‘Land value tax’ would be fairer, says Mark Drakeford AM
Welsh Labour AM Mark Drakeford has given his backing to a “land value tax”.
The Cardiff West AM’s championing of the tax comes as the Silk Commission investigates giving the Assembly new fiscal powers.
In an article for the Institute of Welsh Affairs, Mr Drakeford argues land should “should belong to the people” and this would be a progressive tax.
The TaxPayers’ Alliance yesterday warned that the tax was unfair and denied that it was progressive.
He writes: “In Wales – the part of the United Kingdom with the longest tradition of radicalism – we have no difficulty in understanding the notion that land is a resource we share in common, a true ‘common wealth’. As a result of being fixed and fundamental, it should belong to the people.
“Those who have the privilege of ownership should pay something back for that privilege, through a Land Value Tax. Once this is understood and agreed, the serious work of detailed investigation of its pros and cons and its practical implementation here in Wales can begin.”
Mr Drakeford argues that a land value tax has advantages over council tax, stating: “Of course, it would be an alternative to existing forms of taxation, not an addition to them. At its most radical, a land value tax would allow for the abolition of council tax, business rates and stamp duty land tax.
“Instead it would introduce a levy on the annual rental value of every site in Wales including all residential, commercial and farming land, as well as privately owned estates.
“A major virtue of the change would be that land value tax is a progressive tax. On the other hand, council tax is regressive because it imposes a lower burden on the rich than the poor – and also a lower burden on rich places than poor places. The land value tax reverses that proposition.”
Mr Drakeford said the London Underground Jubilee Line extension from Green Park to Stratford is estimated to have raised property values by £10bn.
He writes: “If only a small part of this windfall had been taxed, it would have paid for the extension very easily.”
However, Robert Oxley, campaign manager of the TaxPayers’ Alliance, said: “The land value tax might look like a simplification of the tax system but it’s neither fair nor progressive.”
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