tag:blogger.com,1999:blog-2948538160252327076.post782506952479921899..comments2023-11-02T15:48:50.381+00:00Comments on UK Bubble UK Economy: Rents - are they increasing by 14 percent or 3.9 percent?Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.comBlogger23125tag:blogger.com,1999:blog-2948538160252327076.post-31502538346452625802008-05-23T12:20:00.000+01:002008-05-23T12:20:00.000+01:00Aaaargh! 'Consumption taxes' are the same as incom...Aaaargh! 'Consumption taxes' are the same as income taxes but far worse - there's no deduction for expenses!<BR/><BR/>In a service economy (or even labour-intensive manufacturing), one man's consumption is another man's production. If you want to punish or deter consumption, you might as well chain up attack dogs and wild animals outside every shop, cinema and pub. What good would that do for the economy?Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-43388089171678384642008-05-23T01:35:00.000+01:002008-05-23T01:35:00.000+01:00I haven't given a lot of thought to LVT. Income ta...I haven't given a lot of thought to LVT. Income tax is the worst type because it punishes work. Consumption taxes are the best because they punish consumption and thus encourage saving (and therefore capital formation and independence). I'm not so averse to windfall taxes so long as they aren't just politically motivated (e.g. the periodic "excess profits" taxes)<BR/><BR/>NickAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-63320438967477701602008-05-22T15:17:00.000+01:002008-05-22T15:17:00.000+01:00Nick, I share your dream about the ideal size of t...Nick, I share your dream about the ideal size of the state, but you are completely changing the topic. LVT is still a less-bad tax than income tax, whichever way you cut it. And VAT is the shittest tax of all (with National Insurance a close second).Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-82575898182915627042008-05-22T10:53:00.000+01:002008-05-22T10:53:00.000+01:00Personally, I'd like to see a constitutional repub...Personally, I'd like to see a constitutional republic where the government is tiny and exists only to maintain public order, enforce contracts, break up monopolies and defend the territory. Something like what the US almost had after the Constitution was ratified.<BR/><BR/>What the government shouldn't do:<BR/>- NHS<BR/>- Education<BR/>- Quangos<BR/>- Industry<BR/>- Bureacracy for the sake of it<BR/>- Empire<BR/>- Subsidies to any industry<BR/><BR/>What little tax must be raised would be best off as low flat tax on income and VAT on all consumption. There's no reason someone on £80k should pay 27 times more tax than a minimum wage worker to enjoy the same public goods.<BR/><BR/>NickAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-19777492575195756792008-05-22T10:05:00.000+01:002008-05-22T10:05:00.000+01:00The gummint has no 'moral' right to 'steal' anythi...The gummint has no 'moral' right to 'steal' anything, in particular not the 'fruits of your labour', but as there is such a thing as 'public goods' (law'n'order, defence, legal system, refuse collection - which together cost less than 10% of GDP and certainly 'add value') these have to be paid for somehow.<BR/><BR/>And LVT is a million miles away from 'stealing the fruits of your labour', it is taxing totally unearned windfall gains. It is the least distortionary tax, and has more beneficial than harmful effects.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-68546765800155828342008-05-22T01:41:00.000+01:002008-05-22T01:41:00.000+01:00Tax is immoral in all forms. It's very difficult t...Tax is immoral in all forms. It's very difficult to make the argument that the government has the moral right to steal the fruits of your labour and give it to someone else.<BR/><BR/>I'd say it's impossible to make the argument according to procedure. The best you can do is make a flimsy "end result" argument that a world with taxes is better than one without.<BR/><BR/>And even then, you are assuming the government isn't just a shameless collection of theiving bureaucrats.<BR/><BR/>NickAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-33667528299012067942008-05-21T22:57:00.000+01:002008-05-21T22:57:00.000+01:00OK, my morality is that I believe in small-governm...OK, my morality is that I believe in small-government free-market liberal economics, and LVT is the tax is least inimical to that. <A HREF="http://www.cooperativeindividualism.org/friedman-milton_interview-1978.html" REL="nofollow">Uncle Milt</A> said so as well.<BR/><BR/>As to how it would work in practice, see <A HREF="http://markwadsworth.blogspot.com/2008/02/rebutting-tory-arguments-against-land.html" REL="nofollow">here</A>.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-34062996316706114482008-05-21T17:15:00.000+01:002008-05-21T17:15:00.000+01:00Mark... if there are no morals in tax, there is no...Mark... if there are no morals in tax, there is no basis for land tax.<BR/><BR/>The only justification for a land tax is that government has an ethical responsibility to promote social mobility. No other justification even begins to hold up to scrutiny. The simple fact that land is not homogeneous is a nightmare that means that taxes, in practice, will be imposed subjectively and in a partisan way which might easily be even more partisan than the current system.<BR/><BR/>I like land tax, but to suggest that it is obviously right independent of religious/political beliefs is an utter nonsense.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-1614528156001386562008-05-21T16:59:00.001+01:002008-05-21T16:59:00.001+01:00This comment has been removed by the author.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-39151461368495513652008-05-21T16:59:00.000+01:002008-05-21T16:59:00.000+01:00Powerman - there are no morals in tax.It is a simp...Powerman - there are no morals in tax.<BR/><BR/>It is a simple observation that increases in land values are 99% unearned - however high you tax the pure land/location value, it does not disourage enterprise, investment and work - the landowner just sits there and does nothing, his land will go up or down in value whatever he does.<BR/><BR/>As opposed to the taxes that businesses and employees in my example have to pay - and you can see the higher rents that they have to pay as a kind of 'tax' - these discourage enterprise, work and investment.<BR/><BR/>Obviously, the value of buildings and improvements should be excluded from any land value tax.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-58845217708666528122008-05-21T14:09:00.001+01:002008-05-21T14:09:00.001+01:00Why should owning land as opposed to any other for...Why should owning land as opposed to any other form of capital asset particularly morally oblige you to fund public services ?<BR/><BR/>Wouldn't it be better to stop trying to control the price of lending, which is the root cause of cyclic famine and feast in the supply of credit?powermanhttps://www.blogger.com/profile/13670631915567128744noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-82611474981833036752008-05-21T14:09:00.000+01:002008-05-21T14:09:00.000+01:00This comment has been removed by the author.powermanhttps://www.blogger.com/profile/13670631915567128744noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-7271515320125095032008-05-21T10:29:00.000+01:002008-05-21T10:29:00.000+01:00Rents are the most stable variable in the property...Rents are the most stable variable in the property market, and increase broadly in line with net earnings, this is because housing is a 'normal' good. <BR/><BR/>So if net wages go up 4% nationally, then average rents will also go up 4% (subject of course to regional variations, but so what? If you live in an area where wages are going up quickly, then the chances are that your wage is going up just as quickly, so you ain't too fussed about your rent going up).<BR/><BR/>Which all gets back to yet another argument for land value tax. If rents go up (because businesses are doing well) then who should benefit - the businesses and their employees, or the people who happen to own land and buildings in which the businesses are carried on and in which the employees live?Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-3568471666055711742008-05-21T09:52:00.000+01:002008-05-21T09:52:00.000+01:00Blimey! Estate Agents being partial to the occasio...Blimey! Estate Agents being partial to the occasional market boosting fib? I'm shocked and amazed to hear that...<BR/>PennyRenterGirlhttps://www.blogger.com/profile/12556830109922784321noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-64157407052092192122008-05-21T02:03:00.000+01:002008-05-21T02:03:00.000+01:00Good post.I've been expecting reduced rents in Lon...Good post.<BR/><BR/>I've been expecting reduced rents in London to kick in from mid-2008 due to fundamentals:<BR/><BR/>- Declining rental population as immigrants return home;<BR/>- Stalled or declining salaries due to recession;<BR/>- End of the "spend half my money on accommodation" meme;<BR/>- BTL speculators deciding they can't flip the apartment so now they must find a tenant to generate cash flow;<BR/>- Overbuilding of 1 and 2 bed apartments. Such as around Vauxhall, Canary Wharf and Stratford.<BR/>- Lack of pricing power due to other costs taking up people's money e.g. petrol and food<BR/>- Ability of renters to "trade down" into flatshares rather than taking the whole thing for themselves.<BR/><BR/>For what it's worth, I've been on a rolling one month contract the past three months so I'm ready to move somewhere nicer when it happens.<BR/><BR/>My anecdotal evidence of rental increases is this:<BR/>- From 1997-2000 I rented a double room in a house-share 10 min from Tooting underground for £404pcm<BR/>- In 2006 I rented a similar room 3 min from Wimbledon Park for £500pcm (i.e. same distance to town, slightly nicer area)<BR/>- Now I pay £900pcm for a two bed flat very near Waterloo<BR/>For me, rent prices have been far below CPI increases for ten years.<BR/><BR/>NickAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-44017484150286074662008-05-20T21:22:00.000+01:002008-05-20T21:22:00.000+01:00Ah, but we have to keep it obvious, you're read by...Ah, but we have to keep it obvious, you're read by estate agents. ;)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-38197950713635540232008-05-20T21:00:00.000+01:002008-05-20T21:00:00.000+01:00Asteve, I got the joke the first time.I might post...Asteve, I got the joke the first time.<BR/><BR/>I might post something on paragone tomorrow.<BR/><BR/>AliceAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-89820545965505837382008-05-20T20:56:00.000+01:002008-05-20T20:56:00.000+01:00LOL @ Alice.Para...gone - as in "no longer a viabl...LOL @ Alice.<BR/><BR/>Para...gone - as in "no longer a viable business!"<BR/><BR/>P.S. Don't worry, Anonymous in Leics, expect negative rent inflation really soon. It's had the greatest increase in weight in the official inflation statistics of any single constituent in the past 10 years. High weights imply falling future prices in the world of inflation targeting monetary policy. ;)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-87487220419660313032008-05-20T19:14:00.000+01:002008-05-20T19:14:00.000+01:00>3.9% here Leics.>3.9% here Leics.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-56372251509093374072008-05-20T18:58:00.000+01:002008-05-20T18:58:00.000+01:00Asteve,you mean I have been spelling Paragon incor...Asteve,<BR/><BR/>you mean I have been spelling Paragon incorrectly!!<BR/><BR/>I am shocked.<BR/><BR/>As for the honesty or otherwise of Paragon, data can often tell you what you want to hear.<BR/><BR/>AliceAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-64901498157400745602008-05-20T18:20:00.000+01:002008-05-20T18:20:00.000+01:00I'd be inclined, first, rather than ask if the fig...I'd be inclined, first, rather than ask if the figures are honest - to ask if they are credible.<BR/><BR/>Would you consider a company that has lost over 80% of shareholder value in under a year to be credible?<BR/><BR/>http://finance.google.com/finance?q=LON:PAG<BR/><BR/>Paragon need a suffix:"e".Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-9481342864391763152008-05-20T17:59:00.000+01:002008-05-20T17:59:00.000+01:00Will paragon be around next year to produce an Apr...Will paragon be around next year to produce an April 2009 index?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-48909715354190725922008-05-20T17:22:00.000+01:002008-05-20T17:22:00.000+01:00Paragon has a commercial interest in promoting the...Paragon has a commercial interest in promoting the idea that rental growth is high.<BR/><BR/>There number should be ignored. It is just investor hype.Anonymousnoreply@blogger.com