/cheapest home he can bear and either give his house to his children now, and they can either move in themselves, rent it out or sell it. So by remaining in it for twenty or thirty years after he no longer needs it he is depriving his children of some of their inheritance. It may well be that more kind hearted children refuse such an offer if they see that their ageing parent is happier where he is.

All LVT does is to turn this notional cost (the rental income which his children won't receive over the next twenty or thirty years) into an actual cost. Once all taxes on income are replaced with LVT, the elderly owner-occupier has the same choice, he can either leave the house to his children (by moving out now) and giving it to them so that they can collect the net rental income and enjoy the tax reduction; or he can stay in the house for the rest of his earthly and allow the LVT to be rolled up, which will (for sake of argument) mean that his children inherit nothing, but looking on the bright side and averaging this all out, the fact that they no longer have to pay income tax, NIC, VAT and so on will be worth far more than the house. So for his children, LVT is a win-win. And again, some more kind hearted children will happily plough some of their income tax saving into paying the LVT for their parents (which they then get back as a larger inheritance anyway).

So that's the curt reply to the elderly Homey: do you want your children to have the cake (the house now and the reduction in other taxes) or do you want to eat it (stay in the house and burden your children with all the other taxes on income)?