I believe very strongly in the principle of land-value/rent taxes/charges. However, I would like to add the following comments to the current discussions on this topic.

Firstly, it seems to me that rental value of each plot of land has been capitalised into a 'market' value for that plot of land, and that land-value/rent taxes/charges effectively transfer that 'market' value from the 'owner' to 'society'. For example, if the 'going rate of return' on 'capital' was 5% per annum, and the gross rental value of a plot of land was £5 per annum, then:

- If a tax of £0 per annum was levied, so that the net rent was £5 per annum, then the 'market' value of that land would be £100, and the 'market' value of the tax/charge would be £0.

- If a tax of £2 per annum was levied, reducing the net rent to £3 per annum, then the 'market' value of that land would be £60, and the 'market' value of the tax/charge would be £40.

- If a tax of £4 per annum was levied, reducing the net rent to £1 per annum, then the 'market' value of that land would be £20, and the 'market' value of the tax/charge would be £80.

- If a tax of £5 per annum was levied, reducing the net rent to £0 per annum, then the 'market' value of that land would be £0, and the 'market' value of the tax/charge would be £100.

Unfortunately, those who benefited from most of the historic rises in 'market' values have long since sold up and moved on, taking their 'profits' with them. Most current 'owners' paid a very high proportion of the current 'market' value when they 'bought' the land; often with loans amounting to a very high proportion of the current 'market' value. Thus, land-value/rent taxes/charges on pre-existing land-value/rent would be simply a form of nationalisation without compensation. Thus, in turn, I believe that discussions about land-value/rent taxes/charges must distinguish very clearly between the following:

1. Propositions for land-value/rent taxes/charges on pre-existing land-value/rent whould be a form of nationalisation without compensation, and should be considered to be a non-starter.

2. Propositions for land-value/rent taxes/charges on the value added by future communal investment, and/or changes to planning permission for private land-use, should be considered to be a head-bangingly obvious good thing.

Secondly, it seems to me that it would be constructive to rename Land-Value Taxes (LVT) as Land-Rent Charges (LRC):

1. Gross land-rent would remain unaffected at £5 in the example above, whereas the land-value would be reduced in proportion to the implementation of the tax/charge (it is instructive to try to imagine at what rate one would need to levy a land-value tax to raise £5 per annum tax from a land-value of £0). Thus, I believe that administration should be aligned to land-rent rather than land-value.

2. The whole 'moral' justification for land-value/rent taxes/charges is to keep/return (most of) the value added by communal and collective initiative in/to the public domain. Thus, I believe that administration should be characterised as charges (for utility received from the community) rather than as taxes (levied in Robin Hood style from 'victims', without any utility received in return).

Chris Huhne (now a Lib Dem Leadership candidate!) agrees with you. He says only tax increments in value after 'Year zero' initial valuation. I disagree. There are plenty of examples of taxes that come in without much warning and make a nonsense of recent investments in good faith. Also it means the tax doesn't cover its start-up costs for several years. (Sorry, I can't easily stop using the T-word!)

My answer is to levy the tax at a low rate initially, ensuring it replaces other property taxes (where much of the revenue is in effect land-rent), also to have a tax-free "Homestead Allowance" for owner-occupiers, who have invested a huge proportion of their savings in their home. HA would be set at a high enough rate so that almost anyone now paying Band C council tax would benefit.

The losers are overwhelmingly people who are investing in property commercially, not personally - and those who possess vacant and under-used land and property.

Tim, surely all taxes are appropriation without compensation. In particular any property tax of any kind will have the sort of effect you describe. And any reduction in property tax (such as abolishing council tax) is therefore a windfall handout.

You start off at a £2 tax - a 40% rate. This is a high rate. I would be against high rates largely because of the reasons you give.

But a low rate, and on land, not the whole property, is a different proposition.

Following your charge argument, perhaps it should be called the Community Charge! Spin.

I too disagree with the fundamental idea that only future incremenets should be taxed. If you are reducing other taxes at the same time as implementing LVT and the overall tax bill for a household is roughly equivalent to what it is now it makes little difference.

Only around half of the houses in private ownership have a mortgage on them at present. The average lifetime of a mortgage is eight years - indicating that households on average either move or remortgage that often, liquidating the asset in the process in some form or another.

A low rate of tax steadily increasing (and wiping out other taxes as it goes) would be enough to prevent negative equity, though personally (and theoretically) I'd prefer to go in with a high rate and compensate households who find themselves in such difficulties with a capital hand out of newly created money - helping to eradicate a whole bunch of debt created money at the same time.

Oh no. Not the funny money argument, please.

"Newly created money" would seriously upset monetary policy, which is, honestly, not a tool of our lizard oppressors.