Counting Cats in Zanzibar Rotating Header Image

I wish the end was rather more immediately ‘nigh’

The public debate in recent days on taxation has swerved into some hideously dangerous territory.  Margaret Hodge, with no sense of irony apparently, has called for tax avoiders to be ‘named and shamed’ Allow me to state for the record, I wish I was smart enough and rich enough to be so named.  Being ‘shamed’ by the likes of Hodge is something of a non-sequitur for me.   Trust me Maggie, what ever you may think of me, right back at ya in spades.  But I don’t demand money or fealty from you; nor in fact did I preside over child abuse in the homes I was responsible for and decline to investigate when alerted, and try to gag complainants in court, but let’s keep to tax.

Then we have the unbelievably clumsy announcement by Mr Ed of a mansion tax.  Now it’s a fair bet this was only ‘pulled-out-of-his-arse’ because Cameron mocked the potential policy-free speech the day before.  But to say it is ill-thought out is like suggesting the Titanic had a damp problem.  No-one knew for sure what level it would operate at or how the valuation would take place, or the valuation date, or would this be reviewed annually or what level the tax would be at or what level the 10p tax rate would come in or how much this would cost.  Monster-raving looney stuff.  Not to be out-done, the Lib-Dems now like wealth taxes.

God alive is there is a bigger admission of failed government?  Tax on acquisition, tax on disposal, now tax on holding?  Lesson the first chaps, we do not have taxation problem, we have an over-spending problem and futile attempts to raid a few more pennies from people won’t fix this.  Indeed, if you want to smash the central London property market and with it some banks, go right ahead.  Also I don’t enjoy the tax return as it is, imagine how much I will like having some parasite from the tax office rummaging through the draws looking at my wife’s jewellery.

People become wealthy when private property rights are respected.  This system means you no longer own stuff, you are the leaseholder and the state is the freeholder and this is a massive shift in the fundamental relationship between the two parties.  Formerly if legally acquired and duty paid, it was yours (houses not withstanding), now all bets are off.  And can anyone think of a better recipe for wealth flight?  Won’t you just convert assets to diamonds or something and bung them in a safe deposit box in Zurich?  So what then? Tax on extra-territorial global assets?  Good luck finding ‘em boys and how anyway will that stand against double-taxation treaties?  Say I own a place in Tuscany and pay local taxes, don’t double tax treaties mean I am exempt from UK taxes on said assets?

Total madness, economically destructive and futile as it won’t come close to filling the void of over-spending.  If you don’t understand or refuse to see the problem, which is over-spending, all the pointless money-grubbing schemes are futile.  I’m really starting to wish for the end of this, as the long drawn out death of the economy could do some real damage, whereas a bankruptcy and re-set at least gives pause for thought.  And it is absolutely inevitable, so let’s have it sooner.

14 Comments

  1. Piran D'Or says:

    after the revolution, there’ll be a 100% land value tax… what’s not to like?
    http://kaalvtn.blogspot.co.uk/p/index.html

  2. Sam Duncan says:

    Thought for the day: Does Margaret Hodge have an ISA?

    But yes, it’s almost amusing to watch the Pols running around like wet hens frantically looking for new sources of loot revenue as their meal ticket collapses around their ears. Almost.

  3. Single Acts of Tyranny says:

    I wondered if she has a soul?

  4. Paul Marks says:

    As the regime (not just in Britain but elsewhere) collapses into de facto bankruptcy – prepare for more desperate acts.

    “The Rich” being dragged through the streets? Murdered? People taking the latest “Batman” movie as a plan of action (accept with no Batman or, horrified Catwoman, to stop the madness)?

    “Land Value Tax” (Henry George LIVES! – after all who remembers that Frank Fetter refuted Henry George a century ago?) that could come as well.

    It is all possible – as the regime goes into its death agony.

    And I am sitting on a densely populated island that is dependent on “financial services”,

    I will not survive.

    There is no chance what-so-ever that I will survive.

    For those of you who are young and have marketable skills….

    GET OUT – GET OUT NOW.

  5. PDO, I don’t know whether you linked to KAALVTN ironically or not, but thanks anyway.

    PM, George was never refuted by anybody, everything he predicted is all still easily observable today – the very fact that this country is now run by the financial services industry you profess to despise is proof that George was right and Fetter was wrong.

    If you seriously think that taxing earned income or output or profits is better than taxing government protected monopolies then you are truly a Faux Lib of the worst sort.

  6. Roue le Jour says:

    I can see you enjoying having a good wallow there, Paul, but honestly, anyone who can speak good English can wangle an English teaching job in Asia with a bit of persistence. I do it, after all, so it can’t be too difficult. So you are not entirely without options.

  7. Mr Ed says:

    @ Mark. You put up a straw man argument there that PM professes to despise financial services. How is that a necessary ingredient of his comment?

  8. john b says:

    If you seriously think that taxing earned income or output or profits is better than taxing government protected monopolies then you are truly a Faux Lib of the worst sort.

    This. Far better to remove all income taxes, and shift the focus of taxation onto something which is fixed in supply and can’t be offshored. Which, obviously, is land.

    Also, double-taxation treaties already solve the strawman problem you think you’ve found above: if the tax in Tuscany is higher than the tax due in the UK, you pay nothing in the UK; if the tax in Tuscany is lower than the tax due in the UK, you pay the UK taxman the difference.

    This is already how overseas income taxation works for UK-domiciled UK tax residents.

  9. John Galt says:

    “Far better to remove all income taxes, and shift the focus of taxation onto something which is fixed in supply and can’t be offshored. Which, obviously, is land.”

    I agree, however the problem is that so much is being taxed at every level that I would have to seriously question how high a Land Value Tax would have to be to raise the revenue required to replace Income Tax et al.

    Would we get to a point where Land Value Tax becomes such a burden that the land is sold off or even allowed to be seized by the tax man just to get rid of the attendant burden of taxation.

    As has been mentioned previously, the problem here is not primarily the taxation (although this is clearly too high), but rather the over-spending. Even governments can’t spend 140 billion more than their revenue forever. Each round of quantitative easing is just another round of currency debasement. Unless the government is deliberately leading us to a “Weimar Hyperinflation” solution to debt.

  10. Mr Ed says:

    @JG we might be heading back to the approach of William the Conqueror, and Domesday, so much easier with land registration, computers and the current demographic.

  11. Julie near Chicago says:

    Sigh…there IS no “good” tax. As for Land Value Tax, first, it certainly IS possible to create, effectively, more land–it’s been done several times, Chicago, Holland, Venice, islands…. How expensive that is, and whether it’s a good idea in a given case, is another question. But effectively, the “supply of land” is NOT fixed.

    Then there’s JG’s point…if only the land-tax is supporting The Gov, how long before “owning” land becomes nearly unaffordable for all except–possibly–the few who belong to the nomenklatura and get some kind of break or other? And The Gov will still go broke.

    And the other arguments, too.

    I can see only a few moral ways to fund government. It could exist on purely voluntary donations, although the opportunity for corruption in that case is obvious. I don’t believe the government should be engaged in marketing anything, since that potentially enables it to be in competition with its putative masters, the individuals who make up the body it “governs.” And it also enables government to grant itself a monopoly, de facto.

    In any form of democracy, it seems to me the only proper way to finance government is through the sale of votes. Yes, if you want to vote in any given election you pay a fee. Everyone pays the same fee. You only get to vote once. You only get to purchase a vote once (for each election)–although this one invites fraud, the same as registering multiple times under multiple names in our current systems.

    What if you can’t afford the vote? Then you either take a second job, or borrow the money, or forgo voting.

    No system is going to be perfect, but I think that this system would be the best one, least liable to corruption and to governmental overreach–and because of the economic mobility of people in a free-market (or even mostly free-market, at least in the U.S.) system, few people would necessarily stay disenfranchised for long, if they cared enough to vote. [Hopefully when that halcyon day comes, this whole "rational ignorance" myth will have been exposed for what it is--part stupidity and part lie. At least, given the arguments I've seen for it so far. If so, they'll know enough to keep the government reined in, which will keep it financially limited, which will keep the vote cheap ("affordable")--and the market relatively free.]

  12. john b says:

    Would we get to a point where Land Value Tax becomes such a burden that the land is sold off or even allowed to be seized by the tax man just to get rid of the attendant burden of taxation.

    The first one is part of the point of LVT. Say there’s an unprofitable business with a freehold on Oxford Street (I know business rates make this unlikely already, but that’s not the point in the example – in any case LVT would replace council tax and business rates); that is a poor allocation of resources. Far better for that business to sell up, and use the cash to relocate to cheaper premises.

    The second one is only going to happen in the event that the first fails to happen, if the business owner keeps his head in the sand and ignores the mounting unpaid tax bills. This is what already happens when business owners do the same for VAT and PAYE.

    “How expensive that is, and whether it’s a good idea in a given case, is another question.”

    So expensive that the question in this context is pedantry. If the UK were Singapore, then it might come into play. It isn’t. More than 90% of land in the UK, and more than 80% of land in England, is undeveloped. Aside from a few docks in urban centres, there is no realistic prospect of significant reclamation programmes in the UK.

  13. Adam Smith Fan says:

    Julie near Chicago wrote “As for Land Value Tax, first, it certainly IS possible to create, effectively, more land–it’s been done several times, Chicago, Holland, Venice, islands…. How expensive that is, and whether it’s a good idea in a given case, is another question. But effectively, the “supply of land” is NOT fixed.”

    Misunderstanding there. All that has happened in the examples that you gave is that land below sea-level has been raised above sea level or had dykes built around it and the water pumped out. In either case the land already existed. It was just unusable owing to the water covering it. Removing the water by raising the seabed or pumping is an example of “improving” the land to make it more usable. Since LVT is levied on the “unimproved” rental value of the land, I think you’d find that the tax for land reclaimed from the sea or from a lake would be little or nothing since the rent for that portion of lake or sea would have been little or nothing.

  14. Julie near Chicago says:

    Adam Smith Fan,

    Yes, but in effect it’s still “new” land–it wasn’t usable as land when it was underwater or undersea.

    As for taxability, I’m pretty sure the people who own the buildings on, say, the land which now supports the Chicago Kidney Beans (forget their right name!)–which is fill–pay property tax on it. People who were lucky enough to be able to de-swamp an area and build there before the ravages of the EPA pay tax on their property. –Again, see the example of the city of Chicago itself, which was once Skunk Cabbage Swamp. I promise you a zillion Chicago homeowners whose houses are built on what used to be that swamp would LUV it if you could persuade Mayor Hatchetface Twinkletoes and the city council that they don’t have to pay property tax anymore. :)

Leave a Reply

%d bloggers like this: