onsdag 21 maj 2008

Tax competition driving business away from Britain

Addressing the CBI annual dinner last night, the Chancellor of the Exchequer, Alistair Darling said:

"A few years ago, one of our airlines used to say, 'We never forget you have a choice'. Today, governments should remember that. Business does have a choice. Business is increasingly mobile.

"Tax rates have to be globally competitive. I am determined that British business will not be the fiscal fall guy. Business is the linchpin of the British economy. We need to ensure that the tax system is competitive and predictable, as well as ensuring that the business environment is attractive to increasingly mobile businesses."

Good. So what is he going to do about it? There is no need to tax businesses at all. The tax can be shifted on to land instead - an ad valorem tax on the assessed rental value of land. Taking the tax off business is the most competitive thing any Chancellor could do. The ultimate in competitiveness, in fact. And the act would in itself raise land values, thereby increasing the size of the tax base and initiating a benign cycle.

Will the Chancellor do such a thing? Of course not. The civil servants at the Treasury were not even prepared to give a hearing on the subject of land value taxation to Dave Wetzel , former deputy of Transport for London. Since there are no good arguments to be put up against it but there are powerful though numerically small vested interests who would be threatened, their mode of operation is by spreading fear, uncertainty and doubt. In a society that is numerically illiterate, there can be no better method. There is no need to attempt to argue the case.

In the meantime, the country's headlong descent into ruination continues unchecked and with no prospect of anything better from an alternative government, as they would just carry on with the same failed policies.

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