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Wednesday 17 February 2021

Taxes through the Ages: An entertaining tale from Dominic Frisby

A compelling case for LVT

Dominic is a lively explainer. Previously I read his 2014 book on Bitcoin. This time he’s doing the story of taxes right back to the dawn of civilisation. 

But it’s what Dom has to say about Money and Land that is most interesting. Yes, Land Value Tax crops up right at the start when he tells us why Hong Kong is such a low-tax entrepreneur’s paradise.

But on p144 Dominic pulls out a real gem

“Many people blame high house prices on lack of newbuild, and population growth. But in the 10 years between 1997 and 2007, though the population grew by 5%, the housing stock grew by 10%. (ref to Positivemoney). If house prices were a simple function of supply and demand, they would have fallen slightly over the period. Instead they tripled.

“Mortgage lending over the same period went up by 370% — a commensurate amount. It was the increased supply of money, through the issuance of debt, that caused house prices to rise.”

Brilliant! He gets it!

Only in the last chapter does Dominic make the case that the only way tax can work in future is by Land Value Tax. Like me, he doesn’t like this label.

Instead he calls it L U T — Location Usage Tax. [I’d coined Plot Value Charge for the same thing].

There follows an impassioned, but pretty standard case for LVT/LUT/PVC.

Missing, sad to say, is the By What Means?  Question. How do we get there? Where do we start? The 1909 People’s Budget was shot down by politics.

“But this is Utopia” says Dominic. [No need to answer these difficult yet vital questions!]

A highly commendable effort. A great read, with some real gems.

Read it, you’ll like it.

Full ref: Frisby, Dominic (2019) Daylight Robbery: How tax shaped our past and will change our future UK; Penguin Business