Economics is simple. From before the time of Confucius and the Old Testament up until today, many great philosophers have understood and supported the economic principles that have become known as Georgism. This was because the American Henry George explained it best, answering in detail each and every claim that has ever been put against it. (If you have your doubts, you need to read Progress and Poverty – or listen to the 18-hour audio version here.)
Nations have three options. They can can draw revenues only from land, labour or capital. (Four perhaps: from combinations of all three.)
If they draw most revenue from labour and capital, these taxes act as deadweight upon labour and capital and are passed on in prices. Economies taxing mainly labour and capital will tend increasingly to deter labour, capital and productivity, encouraging inflation – and speculation in land that grinds into regular recessions or a major deflation.
Economies that tax land will be successful, because a tax on land is actually a non-tax, a rent that cannot be passed on in prices. They will be so productive that they will encourage capital formation, higher wages and profits (without inflation), and deter speculation in land. They would be productive enough to generate a universal basic income for all citizens.
Once people comprehend these fundamental economic facts, they will marvel at the stupidity of the tax regimes under which world economies currently struggle.
How is it that economists, tax lawyers and accountants are the last to appreciate these facts?
The only conclusion you can reach is that our education systems are failing us: we have become too ‘sophisticated’ for our own good.