The future for local taxation.

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Labour leadership contender Iain Gray has declared himself to have an open mind on local taxation, and suggested talks with us about land value taxation (LVT). The Green group will of course be happy to have this kind of conversation with him, or with whoever does come out on top. If Cathy wins, we'll also be happy to talk about fixing the railways. The door also remains open to the other parties, of course.

The mere idea of talking to others in Parliament shows progress in Labour's thinking. One of the Holyrood pack told me that Wendy's strategy was simply to sit back, come up with no alternatives, and let the SNP/Liberal local income tax proposals fail. That's irresponsible politics - imagine the cost of another failed local tax - and it's good to see signs that Labour are starting to be a bit more constructive. 

The arguments for LVT will appear here another time, but given today's developments, the party-political cart will be considered before the policy-wonk horse. So, some history for the anoraks..

Ever so gradually, the arguments for a Scottish LVT have been taking root in Holyrood. In 2003 a motion from Robin Harper was passed (stirring speech here) which committed Parliament to "considering and investigating the contribution that land value taxation could make to the cultural, economic, environmental and democratic renaissance of Scotland." Not that such consideration and investigation ever happened, but y'know, still progress.

Voices in Labour back it, and some Tories too. It's also Liberal party policy, although you wouldn't believe that to listen to their MSPs talk only about local income tax. It's a federal policy, see, and federal policies only apply in England, which in a peculiar way recreates the West Lothian question on a smaller scale. Do they even understand what federalism means? Anyway, I digress.

In 2006 the SNP's Rob Gibson put down a motion which regretted "the lack of a land value tax in Scotland". Signatories included now-Ministers Fiona Hyslop, Kenny Macaskill and Adam Ingram, as well as former awkward squad members Alex Neil and Christine Grahame.

Earlier this year Parliament approved Green wording on local government finance which committed Ministers to consideration of "fairness, local accountability, the need to reduce tax avoidance and the wider social, economic and environmental impact of any proposed system of local tax reform on communities across Scotland". 

Try testing other local taxation models against that list, starting with a local income tax which exempts share income. Patrick Harvie is on YouTube explaining the significance of that vote.

With Iain Gray at least tentatively on the bandwagon, the wind is really blowing in the direction of LVT. Here's a prediction: Council Tax will be abolished during the lifetime of this Parliament, and will be at least partially be replaced by a form of land value tax. Churchill would be pleased.


the eventual version of LIT is bound to include investment income, it is easy to apply LIT to investment income. It would be best if there is an exemption for the first certain amount to encourage saving. We pay for all national collective services by income tax, NI, duty and VAT, all based on either income or spending. Local services can be the same.

LVT is another how long is a piece of string tax requiring a complex administration and with the ability to generate appeals. It is also easy to avoid by certain classes. All sorts of evasion schemes exist and it generates lots of finance for the professional advisers. Also in Scotland the potential for income is greatly reduced due to the population to land ratio.

I'm still getting used to this country... I thought you were talking about leadership in Westminster, and wondering how everyone knows who the contenders are... this after hearing that Miliband has already chosen his Chancellor...

How on earth (pun intended) can one avoid a land tax? That's nonsensical. LIT is much more easily fiddled with and hidden.

Check out a land value map, from anyplace in the world - the Australians have good ones - and you will see who indeed owns the value, and who does not.

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