…. BUT IT OVERLOOKS SOME OF BRYAN KAVANAGH’S EXCELLENT OBSERVATIONS!
[There’s nothing like talking about yourself in the 3rd person!]
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Such as: that extra taxes are not needed to ‘fund’ a universal income. In fact, a UBI becomes a direct deduction from the economic rent currently purloined by rent-seekers.
16% of that amount was land rent and the other 34% was taxes on labour and capital, the deadweight losses from same, and realised capital gains.
In attempting to tax away the land rent of 16%, instead of wages and profits and goods and services, although land prices would fall towards zero, the land rent itself would actually continue to grow as the economy began to burgeon self-sustainably (for a change!) and remain to be ‘taxed away’ each year!
This would ‘afford’ the damaging 34% of the economy to be replaced by a universal income of at least $30,000 per annum for every Australian of 18 years of age and beyond. Not bad, eh?
‘Modern’ Monetary Theory shows the money is available, anyway. That it comes out of rent and thereby attacks rent-seeking and property spec is a bonus.
The only threat to the MMT and a UBI is inflation, and as the public capture of land rent does away with taxes on labour and capital and land prices, inbuilt inflation will disappear in one fell swoop. The only residual taxes are those we choose to apply to ‘bads’ such as pollution and smoking.
There would be a natural falling away of income tax in the UBI scenario anyway, because the coercive effects of taxation have disappeared. (Goodbye NAIRU!) For example, business wage bills actually decline with a UBI in place: businesses have only to offer a sufficient amount above the UBI to retain or attract employees. Of course, this has enormous implications for the income tax regime. It tends to become redundant because tax scales no longer ‘work’.
If regressive taxes on goods and services are abolished, prices fall substantially with the slashing of their deadweight. This is not only good for the people of Australia, but also for Australian exports!
Although it’s a win/win for individuals and businesses, it’s not so good for rent-seeking businesses and monopolies ….
… and that’s a good thing, too!
