Systemic Fiscal Reform argues that we are taxing the wrong things, and we're very inefficient at doing so.
By switching to raising the same tax revenue by land and resource taxes, we would not only cut the vast red-tape, but we'd end up cutting our carbon emissions and oil imports... for free!
Tuesday, 8 July 2008
Ricardo's Law - The Great Tax Clawback Scam
A great explanation of how taxes on wages are subsidising the wealth of land owners.
Land Value Tax sounds good at first, but I have some concerns: 1. By placing a burden on land owners to pay an annual tax, it creates a pressure to extract maximum value from the land. Hence there is a danger of increased "development" of precious wild countryside - felling of trees, more intensive agriculture, more housing and industrial buildings etc - with impacts for wildlife and environment. 2. What about farmers? Are they not struggling enough already due to downward pressure on supermarket prices? 3. What about millions of elderly people on state pensions or low pensions who have worked all their lives to pay off their mortgages and who would lose their homes under this system?
A bit taken aback by the idea recently bruited by sfr that LVT, applied directly ,is stealing.The whole tendency of past and present Georgist argument is that landowners are enriched by the efforts of the whole community,without any contribution by the landowner and that LVT is therefore merely a repayment of adventitious capital gains which it would be dysfunctional for landowners to keep.This argument has been strengthened by Keynesian demand management which has first put up house/land prices without stimulating goods and services to the max. It is clearly necessary to block new credit going into land to make Keynesian measures work.I made a half-arsed attempt to rebrand LVT as Land Value Repayment to side-step this problem. See Co-operative Invidualism alphabetical index.
SFR is the idea for this and future centuries. SFR offers a way for the free market to operate so that the best economic choice will also be the best sustainable choice.
To do away with the hassle of taxes imposed on 27 million people, billions of VAT transactions, Council Taxes on millions and all the others would be incredibly empowering for all of us. To have an energy market which operates to produce a sustainable economy without need for legal restraint would remove the hassle for the producers also.
A Citizen’s Income to ensure that everyone had an equal choice as to how she or he benefited from a sustainable basic consumption of our common heritage of natural resources, just as we consume air, sunlight, landscapes etc. as of right.
Two important comments.
1 LVT is a tax on the development of a natural resource by human activity, which generally is good or at least profitable. It should be replaced by a tax on the resource consumed, i.e. a tax on the owners of land to ensure that the Land is put to a profitable purpose; released for another body to use it or for the community at least gets the tax paid by the owner. Such a tax would also apply to the use of land for roads, airports, seaports, houses, farms etc. Of course the tax would be paid by the final consumer of roads, airports, seaports etc. which would be as near fair as possible.
2 The Resource tax is vague in that it seems to be based on Carbon ‘something’. The resource is Energy in all its forms. Solar, Hydro, Nuclear, Gas, Coal, Wind, tide, human, aninmal etc. and the tax rate should be per unit of ‘PRIMARY’ energy converted. E.g. 15p/KwHr. This would automatically lead to a conservation of the energy used in producing, processing and distributing useable energy. For example: At present gas is ‘flared’ (wasted and produces CO2) because that is the cheapest way to control pressure fluctuations, CHP and micro-generation are not widely available because the waste heat from power stations and grid losses are cheap enough to waste. If the primary energy consumed was taxed, the market would ensure that the best overall method would also be the cheapest. Because ‘renewables’ consume less PRIMARY energy they would automatically be taxed at a lower rate than other forms of energy, and even if more costly in financial terms to produce, would be cheaper for the final user. The market would ensure that the best economic choice would also be the best sustainable choice.
4 comments:
Good site, I've dropped a link on my hugely-popular blog.
Land Value Tax sounds good at first, but I have some concerns:
1. By placing a burden on land owners to pay an annual tax, it creates a pressure to extract maximum value from the land. Hence there is a danger of increased "development" of precious wild countryside - felling of trees, more intensive agriculture, more housing and industrial buildings etc - with impacts for wildlife and environment.
2. What about farmers? Are they not struggling enough already due to downward pressure on supermarket prices?
3. What about millions of elderly people on state pensions or low pensions who have worked all their lives to pay off their mortgages and who would lose their homes under this system?
A bit taken aback by the idea recently bruited by sfr that LVT, applied directly ,is stealing.The whole tendency of past and present Georgist argument is that landowners are enriched by the efforts of the whole community,without any contribution by the landowner and that LVT is therefore merely a repayment of adventitious capital gains which it would be dysfunctional for landowners to keep.This argument has been strengthened by Keynesian demand management which has first put up house/land prices without stimulating goods and services to the max. It is clearly necessary to block new credit going into land to make Keynesian measures work.I made a half-arsed attempt to rebrand LVT as Land Value Repayment to side-step this problem. See Co-operative Invidualism alphabetical index.
SFR is the idea for this and future centuries.
SFR offers a way for the free market to operate so that the best economic choice will also be the best sustainable choice.
To do away with the hassle of taxes imposed on 27 million people, billions of VAT transactions, Council Taxes on millions and all the others would be incredibly empowering for all of us. To have an energy market which operates to produce a sustainable economy without need for legal restraint would remove the hassle for the producers also.
A Citizen’s Income to ensure that everyone had an equal choice as to how she or he benefited from a sustainable basic consumption of our common heritage of natural resources, just as we consume air, sunlight, landscapes etc. as of right.
Two important comments.
1 LVT is a tax on the development of a natural resource by human activity, which generally is good or at least profitable. It should be replaced by a tax on the resource consumed, i.e. a tax on the owners of land to ensure that the Land is put to a profitable purpose; released for another body to use it or for the community at least gets the tax paid by the owner. Such a tax would also apply to the use of land for roads, airports, seaports, houses, farms etc. Of course the tax would be paid by the final consumer of roads, airports, seaports etc. which would be as near fair as possible.
2 The Resource tax is vague in that it seems to be based on Carbon ‘something’. The resource is Energy in all its forms. Solar, Hydro, Nuclear, Gas, Coal, Wind, tide, human, aninmal etc. and the tax rate should be per unit of ‘PRIMARY’ energy converted. E.g. 15p/KwHr. This would automatically lead to a conservation of the energy used in producing, processing and distributing useable energy. For example: At present gas is ‘flared’ (wasted and produces CO2) because that is the cheapest way to control pressure fluctuations, CHP and micro-generation are not widely available because the waste heat from power stations and grid losses are cheap enough to waste. If the primary energy consumed was taxed, the market would ensure that the best overall method would also be the cheapest. Because ‘renewables’ consume less PRIMARY energy they would automatically be taxed at a lower rate than other forms of energy, and even if more costly in financial terms to produce, would be cheaper for the final user. The market would ensure that the best economic choice would also be the best sustainable choice.
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