Beware tax utopians
Ronald Johnson and the Association for Good Government (‘‘Reform taxes for jobs boost’’, Letters January 8) want our tax system to be replaced by a single tax based on ‘‘unimproved land values’’ as per the 19th century ideas of Henry George. The theory is that we ought to rent our land off the government to maximise the usage value. If you don’t want to pay the notional rent, well, just move off that bit of land to one more suited to your pocket.
I freely admit that the current system is ridiculous. However, we have learned to live with it and many of us look forward to the end-of-year tax refund. I say beware utopians bearing gifts – no income tax, no consumption tax sounds great. Thank goodness there is literally no chance.
Tony Reardon, Terrey Hills, NSW ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
If you were to reflect further, Tony, you may come to see the practical merit of publicly capturing land rent instead of the current system you yourself label as “ridiculous”. As elsewhere, it can only end badly for policy makers to have allowed Australia’s land rent to be privately capitalised into the biggest household debt bubble in the world.
In more thoughtful days, we did institute a federal land tax in 1910 and founded Canberra on a land rent system, both in the lingering wake of the 1890s depression which had ensued as a result of the 1880s bubble in land prices. Meanwhile in the UK, the British aristocracy believed the Liberal Party’s ‘Peoples’ Budget’ of 1909–which had people dancing in the streets about the proposed land tax–was so confronting the 0.1% began to concoct reasons to go to war – and the killing of Archduke Ferdinand proved their godsend.
In the Progressive Era (1890-1920), great US city mayors the likes of Al Smith, Tom L Johnson, Brand Whitlock, Daniel Hoan, Edward Robeson Taylor, “Sunny Jim” Rolph and Hazen Pingree instituted capital works and land taxes to resurrect their failing economies.
Seeking to switch from taxes on productivity to land rents were timely worldwide responses to impossible debt such as Australia now faces. You may also note that land and spectrum, being unable to flee to overseas jurisdictions, represent the only unavoidable revenue base. Oh! Maybe that’s why you believe there’s “no chance” for such a system now, Tony?