Good grief!

Offered an opportunity to innovate, to alter the local taxation system, this lot have decided to do exactly the wrong thing.

But the Government clearly considers this approach to be more
progressive. Peter Hain, the Northern Ireland Secretary, informed the
Labour conference that it was "a fairer system of local taxation, based
on the real value of your property". He told a local newspaper: "If you
have a great big house, then it is right that you should pay more."

That’s a wealth tax by any other name.

At present, the progressive principle does not underpin local taxation.
In theory, it is meant to pay for specific services, though the
assumption is made that a larger house will use more services.

That’s what it’s supposed to be, a charge for services. (As, although many would argue about this, all taxation is supposed to be.)

Now there is a known and obvious model of taxation which is entirely fair. Land Value Tax. Yes, the old Henry George thing which all sorts of people, up to and including Milton Friedman, think is a great idea.

You don’t tax the improvements that people make to their land. You tax the improvements that both society and other people have made to the land around it. For the value of a plot is largely socially created to why shouldn’t society tax some of that wealth creation? The important point though is that the tax is applied to the value of the plot of land, not the buildings or improvements upon it.

This would mean that a cottage on an acre of gardens would pay the same tax as a block of flats on an acre (minus the difference in values created by the different planning permissions) next door. The value of an acre in Kensington Gardens is greater than that in the same borough but not in K Gardens, so the tax would be higher there.

I still find it amazing that NuLab have this unerring instinct to take exactly the wrong decisions. If there is going to be a huge shake up of local government taxation, with all the trauma, complaints, rises in costs and so on, why not actually take the correct decision and tax Ricardian land rents? Why go through all this grief to impose the wrong policy?

We could say the same, of course, about health, education….