måndag 8 oktober 2007

More on Inheritance Tax

Some commentators are saying that the Conservative proposals on Inheritance Tax tipped the polls to the point that Labour backed off from having an election in November. Perhaps. But nearly all the politicians and commentators are missing the point. There is a need for clarity.

Inheritance tax should be zero. Nil. Zilch.
Taxes on wages, goods and services should also be zero. Nil. Zilch.

People should be allowed to keep everything they earn from work and pass it on to whoever they want. Governments have no business getting their hands on it.

What needs to be taxed is land values. 100% of the rental value of land and the land element of all property. Why? Land value is created by the presence and actions of the communty. It is not earned. It is a public value and the government should collect it. Some of this revenue should be used for the essential purposes of government ie administering justice, defence (not attack), highways and emergencies. What is left over should be distributed equally to every citizen in the land as a national dividend, sometimes referred to as Basic Income.

Under such a tax regime the price of land would fall to zero. There would be nothing to tax. Windfall land value bubbles would not occur in the first place. Inter-generational injustice is almost entirely related to the inheritance of land, not that vague and ill-defined entity referred to as "wealth". Only land has an enduring value. Everything else wears out, decays or become obsolete.

Land value taxation is a prerequisite for justice from one generation to the next.

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