Emailed in by Physiocrat, from the comments in an article on FT Adviser headed “The pound’s longer, sharper Brexit shock”:
Paris azawak said:
@ Physiocrat @ RiskAdjustedReturn
I have attempted to follow this bizarre thread in which Physiocrat puts forward an ultra-liberalist hypothesis in which all taxes would be abolished overnight except for a simple land tax.
Would this not simply result in a return to the known ills of completely unbridled capitalism:
(i) the brutal, irresponsible chaos of disproportionately concentrated wealth into the hands of an increasingly small number (a proliferation of Murdochs, Gates, post-soviet oligarchs, etc, behaving like capricious feudal barons as the rest struggle as vassals once did);
(ii) an immediate widening of the disparity between rich and poor (ie the rich get richer and richer, the poor get poorer and fall behind, are excluded, abusively “exploited”, resulting in a surge in social decay and moral injustice (refer Dickens) which costs far more to cure than to prevent (exclusion, poverty, declining health, homelessness, poor education, exclusion, discrimination, delinquent behaviour, crime, &c);
(iii) the decline of infrastructures (especially less “profitable” ones) that taxes pay for in response to specific needs and situations as they evolve and in accordance with government policy as they develop according to evolving democratic majority choices in the interest of the common good.
No company or person enjoys paying taxes.
However, what taxpayers get in return for their fleeting contribute is a very great deal more in return than the sums they contribute since they benefit from the vast heritage or legacy of all that has been constructed and developed by decade upon decade of taxpayers (heath sector, educational sector, law and order, transport and communications, government and public buildings … the list is endless).
The only possible way to levy tax fairly in order to maintain and develop the vast EU wide infrastructures that make the existence of dynamic, modern and efficient trade, services and consumer markets possible is good governance, fair regulation and taxation based on means-testing.
A land tax is haphazard by comparison and relatively easy to distort and circumnavigate (eg as pointed out, foreign companies such as Google generate unprecedented wealth without owning physical land in the markets they derive profits from through a virtual, immediate and monopolistic electronic Platform).
For the same reason, VAT is relatively unfair since it is a flat tax on consumption regardless of means. The poor pay the same VAT as the rich for the product.
Tax should be levied on income/revenue and not exclusively on land ownership as suggested, because
(a) land value varies constantly according to market fluctuation and is impossible to estimate exactly
(b) in an imperfect world [income tax] is:
(ii) proportionate and therefore sustainable;
(iii) supportive of the market whose infrastructure has made its generation possible;
(iv) adaptable according to specific and ever-evolving governmental policies aimed to protect society in the interest of the common good, and so as to avoid the higher social and Financial cost of exclusion and social decay;
(v) ethical, civilizing and therefore progressive,
A land tax would be regressive and mark a return to the Dark Age:
Indeed, history teaches us that in the middle ages, land taxes concentrated power and wealth into increasingly power dynasties who possessed entire fiefdoms and kingdoms; charity was dispensed patronisingly and randomly according to whim or the success of petitioning peasants and vassals.
Not much means-testing there. Just medieval madness, machiavellan machination and civil strife all round (refer Shakespeare).
RiskAdjustedReturn is entirely correct above, it seems to me when he state in a post above that:
“Someone has to pay for the infrastructure that makes the building viable for habitation.”
Well that settles it then, doesn't it?