Ben Franklin was wrong, and he knew it, when he said: “In this world nothing can be said to be certain, except death and taxes”, because he was aware that economic rent is a surplus arising out of the production process. He might more correctly have observed that nothing in life is certain except death and rent.
Franklin knew well that rent could be captured for public purposes without penalty to labour and capital, that is, without the introduction of taxation, but he didn’t want to offend his land-owning colleagues.
Like Franklin, Adam Smith also went to France to understudy the Physiocrats. That he was also impressed with the truism land rent must be the revenue base is evident in his writings, but Smith couldn’t quite bring himself to argue for l’impote unique, and that taxes be abolished. Did this have anything to do with the Duke of Buccleuch being Smith’s mentor?
We’re told we ought not be dogmatic, that it’s a blessing to be adaptable and flexible, but that certainly does not apply to the revenue base which has to be land and natural resource rent – because corruptions begin to emerge if they’re not the base.
And, once we fall for the corruption represented by stealing from the earnings of labour and capital, the following social ills spill into society:-
- The return to capital and wages proves inadequate and must be supplemented by taking on more and more debt.
- Governments, besotted by and beholden to taxation, legislate and spend in areas they’d not have to if people were allowed to retain their own earnings. They’re forced to pay pensions of different descriptions, then try to get provision for these of these off their balance sheets by privatising retirement through compulsory contributions to private superannuation funds (further reducing peoples’ net wages).
- Like taxation, private superannuation is revered as a public good. Black becomes white. Only a few see through this nonsense.
- Government and superannuation both balloon impossibly, driving up household debt even further. As rent is being privatised instead of captured for public purposes, it gets capitalised into an impossible land price bubble.
- Businesses are forced offshore to where “labour is much cheaper”, but it is rarely said “to where taxes and land prices are much cheaper”.
- The land price bubble implodes.
- So does the financial system – because debt has been ‘secured’ against bubble-affected real estate prices.
- As a form of survival, commerce sets up arrangements to defer payment for client purchases. Business schemes become more and more elaborate, more and more questionable. White collar crime becomes rampant.
- Not only does it go unremarked that governments have drained effective demand out of the citizenry as rentiers are rewarded obscenely (bank CEOs being the most visible of this category), but a remedy is suggested: wages must be wound back. This acts to deepen the lack of demand in the economy, and to compound the corruption that has taken place.
All this happens when people are kept ignorant about the alternative to taxation.
And, no, David McWilliams’ new account of the Irish being forced to nationalise their banks to keep them as ‘going concerns’ isn’t some sort of an Irish joke. (Hey! Isn’t the definition of a going concern an enterprise that is able meet its debts?) It serves to demonstrate the depths into which the world’s taxation-induced corruptions have descended.
But as few understand the cause, few understand the urgent need to abolish taxation. What unwitting sheep we humans can be!
“There is no subjugation so perfect as that which leaves the appearance of freedom.”
– Jean-Jacques Rousseau
HAVE A HAPPY CHRISTMAS AND – THE BEST I CAN WISH ANYBODY – MAY YOUR NEW YEAR BE GEORGIST!