- Extractive incomes are literally counter-productive. What are ‘extractive’ incomes? They’re what economists call ‘economic rents’ or unearned incomes, sometimes called ‘super-profits’, viz, over and above normal profits. They need to be taxed away. Examples: Land prices represent the private capitalisation of land rent, and banks use volatile land prices as part of their ‘security’ for mortgages. To the extent that bank have an interest in inflating land prices, they are rent-seekers. People investing in real estate for capital gain are also rent-seeking speculators, as are corporate miners who fail to pay half their net profits before tax, depreciation and amortisation to the Australian people for the right to remove our national resources. It’s a partnership with the Australian people, Gina and others!
2. Taxing wages and profits are literally counter-productive. Unlike extractive incomes, in generating real wealth, people and companies have worked for their wages and profits: they’ve been earned. They’re therefore the genuine ‘private property’ and shouldn’t be taxed.
3. Governments don’t require ‘revenue’ (or to borrow) in order to spend on productive national investment. Government spending comes before taxation. The currency of the nation is protected from inflation when governments tax away rent-seeking incomes.
Getting your heads around these fundamental facts might eliminate much of the nonsense that passes for economic debate these days, guys!