Getting into the LVT – never heard of it down here in Portugal until Ricardo Salta, with whom I’ve recently been around in a couple of projects, challenged me to enter a campaing on its defense – and though it sounds ok I must say I don’t find it (at least until now) to be so overwhelming or capable of providing the economic salvation and income or wealth equality – I’m more concerned with human capabilities than income to be fair – its proponents fiercely defend. In fact, the rhetoric behind it reminds me to a certain extent of Ricardo and Smith most of the times. Its defensor argue that LVT is mostly a matter of justice and, as Edward Miller (click to read his well received article on the subject) wrote me in a short and very introductory exchange of words, «concerned with the distribution of wealth rather than just bean-counting for the elites». This is a good point (and that’s why I inappropriately use this very unauthorized quote) as it shows that LVT proponents are far beyond conventional economics, opting instead for a political economy inspired approach. Although being pointed out as a single solution for all economic deseases, the LVT sounds more like being integrated on a wider group of measures to be implemented by a developmental state seeking to (1) collect more money, (2) promote greater income redistribution and equality and (3) doing this while generating minimum economic distortions. Both conventional market and state failures prevail. In fact, concentrating all (increased) revenues on a single tax offers plenty of rent-seeking opportunies for public officers. Nevertheless, this can be a powerful tool to fight massive speculation on the imobiliary markets and to target the proliferation of obsolete houses and land, mostly on major urban centers, that should be in the hands of those more capable of generating value from it or simply in greater need.
LVT proponents argue that despite the wide range of reforms needed in order to undermine priviledge, none will be effective until the land question is adequately solved. Under the current conditions, they say, all other reforms – fiscal reforms I presume – will only contribute to increase landlords’ rents. That’s a hell of a statement uh? More words can be expected on this topic in the upcoming days since I have promissed a decent article to Ricardo. Don’t hesitate to send me relevant info. Discuss Edward’s article here