Louis Christopher of SQM Research – aka Black Dragon – has seen through the maze of deceit to properly identify the national interest and yesterday published Five Solutions to Housing Unaffordability Crisis.
His prescription is simple: cut immigration, grow in the regions, exchange stamp duty of land tax, cut construction costs and phase out negative gearing.
Prosper sees his call for tax reform as the most important. He says:
3. Cut stamp duties for all and introduce broad-based land tax
”This is such a no-brainer but it would be very difficult for the state governments to give up those juicy stamp duty receipts. Yet by removing stamp duties and introducing a broad-based land tax, it would make existing property owners far more mobile and help ensure easier entry and re-entry into the property market.
“State governments would also have far more stable, predictable revenue streams instead of the boom-bust cyclical nature of their revenue now. Perhaps during the next housing downturn, state governments just might be “convinced” of this argument.
Exchanging Stamp Duty for State Land Tax would be a big step toward the freedoms the so-called neo-liberals claim they want – mobility, choice, dynamism and opportunity for all.
Ground rents are an ideal tax base. They are created by our aggregate activity and investment, not by individual landholders.
Land is an ideal base to fund the infrastructure that creates land’s embedded value. Win-win.
Farmers have nothing to fear from land tax. Agriculture is a low-value land use on a per square meter basis and a properly constructed land tax will leave efficient agriculture unaffected.
Farmers should be livid at council rating on capital improved value that taxes every shed, fence, pipe and dam that farmers add to lift the productivity of the raw land. They should also be cranky about the rural recreational holders and the landbankers free-riding on the deep consideration we rightly give to genuine agricultural businesses.
And anyone who finds paying tax repugnant can not own land – this is the ultimate voluntary tax.
Untax labour, untax capital, tax the land.