Business rates: the closest thing that the UK has to LVT

The following is an extract from by Tim WorstallContributor

We’re coming up to the autumn statement, the government’s laying out of their financial plans for the coming year (the Budget, in the spring, is the details of it all, the statement is the outline as a not entirely accurate but good enough explanation) and various organisations are making plain what they’d like to see in the plans. And the two major business groupings, the Confederation of British Industry (CBI, for large companies generally) and the Federation of Small Business (for small firms, obviously) are making it quite clear that they’d like to see the system of business rates reformed. Rates being the system of taxation imposed upon land and property used for business purposes. The unfortunate thing about their plans is that other parts of those plans show exactly why business rates should not be reformed.

Business rates are the closest thing that the UK has to land value taxation (yes, this is Henry George all over again: and just because an idea was promoted by a Dead White European Male doesn’t make it necessarily wrong) and is thus a good tax: it’s also the least distortionary tax possible. So, we’re predisposed to like it and think it is good public policy.

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