Dr. Tom McDonnell:

Let me refer to the debate on the local property tax versus the site value tax. Let us be honest that we are talking about a land tax. It is essentially the optimal form of taxation; there is no dispute about that. However, it is also true that is has very rarely been applied around the world. There are administrative-complexity and data-gathering issues. It was really seen as a kind of medium- to long-term measure. There was recognition that the local property tax is a very successful and well-designed tax. It already deals with many of the issues that people talk about in the media, including that of low-income and high wealth. Looking at the distribution of wealth, even if household main residences comprise only a minority of assets of the top 10%, the assets of the latter are so enormous compared to those of everyone else, certainly beyond a certain point, that they would still be paying the local property tax disproportionately. Even though it is not progressive in the sense of income, it is, in a perfect sense, very highly correlated with income. Our feeling on the local property tax was that there were only two flaws. One was that populism and a lack of strength at local authority level were leading it to being undermined and debased. This was leading to the second problem, which was that it was way too low. Of course, the issue is the political economy. The property tax is so politically toxic at elections, even though it is so modest by comparison with income tax or VAT. Given what a renter is paying every year by comparison with the local property tax, it is a joke that-----