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On 7th July Rt Hon Vincent Cable, chief economic
spokesperson for the Liberal Democrat Party gave the annual lecture to
the Institute of Fiscal Studies. Dr. Cable gave an insightful review of
the current economic situation. Amongst his proposals for
counter-cyclical measures was a transfer of business rates from
property to land.
"In principle it should also be possible to apply property taxes
in a countercyclical manner. Stamp duty already operates counter
cyclically since falling house prices lead to lower duty paid and lower
rates.
However, unfortunately, Britain does not have a national tax based on
current property values, of the kind operating in Denmark, based on
annual revaluations.
One useful counter cyclical measure would be to shift the tax base of
business rates to land values – including unused land – increasing the
cost of holding land banks in booms but easing the burden in slumps
which are transmitted to land prices."
For full text see http://www.ifs.org.uk/docs/vincent_cable.pdf
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