Fortsätt till huvudinnehåll

The cycle of money and tax

Sometimes a picture emerges with extreme clarity. One of the reasons why I take part in internet discussions is that it forces one to refine one’s thinking. This was a response to a comment in the Daily Telegraph.

Governments create money to pay for their expenses. It should then be removed through the tax system. To ensure that taxes were paid with sound money, the government paid its expenses by putting into circulation an official coinage impressed with the seal of the sovereign; hence ‘Render unto Caesar’.

A primary function of government is to defend the territory and the land rights of the inhabitants. Rights of land occupation are normally achieved through land titles, which the government defends through the legal system. Government also provides the infrastructure without which land would be worthless. Thus, owners of land titles are able to collect the economic rent of land which has been created by the money spent by government. The cycle would be completed if governments then collected this rent as a result of their activities; rent of land is not created by private individuals and companies but is a stream of wealth over and above that.

Unfortunately, most of those responsible for the design of our tax systems have failed to notice that the process is a cycle: governments create money and spend it to protect land rights and sustain land values. The cycle should be completed by the collection of the land value thereby generated. Because this connection is not recognised, people throughout the world are saddled unnecessarily with taxes which appropriate by force the products of labour and enterprise.

Kommentarer

Populära inlägg i den här bloggen

The dreadfulness of British governance

I wrote to my MP on two entirely separate issues recently. The first was to do with the replacement for the Inter City 125 train, which at £2.6 million per vehicle, is twice as expensive as it ought to be. The second concerned the benefits of a switch from business rate and Council Tax to a tax based on site values. In both cases, the replies were full of spurious, unsubstantiated assertions and completely flawed arguments. This is typical. You will not get an iota of sense from the government on any area of public policy at all - finance, economics, trade and employment, agriculture, housing, health, transport, energy. All junk. If you write to your MP you will invariably receive answers that are an insult to your intelligence, no matter what subject you are writing about. Of course they cannot understand statistics. They are innumerate. Whitehall is staffed with idiots with a high IQ. Look at their IT projects. And mind your purse, they will have that too.

How much more will the British tolerate?

The British are phlegmatic, tolerant and slow to rouse. Thus there was no great reaction after the terrorist attack in July 2005. The murder of Lee Rigby created a sense of outrage, but nothing more, since it appeared to be an isolated incident. Two serious incidents within a fortnight are another matter. Since the first major terrorist incident in 2001, authority has tried to persuade the public that Islam is a religion of peace, that these were isolated events, or the actions of deranged "lone wolves", having nothing to do with Islam, or to reassure that the chances of being killed in a terrorist attack were infinitesimally small. These assurances are are beginning to wear thin. They no longer convince. If government does not act effectively, people will take the law into their own hands. What, however, would effective action look like? What sort of effective action would not amount to rough justice for a lot of innocent people? Given the difficulties of keeping large n...

Battery trains fool’s gold

A piece by the railway news video Green Signals recently reported the fast charging trials for battery operated electric trains on the West Ealing to Greenford branch, in west London. In a comment under the video, I described the project as technological overkill, bearing in mind that before dieselisation in the 1960s it was worked by the tiny steam locomotives of the Great Western 1400 class, a 1932 design based on an 1870s design. The money that has been spent on the experiment would have paid for a small fleet of the old things. Elsewhere in the comments, I was critical of the 800 series trains. This produced a response from the makers of the video, as follows. “I may be grasping at straws here but I am guessing you don't like 8xx series trains all that much and rather wish we still had Kings, Castles and (for the branches) 14xx's. Fair? ” My reply was as follows... Yes you are grasping at straws. The model for long distance stock is the class 180, which is a 23 metre veh...