Written Evidence submitted by John McCone [LVC 001]

John McCone is the author of “The Countryside Living Allowance”

http://www.blurb.co.uk/b/8487802-the-countryside-living-allowance

A book which discusses how, by localizing a citizen’s income and linking it to a voluntary system of Land Value taxation, poverty can be reduced and funded by nothing more than the uplift of land Values. Depressed areas of Britain can be rejuvenated in this way and housing pressure in London can be greatly eased.

What new methods may be employed to achieve land value capture and what examples exist of effective practice in this area, including internationally?

Localization of benefits as a means to lift up Land Values and rejuvenate depressed areas In U.K.

If a government benefit was limited to a locality then that would correspondingly raise rents in that locality. Land in the countryside is typically £10,000 -20,000 per acre. If the government taxed the site rent (or roughly 4.5%1 of the site value minus bricks and mortar/improvements) of rural land valued over £40,000 then most farmers would be exempt - as their land is worth less than this – and thus unlikely to complain. If the government then both granted planning permission to build houses in this area and made residents who moved into that specific locality understand that they will qualify for a basic income of £5,000 conditional only on them living on land subject to LVT provided they agree to pay land value tax equal to the site of all their U.K. Land holdings then site rents would shoot up.

Consider two towns, Towns A and B. Both are in equally desirable locations where the cost to rent is higher then the interest rate time the cost of construction (i.e. the location has a high value), both are located 10 miles apart so that residents can freely move between them, but the residents of Town A qualify for a £5,000 a year basic income but the residents of town B don’t. What will be the difference in the average per capita rents that tenants in these two towns will pay? Very clearly, rents in town B will, on average, be £5,000 a year cheaper than rents in town A. Residents of town B will move to town A so long as the rent premium is less than the basic income.

Thus the Land Value Tax receipts of new towns whose residents receive basic income will equal:

The basic income plus the per capita site rent of towns of similar value that are not in receipt of basic income.

Thus new towns in receipt of basic income that are well sited whose residents must pay land value tax will become net sources of tax revenue.

If the cap on land values is set appropriately, farmers will not complain as the capital value of their lands will double, but the government will collect the lion’s share of land value appreciation.

Localising basic income to areas subject to land value taxation will eliminate poverty in these targeted areas, kickstarting their economies causing site values and corresponding governmental land tax receipts to soar.

January 2018

1 Wadsworth, Valuations and Potential LVT Receipts http://kaalvtn.blogspot.co.uk/p/valuations-and-potential-lvt-receipts.html