… AND IT’S ASTRONOMICAL HOUSEHOLD DEBT WHICH HAS PUT THE BRAKES ON THE ECONOMY
Two Australians offer the world alternatives to the stupidity of bank bailouts and austerity. In combination, they’d definitely work:-
1) Former Treasury head, Ken Henry: Abolish all the deadweight taxation on labour and industry.
2) Professor Steve Keen: A ‘debt jubilee’ comprising a government grant to ALL citizens, to be applied in the first instance to household debt.
There’s something in the air down here in the Antipodes – and it’s exhilarating.
Oh, it does some good things for agricultural land, as I put in my last post on my own site. No doubt about that.
The beauty of it for agricultural land is that the cost of landholding rises and falls with the conditions. Good years, you pay. Poor years, it costs you near nothing.
And it means that people who don’t have the capital backing can get into agriculture quite easily.
Where it falls apart is that improvements to the land are automatically appropriated by the government. While there is a disincentive to let land go to waste, there is no incentive to improve it, as any improvements are consumed by the increase in taxation.
“Disincentivise the development of agricultural land’, Chris?!
Most of my forebears worked the land, and they worked it very hard. They worked it poor, due to the heavy strictures of taxation and the cost of their farmland and machinery, and they died wealthy, but without ever having really been able to enjoy the fruits of their incredibly fruitful and difficult labours.
Their wealth only came from the eventual sale price of their farms. It should have come to them along the way with the sales of their milk, their produce, their cattle, untaxed, of course.
They should have had time to enjoy recreation, travel and the arts, but they didn’t.
Our rotten taxation and landholding regimes creamed off and distributed the fruits of their hard work and enterprise to the same plutocratic leeches that still hang around.
This urgently needs changing, because it has brought us, yet again, to the door of another economic depression.
LVT would incentivise productivity – rural, commercial and industrial pursuits – and penalise the parasitical 0.1%. Henry George saw this clearly and Alfred Marshall only caught a fleeting glimpse.
Not to be able to see it demonstrates just how witless we can be at times.
Been going through and reading up some of the development / discussion that went on from Henry George’s work.
Alfred Marshall (a contemporary of George in England) adaptation and generalisation is interesting in that he takes what George viewed as a singular instance in land and extends it to other areas where the supply of a good is relatively fixed.
He also noted one of the issues that I have which is that it would disincentivise the development of agricultural land.
John Garland here in Australia also made some significant comment along the same lines inthe 1930’s; that an LVT would reduce the ‘plundering’ of urban land; that rural land was a different case; that the transition to an LVT without compensation was a ‘harsh violation’ of equity.
It’s good to find that the benefits and concerns that are obvious now were obvious then.