Letter: Tax land values not income

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The Independent Online
THAT THE Government is losing revenue through loopholes in the tax system is only to be expected, given that it is based on the taxation of 'income' and 'earnings', which are concepts that defy firm definition ('Ingenious but legal - the advisers on tax avoidance', 19 December).

There is no consistency even on a simple matter such as deducting the cost of travelling to the job when calculating earnings. If you are self-

employed, you do but if you are working for someone else you don't. As a means of raising public revenue, the present tax system is like using a string bag to collect puffs of smoke. It is a structure of loopholes.

The only form of tax which is proof against avoidance and evasion is a property tax based on the annual rental value of land. Because land cannot be hidden or spirited away to a tax haven, such a tax system is solid.

A land value tax of this kind was included in Labour's 1931 Budget, but, unfortunately, the legislation sank with the fall of the government. Now that the Labour Party is conducting a review of the tax system, surely it should examine this idea as a first priority?

Henry Law