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Ok, I get economic rent (most of my academic study is in economics and I would consider myself a classic liberal), but my question is "exactly how through policy so you implement a levy on unearned income"?
I agree with you about rent. Today's wealth amongst the elite is acquired through a false bubble in the stock market; created by QE and now three quarter trillion dollar bond purchases by the Fed. The basic laws of supply and demand have almost gone out the window in today's global financial markets.
Another huge problem is in discourse itself. You will see posts above railing against capitalism itself, or arguments on the other side about "rich people". Neither are correct and they allow politics to crate a false argument between two wrongs. Until the issue of unearned income is differentiated from an attack on capitalism we won't even begin to discuss the issues you raise.
Good. You are a classical economist. Forget the stock market for now. Capitalism has its merits and Karl Marx emphasised those plus points. It is the abuse of Capitalism that is the problem. In a high tech world full of resources we still have grinding poverty in rich countries. Marx and others saw this and came up with their own solutions. How is the abuse stopped and a "fair" system implemented? This where there is conflict which has also led to massive wars. The privileged will not give up their privileges without a fight. Karl Marx could not see a solution to this abuse and his solution was simple - abolish Capitalism. Others think differently and know how tom incorporate the plus point of Capitalism into a fair system.
Geonomics. Used in Hong Kong, Singapore, Parts of the US, Australia, etc. The core is:
Land Value Tax (LVT) which is essential and prime
An unrigged free-market
Eliminating speculation on land
Eliminating speculation on the earths resources
Reclaiming "economic rent" - use commonly created wealth for common use
The productive keep all their the fruits of their labours
The biggest portion of "economic rent" is found in land values and the easiest to identify.
The key to understanding is understanding where the value in land comes from:
Land values were socially created by the community -NOT the landowner. This community created wealth is reclaimed to pay for community services which benefit us all.
Private wealth is is kept by the individual who created it - no income tax or sales taxes.
Currently we do the reverse, which produces booms & busts, most wealth is in the hands of a few with a grinding sub-poverty level and world-wide crashes every generation or so.
Production harming Income Tax and all other taxes, Sales Taxes, Property Tax, etc can all be eliminated using LVT. Geonomics goes further and takes into account the land resources and charging for use and extraction. Land is: land and all of its resources, the seas and sea beds and the electromagnetic spectrum. In short, charge for all commonwealth of land and resources usage and extraction, inc the electromagnetic spectrum.
We need to be more productive, less 'disincentivized' and less property obsessed. Land taxes would smooth out damaging housing bubbles and encourage more productive investment.
A Land Value tax would help address the inter-generational inequality between property haves and have nots that was massively exacerbated by the long property booms of 1995-2007
A land tax is easy to collect, hard to avoid, and would help fund the large scale infrastruce investment needed.
For an ultra-capitalist, the rapid accumulation of wealth over the last 15 years, which in property terms amounts to about £2.5 trillion, is making us fat and lazy. Only a wealth tax can sort it out. LVT is wealth tax, or more correctly reclaiming commonly created wealth.
The OECD, the rich nation's think tank, has joined the ranks of Land Value Tax supporters.
Land Value Tax is impossible to avoid - land's location is know to its inch. Land cannot be taken off-shore. The Greek govmt loses 15 billion euros each year due to tax evasion. They are NOT a big govt or country. Taxing land values mean the land cannot be moved off-shore and all tax is collected.
LVT can fund all infrastructure - Hong Kong built a new metro using it. Infrastructure is the basis for economic growth creation - look at London's underground. The economic growth created by infrastructure is not being fully cycled back into funding it - it is being slid down a giant sluice called the land market, draining it away into private hands.
Land Value Tax taxes Wealth not Income. Understand that.
Harmful speculation on land drops when LVT is levied - more will be spent on the structure rather than the land.
LVT will do the opposite and accelerate home ownership - 2/3 of the price of the average UK home is the land not the bricks. LVT will do the opposite and accelerate home ownership.
LVT clears up Derelict buildings - Harrisburg in the USA adopted a watered down form of LVT and cleared up all the derelict buildings. You pay full tax on the land irrespective if a building is on it or not. Currently put a hole in the roof and remove the bathroom and you pay no tax whatsoever, and leave a derelict, eyesore building attracting vandals and vermin. In Fred Harrison's 2005 book Boom and Bust, he points out that landowners who aggressively accumulate land for property speculation in prime parts of the country would face a huge LVT bill. Idle land and buildings would be brought into use using LVT. Harmful land speculation is rolled back.
LVT gets rid of stealth taxes - in its ultimate form is known as the SINGLE TAX. Income tax can be abolished, or vastly reduced.
LVT is reclaiming community created wealth to pay for community services - LVT is not a tax, despite tax in its title.
Full Geoism is one tax the SINGLE TAX - this means no speculation on land and the earth's resources, such as copper derivatives, etc. BTW, a few weeks ago water was made a commodity - water derivatives a have emerged. Geoism would forbid this harmful, speculating, nonsense.
LVT shift tax to families from Idle landlords - Over time, the aim of LVT would be to shift the tax burden off hard-working families and on to idle landlords - as in Hong Kong, where revenues from land taxes keep income tax low, there is no sales tax or capital gains tax, and enterprise flourishes. People keep more of the fruits of their labour.
People overall pay less using LVT - Using LVT, in the UK someone earning £40,000 a year would stop paying around £7,000 in income tax, £1,000 to £2,000 in VAT, £1,600 property tax, up to £11,600 at this point, and any of the transaction charges that fill the exchequer's coffers. No more capital gains tax or stamp duty on property sales or the sale of shares. Instead they would pay a fixed annual sum, to be paid monthly, on the value of their land, which could have a wide range, depending on how much the land is worth.
LVT means you can move to an internal tax haven - Move out of town and work locally, and your overall tax bill could be a fraction of its current total. Buy an expensive piece of real estate in the city centre and you would probably pay more. You can move to an internal tax haven, like in rural Wales or Cornwall where the land values are very low and pay little LVT (recall no property tax, sales tax, etc). The local economy would appreciate the spending income of the "exiles".
LVT is a voluntary tax - you can move to a lower land value area and pay less tax.
LVT does not distort business behaviour - All stays the same. In fact as there is no income tax and sales taxes businesses are slicker, cheaper and easier to run. There are no admin costs to collect taxes.
LVT will Promote Higher Quality Homes & the Construction industry - There are many positive points for wealth creation. A worker keeps all his income and there is a 100% gain for every extra hour worked. If you develop your house, it has only a limited effect on the value of the land, giving you every incentive to modernise and improve the house. Under the Property Tax, increases in house values, as opposed to land values, lead to higher taxes, which is a disincentive to carry out improvements in the first place. Currently we curtail the construction and its associated manufacturing industries.
LVT prevents the rich from clawing back all their taxes
Britain's top earners pay on average £1.25 million in taxes in their lifetime. The people who rent their homes are generally in the lowest income bracket. Over their working lives the poor pay over £0.25 million in taxes. The rich on average pay 5 times more in taxes.
That sounds fair. Doesn't it? But wait.....
Income tax is the more you earn, the more you pay. Called Progressive taxes.
Sounds fair as the richer pay more. But!!! Progressive taxes has exactly the
opposite effect.
Every increase in house value for top earners offsets any tax they contribute. During boom times it's possible to claw back a lifetimes taxes in just three years. Meanwhile...the lowest earners and those who pay rent, pay more overall.
Families on the lowest incomes subsidize the lives of the rich. Is that fair?
Despite all these advantages, there are many powerful forces ready to dismiss LVT as fanciful, not least the property-owning classes who have an entrenched view that their house/land price is a just reward for their labour - which it was not. Community activity created the wealth of their land not them, the landowner.
What LVT campaigners have shown is that the average taxpayer will be no worse off, if anything directly far better off, they will simply pay less income tax and a higher wealth tax. They will also have larger and better homes to boot. Then the improved economy all around will make them wealthier again. A wealthy economy rolls back the state and welfare state reducing the pull of the state. Any surplus economic rent reclaimed can be issued amongst the population via a Citizens Dividend or a guaranteed income issued, which will eliminate many welfare payments and their associated departments.
Once a fair system is in place and the harmful hot spots identified and neutralized (speculation on land and its resources and elimination of monopolies) then we have a firm stable non-volatile base to work from.
In a high tech world full of resources we still have grinding poverty in rich countries.
The privileged will not give up their privileges without a fight.
Ignore the rich. Focus on the bottom
Quote:
How is the abuse stopped and a "fair" system implemented?
Reducing (to theoretical zero) the raw number at the bottom of the pile.
Quote:
Families on the lowest incomes subsidize the lives of the rich.
What an absurdity.
Families in the MIDDLE subsidize the lives at the bottom.
Focus solutions where the problems actually are.
He views poor people as parasites on society to be curtailed and restricted; this is not coming from any sort of position of enlightened rationality (despite his handle claiming otherwise) but rather arrogant elitism.
But I like your proposal OP.....labor should not be taxed so heavily. We have a system where a hard-working doctor pays up to 40% of his income in taxes but an investor benefiting from a speculative real estate bubble is capped out at 15% (not to mention all the tax loopholes available which can shield real estate income from taxation) . This is completely backwards and poor tax policy which encourages rent-seeking behavior and not real productive investment.
As the very few really wealthy control the government in so many ways (think tanks, political contributions, direct bribes) it is not surprising we have a government of the rich, by the rich and for the rich. The rest of us proles are just fodder to be manipulated by the media for their owners benefit.
As the very few really wealthy control...
The rest of us proles are just fodder to be manipulated....
Only if you let them.
It's your choice whether to support yourselves, your fellow workers and your environment
such that you and yours will have the opportunity to thrive or be starved and taxed to death.
Look up American economist Henry George. Winston Churchill, Tolstoy, Einstein were all big fans. Henry George (Georgism) proposed the Single Tax (only one tax, LVT) that fell on land values only. Georgism views that all "economic rent" is to be reclaimed. Georgism is a subset of Geoism. Geoism reclaims economic rent from whatever source: LAND or CAPITAL.
Marx concentrated on CAPITAL. George concentrated on LAND Geoism combines the two leaving the free market to do what it does best.
"George's blend of radicalism and conservatism can puzzle one, until it is seen as a reconciliation of the two. The system is internally consistent, but defies conventional stereotypes."
- Professor Mason Gaffney (US economist)
There is enough commonly created wealth to fund all public expenditure. This mean none whatsoever of penalty taxes on production - income and sales taxes.
Look at videos by Fred Harrison on Youtube. Short and sharp. Superb and many of them.
I agree that labor shouldnt be taxed. Taxation isnt meant to be punishment, but psychologically it feels like punishment. You are taxing people on trying to live, that just isnt right. I say tax businesses and tax spending, but not wages and salary.
I agree that labor shouldnt be taxed. Taxation isnt meant to be punishment, but psychologically it feels like punishment. You are taxing people on trying to live, that just isnt right. I say tax businesses and tax spending, but not wages and salary.
Taxing spending is taxing trade. A no, no. Tax wealth not income, production or trade. But no need to tax anything at all. Just reclaim commonly created wealth to pay for common services. What we collectively produce we use to pay for us. Very simple.
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