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Re: [diggers350] Comments on Jock Coats

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  • Jock Coats
    ... My position is that you should tax as little as possible. That all tax is, by definition, an imposition. I agree that there are huge disparities in
    Message 1 of 3 , Aug 31, 2005
      On 31 Aug 2005, at 21:45, TLIO Chapter7 wrote:

      > Georgists often refer to capital as hard-earned — but most of it is
      > inherited or comes as a return on investments, or is funny money
      > earned on
      > the stock market. Capital may well have been hard-earned by someone,
      > but not
      > usually by the owner. Consequently, I do not understand why high
      > capital
      > investment returns or high incomes should not be taxed.

      My position is that you should tax as little as possible. That all tax
      is, by definition, an imposition. I agree that there are huge
      disparities in capital property. But I also believe that these
      fortunes can only be sustained under the current "double monopoly"
      system of land and money.

      If you change that system, and if you start down the road of Land Value
      Tax you will at some point need to reform the way money is created as
      well to fill the hole, then the two supreme privileges that have
      allowed the concentration of wealth out of proportion to effort will be
      broken and that real redistribution does not need punitive taxation of
      economic activity - whether honest and hard earned by some or not.

      And it also rather depends on how much tax you need to raise, and
      whether the chosen tax base supports all of that. If it does - why tax
      anything other than land values if land values will fill the need.
      Besides, one of the selling points for LVT is that it is less easily
      avoided even by the super wealthy who currently support a £50bn a year
      tax avoidance industry and end up paying far less of their incomes than
      I do. Sure - I guess you could be a multi-billionaire and live in a
      one roomed garrett in Lerwick, but what would be the point?

      Overall, those who own a lot of capital will end up paying probably
      more than they do today to maintain the same standards of living in
      terms of the property/built environment they want around them. And
      many, many at the other end of the scale (fully fifty percent of the
      population I guess in theory) would be taken out of taxation
      completely.

      Churchill answered your question though:

      " "If," he inquires, "you tax the unearned increment on land, why don't
      you tax the unearned increment from a large block of stock? I buy a
      piece of land; the value rises. I buy stocks; their value rises." But
      the operations are entirely dissimilar. In the first speculation the
      unearned increment derived from land arises from a wholly sterile
      process, from the mere withholding of a commodity which is needed by
      the community. In the second case, the investor in a block of shares
      does not withhold from the community what the community needs. The one
      operation is in restraint of trade and in conflict with the general
      interest, and the other is part of a natural and healthy process, by
      which the economic plant of the world is nourished and from year to
      year successfully and notably increased."

      >
      > I agree with Georgists that profits from rent (ie profits derived fom
      > ownership rather than from working of land) should be returned to
      > society;
      > but by the same token so should undue profits from ownership of stock
      > (ie
      > profits which are out of proportion to the work performed).
      >
      > Cheers
      > Simon
      --
      Jock Coats
      At:
      Corporate Information Systems, Computer Services,
      AG17, Gipsy Lane Campus, Oxford Brookes University,
      OX3 0BP
      Work: +44 1865 483353
      and at:
      Wardens' Lodgings, Flat 1e, Block J Morrell Hall,
      John Garne Way, OXFORD, OX3 0FF.
      Home: +44 1865 485019 Mobile: +44 7769 695767
    • TLIO Chapter7
      Jock All tax is an imposition ( in French tax is an impot), but profit, over and above what is a fair return on labour, is an imposition on society as well. It
      Message 2 of 3 , Sep 2, 2005
        Jock

        All tax is an imposition ( in French tax is an impot), but profit, over and
        above what is a fair return on labour, is an imposition on society as well.
        It diverts surplus value from those who have earned it through their labour,
        to those who have done nothing more constructive than sign bits of paper
        signifying that they own a share. Moreover it diverts the power to make
        decisions to these shareholders who do not have the interests of society as
        a whole at heart, or any direct knowledge of the workplace and its
        environment, but are driven solely by the need to make a profit.

        Your Churchill quote illustrates what makes many of us uneasy about
        Georgism: Drawing profit from capital investment, he says, is a " natural
        and healthy process, by which the economic plant of the world is nourished
        and from year to year successfully and notably increased".
        You could just about get away with saying this in 1905 but in 2005 it is
        simply not on unless you are a neocon. The economic plant of the world has
        turned into a triffid ‹ the drive to increase GDP is destroying global and
        local commons and engulfing natural resources, and it is driven largely by
        profit, much less by rent.

        What a lot of us fear is that a land tax based on the potential rent of a
        piece of land would drive landowners to extract the maximum economic returns
        from that land, when this is often not the ecologically or socially wise
        policy. For example trees, which have a low economic value (largely because
        of the discount rate) but a high environmental and social value, would be
        felled at an alarming rate if land tax were imposed in an otherwise
        free-market situation.

        In a non-free- market situation (eg where you might not be allowed to fell
        trees or build a house) you have land use planning; in this context a tax
        based on the potential value of the land (ie on getting planning permission)
        becomes a development tax, which is a very different fishfrom a land tax,
        not least because it discourages development (i'm not going to apply for
        permission because they'll tax me) whereas a land tax encourages it (I've
        got to develop this land to pay off the tax). I prefer a development tax
        because, on the whole, development stinks. But then again some developments
        are good and these would be handicapped by a development tax.

        I am in favour of taxing unearned rent but I do not see why everything else
        would fall into place if this were done, and I am consistently put off by
        the way you Georgists ride this hobby horse and shun all others. Life just
        isn't that simple. I note the search in the letters column of Land and
        Liberty for a new name, and view this as an unconscious recognition that
        taxing land is not a catch-all solution. If you Georgists want to move on, I
        would suggest advocating "resource taxes". That has a much better chance of
        confronting environmental problems, and gaining allies, though it still
        doesn't address social justice issues.

        Cheers

        Simon

        > From: Jock Coats <jock.coats@...>
        > Date: Thu, 1 Sep 2005 05:07:27 +0100
        > To: diggers350@yahoogroups.com
        > Subject: Re: [diggers350] Comments on Jock Coats
        >
        > On 31 Aug 2005, at 21:45, TLIO Chapter7 wrote:
        >
        >> Georgists often refer to capital as hard-earned ‹ but most of it is
        >> inherited or comes as a return on investments, or is funny money
        >> earned on
        >> the stock market. Capital may well have been hard-earned by someone,
        >> but not
        >> usually by the owner. Consequently, I do not understand why high
        >> capital
        >> investment returns or high incomes should not be taxed.
        >
        > My position is that you should tax as little as possible. That all tax
        > is, by definition, an imposition. I agree that there are huge
        > disparities in capital property. But I also believe that these
        > fortunes can only be sustained under the current "double monopoly"
        > system of land and money.
        >
        > If you change that system, and if you start down the road of Land Value
        > Tax you will at some point need to reform the way money is created as
        > well to fill the hole, then the two supreme privileges that have
        > allowed the concentration of wealth out of proportion to effort will be
        > broken and that real redistribution does not need punitive taxation of
        > economic activity - whether honest and hard earned by some or not.
        >
        > And it also rather depends on how much tax you need to raise, and
        > whether the chosen tax base supports all of that. If it does - why tax
        > anything other than land values if land values will fill the need.
        > Besides, one of the selling points for LVT is that it is less easily
        > avoided even by the super wealthy who currently support a £50bn a year
        > tax avoidance industry and end up paying far less of their incomes than
        > I do. Sure - I guess you could be a multi-billionaire and live in a
        > one roomed garrett in Lerwick, but what would be the point?
        >
        > Overall, those who own a lot of capital will end up paying probably
        > more than they do today to maintain the same standards of living in
        > terms of the property/built environment they want around them. And
        > many, many at the other end of the scale (fully fifty percent of the
        > population I guess in theory) would be taken out of taxation
        > completely.
        >
        > Churchill answered your question though:
        >
        > " "If," he inquires, "you tax the unearned increment on land, why don't
        > you tax the unearned increment from a large block of stock? I buy a
        > piece of land; the value rises. I buy stocks; their value rises." But
        > the operations are entirely dissimilar. In the first speculation the
        > unearned increment derived from land arises from a wholly sterile
        > process, from the mere withholding of a commodity which is needed by
        > the community. In the second case, the investor in a block of shares
        > does not withhold from the community what the community needs. The one
        > operation is in restraint of trade and in conflict with the general
        > interest, and the other is part of a natural and healthy process, by
        > which the economic plant of the world is nourished and from year to
        > year successfully and notably increased."
        >
        >>
        >> I agree with Georgists that profits from rent (ie profits derived fom
        >> ownership rather than from working of land) should be returned to
        >> society;
        >> but by the same token so should undue profits from ownership of stock
        >> (ie
        >> profits which are out of proportion to the work performed).
        >>
        >> Cheers
        >> Simon
        > --
        > Jock Coats
        > At:
        > Corporate Information Systems, Computer Services,
        > AG17, Gipsy Lane Campus, Oxford Brookes University,
        > OX3 0BP
        > Work: +44 1865 483353
        > and at:
        > Wardens' Lodgings, Flat 1e, Block J Morrell Hall,
        > John Garne Way, OXFORD, OX3 0FF.
        > Home: +44 1865 485019 Mobile: +44 7769 695767
        >
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