- Replacing distorting taxes that cause deadweight loss and increases in prices
Examples required to discuss any further.
Easy:
GST adds 10% directly onto the prices of all goods and services. Higher prices penalise consumption and distort decisions to "work, save and invest" - all that jazz.
Big distortions occur from taxes like:
stamp duty which penalise people and businesses relocating to more efficient locations (e.g. where their jobs are)
payroll tax which penalises employment (effectively taxes wages which reduces work incentives)
insurance taxes which drive up the costs of insuring and thus results in under insurance
Any tax which falls on labour or capital carries deadweight loss from bad distortions which result in lost economic output
- Reduce barriers to entry for the most productive users of common resources and natural/artificial monopolies, by reducing/eliminating capitalised asset prices and replacing them with annual tenders or rental fees
- Improving productivity through the above process
Is this the one you talk about Land Value Tax on?
Land Value Tax is only a tax on land rents. Other taxes on monopoly property rights are also required in other sectors of the economy which produce rents. These are examined in the attached report.- Ensure equality of opportunity, by requiring this unearned income to be socialised and distributed either to the people or the people's trustee - the state
I find the equality of opportunity to be a weasel phrasing (as in weasel words) as not everyone can afford equality of opportunity of access to information that makes the equality of opportunity available. I do note that you invoke the possibility of the state getting involved which may or may not remedy this.
When I refer to "equality of opportunity" I specifically refer to the equal opportunity to all natural resources and privileges that only some currently enjoy. At the moment we have a system which uses monopoly property rights to exclude others from natural opportunity, without compensating the community. If people are to be excluded (which in the case of something like land ownership is more efficient than the tragedy of the commons), they should be compensated. This compensation comes in the form of eliminating all financial advantages which accrue (rent) and redistributing them.- Reducing wealth and income inequality
No issues there but there are also other methods.
No other methods do so without distortions or improving efficiency. All the evidence points to inequality coming from rents and monopoly property rights.
www.vox.com/2015/4/1/8320937/this-26-year-old-grad-student-didnt-really-debunk-piketty-but-what-he
Regulating them (with things like rent control) are ineffective and inefficient, I shouldn't need to point out the flaws with those policies.
The solution is either abolish monopoly where practical, collect the rents, or nationalise the monopoly.
- Ensuring all Australians receive their equal, natural right to the commonwealth. This includes equality in landownership by making all Australians equal landowners through socialisation of land rents (but not the individual titles)
- Repressing land price inflation and inflation in other asset prices tied to capitalised economic rent
Or are these the ones that you talk about Land Value Tax on?
Land Value Tax is once again, only one type of tax which collects specifically land rents. There are still resource rents and rents from other monopolies which are not captured in a LVT.
- Improving land/housing affordability
Just get all of the people out of the metropolitan areas, say by 200-300kms inland and that's not a problem. I do accept that it is only an issue because of speculators whom are few in numbers. This could also be addressed with direct regulation of some sort.
This misunderstands the existence of rent. Rent exists because of competition for superior land (or any monopoly property right). LVT would incentive this decentralised approach by shifting the tax burden to high value urban areas and away from the boonies. If you want to pay less land tax, you just move out into country. If you tax land high enough, the price falls to zero. The affordability improvements don't come from this though, they actually come from a concept of Ricardo's Law. Under Ricardo's law, real wages are determined by the wages which can be earned on marginal land (land with no rent). The way to improve real wages relative to rent is to reign in the margin, which is achieved by fully utilising the best land first, which is what a LVT accomplishes. I recently mentioned this concept on FB on one of your comments:
www.facebook.com/groups/520023444868205/permalink/589601571243725/?comment_id=589940514543164&comment_tracking=%7B%22tn%22%3A%22R%22%7D
- Provide a mechanism of Land Value Capture for financing state/local infrastructure, and preventing unearned windfall capital gains to landholders at the expense of tenants, workers, businesses etc. (reducing/eliminating the need for capital gains tax)
I followed the link, gave it a scan, didn't understand a word, it needs to be broken down into many more bite size pieces.
I will have to do a more thorough explanation elsewhere at a later date.
Basic concept:
- Govt spending on infrastructure boosts Land Values
- Currency issuer can use LVC to prevent this land price inflation which would advantage landholders over tenants i.e. tenants pay higher rent regardless, so to not gain an unfair advantage landholders should pay higher rates on land value.
- This also creates additional fiscal space for more infrastructure etc
- At the state level it provides financing for repaying bonds... You know what, I'll just let Bill explain it:
bilbo.economicoutlook.net/blog/?p=32302
- Providing an efficient, equitable and stable revenue base for currency using state and local governments
Well I know this one can but does not necessarily have to include a Land Value Tax
How many revenue bases can you name as a substitute? GST? Nope. Income tax? Nope, we got rid of that at state level for good reasons.
Other existing state taxes? Nope, all of them damaging and inequitable. Only limited rent collection from resource royalties and Casinos/gambling are the exception.
A primer for examples of collectible economic rents in Australia can be found in a 2013 report by Prosper Australia here:
Total Resources Rents of Australia (Attached to Thread)
A general overview is also available on Wikipedia
I'm familiar with Prosper Australia - By any chance, do you know if Steven Spadijer is still involved?
Never heard of him. The only people I've meet in the office are Catherine Cashmore, David Collyer, Karl Fitzgerald and Emily Sims.
Although I'm not familiar with everyone on the board, so I couldn't be certain.Often the taxation of economic rents begins on the bottom - say the person with their own home and one or two rental units (yes that's economic rent too I'm not mixing them up - eg. negative gearing) - and then it stops. It should start at the top with adjustments to the Mineral Resource Rent Tax and then work it down to or towards the bottom as necessary.
Taxation of rents hits the top the hardest. It's where all the inequality is coming from and how wealth and income is being siphoned off. Real capital (buildings, robots, computers, cars) generally is a distraction and a sideshow, since in reality it is subject to depreciation and elastic supply (competition) - whereas monopoly property rights are not and cannot.
evonomics.com/dont-ditch-capitalism-tax-extractive-side-effects-fuel-growth-barnes/
www.theguardian.com/commentisfree/2016/aug/30/private-tax-is-the-great-unspoken-of-neoliberal-philosophy-and-the-rich-are-the-winners
