I've found that with economics, the 'answer' is usually quite simple, it's the explanations that are frighteningly long-winded. This doesn't mean that simple or obvious answers are always the correct ones, although in some cases they are.
Take for example, the responses to my Tax survey Part 3, if you accept that states have to raise money by taxation (and even the smallest state that provides 'core functions' only and spends less than ten per cent of GDP) then it is better (or 'less bad') to tax "The use of limited or pre-existing resources" than it is to raise taxes from "Wealth creation by individuals and businesses", and seventy-six per cent of people who responded agreed.
I do wonder what arguments there are to say that taxing "wealth creation" is preferable, unless of course the twenty-four per cent who voted for it know where this is heading ... hence the title of the post.
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OK, the final round is general knowledge: What did Milton Friedman say was the "least bad tax"?
Vote here or use the widget in the sidebar.
Friday 22 May 2009
Oops, I've been rumbled
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8 comments:
He said;
'Anyone who uses simplistic arguments and single lines from whole interviews to justify taxes for socialist ideas such as CBI will regret it when I arise from the grave and pluck their eyes out. Bwa ha ha ha ha ha'*
Coming in next weeks poll ~ 'Are you a lesbian, or do you like cake?'
* He may not have actually gone 'Bwa ha ha ha ha' ~ it was a long time ago, and my memory is not what it used to be.
Did he?
MF's proposals for replacing welfare system with negative income tax are just a slightly different version of CBI and in no way incompatible.
I'm not doing simplistic arguments, I'm just giving the answers, which happen to be simple.
Me thinks you missed my point. However, I'll bite. Creating a logical argument based on only allowing people a limited set of answers to a question is flawed, thus my poll 'joke'. I still maintain that the various tax / govermental simplfication proposals you have outlined over the months are those that would result in a much larger state than MF would have supported. However, that is in some respects a side issue.
I'm not against LVT in principle, I'm just not a Georgist fanboy. There are problems with LVT, as there are with any tax system ~ tax being, basically, theft through the threat of violence. I am uneasy with georgists who advocate that LVT is the 'best' tax ~ it certainly isn't in some respects ~ this article outlines some of the problems much better than I could.
Personally, LVT as a means of local tax generation works for me. As a single tax, it would be appauling and would, in fact, generate a whole new class of people recieving 'un-earned' benefits and massive state control and potential for corruption.
Mr S, everything I have ever outlined would lead to a smaller government, equal or lower spending and overall much lower taxes.
And seeing as we are comparing income tax with LVT, how is income tax any less of a 'theft' than LVT? I have some sympathy with the view that 'taxation is theft' but also with the view that 'land ownership is theft' (and land ownership only works because the force of the state is there to back it up) so why not make the punishment fit the crime?
Further, I've read that article and it is full of straw man arguments, e.g. this: "The criticism of the LVT which Rothbard levies is even more broad, which is that you cannot determine the value of the untransformed land, as the Georgians describe it."Nonsense - urban land, which is what we are talking about is dead easy to value - property developers do it all the time.
His claim that land on a volcano has no value misses the obvious point that land on a volcano does have some value, e.g. I am sure that the tourist shops and cafes half way up Mount Etna have to pay rent for those sites to e.g. the local council, and that conversely those sites would have no rental value if e.g. the local council hadn't built a road for tourist buses to be able to reach them.
sigh.
This is what pisses me off about Georgists. You either haven't read, or you have but refused to understand, the arguments within. My proof? Your claim that he says the land on a volcano has 'no value' Absolute, complete, horseshit. ('For example, I may not personally attribute any value to an active volcano, but may still buy it, so as to sell it's use to a vulcanologist, who does value it.').
Trying to debate LVT with georgists is like trying to debate the existance of god with fundalmentalists. A waste of time, as I fear, you have just demonstrated. So I won't point out that developers attribute value by the use of voluntary market transactions, where as the state can't do this (the point of the article, ffs), I'll just leave it there.
Mr S, the 'market value' of the land on the volcano is exactly that - whatever the vulcanologist or ice cream shop is prepared to pay (within the bounds of what the local council will allow), so what's his point?
"developers attribute value by the use of voluntary market transactions"Exactly, and by recording sales at market value - which is what HM Land Registry does - and adjusting down for cost/value of bricks and mortar, gives us the value that would be used for LVT purposes. Whoever said anything else?
No, the state can only record the last transaction and cannot determine what value I put on the land, or the bricks, etc, etc, nor can it determine why I put this value on it, and what it's significance, economic or otherwise, is in my life. That is the point of the article.
Of course nobody can say how much you, Mr S, would pay for a particular plot, or decide the myriad factors why Mr A sold plot B to Mr C for £X,000, but that price of £X,000 is the market value because that is the very definition of market value.
So, subject to averaging out recent sales in a defined area (in normal conditions five or ten per cent of houses are bought and sold each year), we get a very good approximation of the market value per sq yd in those areas.
Of course it's not perfect, but surely it is a vast improvement on Council Tax that is a completely made-up figure (and more like a Poll Tax) and Stamp Duty Land Tax or Inheritance Tax, which are an arbitrary % of market value (and jealousy surcharges to boot) both of which LVT could and should replace?
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