The big boys—and I do mean the BIG boys—want us to feel passionately about one political party or another, whether the Democrats or Republicans in the US, the Labour Party or Tories in the UK (maybe even the Lib-Dems), or the Labor Party or Liberal (turned conservative) Party in Australia.

They’re probably also delighted when I go troppo as Paul Chapman sends a hallmark outside-50 through for another Geelong goal.

You see, these are great distractions from the fact that they’re stealing from you, and, like you, the news media don’t really want to know about it either. They’ll cover the politics and the footy, but not the world’s greatest rort (that’s ‘scam’ for people in the US).

No, the big boys aren’t your bank manager, nor even your bank’s CEO—although that’s getting pretty close—it’s the BIG guys who’ve run the banks for centuries and know how they really work.

But it’s impossible to get these thieving plunderers behind bars for their criminal pursuits. You and I have exempted them from it, because we’d rather believe in political parties and football teams.

There is ONE way to get at them in future, though. No, not by governments issuing the currency; no, not by Glass-Steagall-like financial regulation. These might assist, but they are only mosquito bites on their bums (‘asses’).

No. Pass an act to abolish income taxes and levy instead a charge on land values.

Oh! How they’ll get you—their victims!—to squeal solicitously for them when the legislation is first proposed—something like innumerable Australians did for Gina Rinehart when the resource super-profits tax was first announced. Yes, Gina and her cronies did take part, too. They kicked in a quick $25 million for nonsensical advertisements telling us we had no right to our mineral resource rents and that our mines would be taken overseas … and some of us believed them. And these impecunious billionaires did hold a street protest to win others over.

In the afterglow of the rort perpetrated upon them, and a questionable change of Prime Minister over it, it now seems most Australians have had reason for second thoughts.

Oh! And won’t they wheel out the poor widow who can’t afford the land tax?  But surely they’d be happy to see their massively higher land tax assist the poor widow?

So, as things take a turn for the worse, forget the political parties. Forget pillorying the banks.  Demand an all-in, no exemptions, single rate levy on all Australian land values at the rate of 6% (see previous post)—and for abolition of income taxes on all productive labour and capital.

THEN, and only then, will you have them, the 0.01% where they need to be: paying their fair share. It’s not class warfare: it’s economic justice.

And remember, you first saw THE ANSWER here.

I just heard Bill Shorten and Joe Hockey huffing and puffing with Neil Mitchell on 3AW this morning.  What bluff and bluster – and didn’t the public see it for what it was!

Maybe if we ignore the curious definition of unemployment, 5.1% is better than 5.2%, but the rapidity of announcements of job layoffs in the Australian economy suggests this is about as good as it’s going to get.

The call should NOT be to cut wages and penalty rates to save jobs, but to abolish income tax.

I like the way Australian governments claim they created the employment that occurs under their watch, and that “we now have more people employed in Australia than at any time in history”. That wouldn’t have anything to do with our growing population would it, Bill?

All right, the economic settings governments provide DO either obstruct or assist the creation of jobs, but it’s mainly ‘obstruct’ at the moment and, as Joe Hockey volunteered on the show, the Liberal Party “has agreed with 85%” of what the minority Labor government has done.

Importantly, both need reminding that the income tax and the GST–on which each of the major parties do agree– savagely restrict job creation.

However, lest I be seen as one of those Bill Shorten accuses of “talking the economy down” it’s NOT as though there are no alternatives to income tax.

In 2003 former Treasury tax expert Dr Terry Dwyer demonstrated “that land-based revenues are indeed sufficient to allow total abolition of company and personal income tax.” (The Taxable Capacity of Australian Land and Resources, Australian Tax Forum, Vol 18 No.1)

This was followed by (then) Treasury Secretary Ken Henry’s inquiry into Australia’s Future Tax System which in 2010 recommended that more than one hundred taxes be abolished and greater emphasis be given to drawing more revenues from the annual values of land and natural resources.

The proposal for a federal land tax so that an array of inefficient taxes could be abolished went down like a lead balloon with both major parties. This would never suit the 1% who can claw back the income taxes they pay via the uplift in their property (read land) values!

Both parties disavowed the idea vehemently. They didn’t seem to mind that whereas a land tax aids job creation, income taxes work against it.

Wouldn’t the abolition of company tax assist Qantas, Alcoa, the car manufacturers, banks and others who are putting people off, Joe and Bill? Wouldn’t the abolition of personal income tax assist Australia’s debt-ridden householders?

Why the broad, knowing grins at this suggestion, guys? Not possible? Or is it rather that the big boys (and girls) might have to pay their fair share and might spend up big (like the miners) to defeat it? They won’t have to if you simply accede to them, will they?

These are deflationary times and BIG reforms are needed, guys, not the pissant sort of stuff with which you’re both going on!

The film, “Real Estate 4 Ransom” claims Australia could replace company tax and income tax with an all-in 6% levy on its site values.

Colleague Dr Gavin Putland references his financial stability contour map to confirm that a 6% levy on all site values “would certainly be enough to prevent these destructive bubbles”.

And he continues, finding further evidence to suggest Australia’s GDP is heading for a decline [2nd chart].

C’mon, Bill Shorten and Joe Hockey, this is now far too serious for your mindless party politics!

<– CLICK HERE

I trust Greece does what’s necessary and defaults on her impossible debt, instead of shackling present AND future generations in vain attempts to repay it.  [Isn’t it fortunate Greek debt is secured by credit default swaps?]

Events in Greece and Europe have acted to distract us from the US and UK, both turned into no lesser basket cases than Greece by their own particular brand of land price bubbles.  [Luckily, they have plenty of credit default swaps to secure their position, too!  🙂  So, what’s the fuss?]

Whilst the Republican Party demonstrates the inadequacies of its proposed leadership, Barack Obama casts about mindlessly for economic solutions. He has a suspicion that taxes are at the root of things—that the US rich have not been paying their fair share—but hasn’t a clue that keeping taxation AND land prices low is the key to returning the US to economic health.

There’s one way, and one way only, that can be done – but nobody’s addressing it.

Many in the US are looking for a recovery in land prices to lead the US out of its financial predicament.  For more than 20 years Japan has demonstrated this will most certainly fail.

When rapidly-inflating land prices bubbles have been the problem, wouldn’t you think keeping a brake on land prices might figure in any rational solution?  But no, it’s to be anything BUT this: it’s all about paying back banks, bailing them out, if necessary, for having failed their Risk Management 101.

Capitalism is surely all about letting failed companies go to the wall; letting them be resurrected, if possible, by some entrepreneur at x cents in the dollar. But not with banks. Amazingly, they are the exception. They are permitted to privatise their profits and socialise their losses–via taxpayers under perverse tax regimes–under the guise of being  ‘too big to fail’.  What rot!  What self-seeking nonsense!

Seems the Federal Reserve Bank of Cleveland has more than a hint of what’s gone wrong, but no doubt it will fail to see land-based revenues (instead of taxes) to be the solution:-

…. And it’s only just begun!

China has a long history of land ‘tax’ (ground rent).

Five centuries before Christ, Confucianism held it to be the fairest revenue system.  See Chapter V “The State”: Taxation, Innocent and Destructive (almost halfway down page) from The Ethics of Confucius, by Miles Menander Dawson, 1915.

The early part of the Ming Dynasty (1368 to 1644) was also largely financed from ground rent.

2400 years after Confucius, Sun Yat Sen announced the land ‘tax’ would be the foundation upon which he would build the new Chinese Republic: “We propose that the government shall levy a tax proportionate to the price of the land, and if necessary buy back the land according to its price.“

“When modern, enlightened cities levy land taxes, the burdens upon the common people are lightened, and many other advantages follow. If Canton city should now collect land taxes according to land values, the government would have a large and steady source of funds for administration. The whole place could be put into good order.

But at present, the rising land values in Canton all go to the landowners themselves — they do not belong to the community. The government has no regular income, and so to meet expenses it has to levy all sorts of miscellaneous taxes upon the common people. This burden upon the common people is too heavy; they are always having to pay out taxes and so are terribly poor — and the number of poor people in China is enormous.

The reasons for the heavy burdens upon the poor are the unjust system of taxation practiced by the government, and the unequal distribution of land power and the failure to solve the land problem. If we can put the land tax completely into effect, the land problem will be solved and the common people will not have to endure such suffering.”

With such history, whilst China’s new real estate billionaires will resist a ground rent, it’s not a big stretch to believe China may be the first country in the 21^st century to employ an extensive national land ‘tax’.

She may have to do so, in order to resurrect herself from the financial ruin the country will face when her incredible real estate bubble bursts.  She needs to capture the ground rent that should have flowed, equally, to all her people.

http://www.sxoliastesxwrissynora.wordpress.com/ Καλώς Ήρθατε στο Σάιτ! Did you know there’s a third way out of Greece’s financial plight? Abolish most of your damaging taxes and institute a BIG land tax–a single rate, ALL-IN land tax–NOT a property tax.  That way everyone, including the 0.1%, will pay their fair share!  And beware of the uber-wealthy trotting out their ‘poor widow’ argument to defeat this necessary initiative.  She can be looked after OK.

Have you noticed? Prosper Australia is the ONLY Australian body which:

– forecast this financial collapse
– explained it, and
– proposed the capture of economic rent instead of taxes to turn economies around.

Our members are from all political parties and from none, from all religions and none – so we’re not pushing any party line nor religious barrow.

Unfortunately, by failing to capture adequate economic rent via municipal rates and land taxes, the Labor and Liberal parties are both complicit in why we are where we are. They preferred to tax people for working and to reward them for rent-seeking in real estate.

John Howard and Peter Costello presided over the first part of our real estate bubble (from 1999 to 2007), and the Rudd-Swan, Gillard-Swan governments have kept pumping it up from 2007 by means of ‘negative gearing’ and the First Home Owner Grant and First Home Owner Boost.

Ken Henry’s recommendations for Australia’s Future Tax System are a step in the right direction.

We want more members. You’d not be throwing over your political nor religious allegiances if you were to join us.

You ARE, however, required to want Australia’s revenue to come from its land and resource rents, instead of from taxes (and their attendant deadweight costs).

If you agree with our aim, why not join us? We need your help.

JOIN HERE

Your $30.00 membership includes a subscription to our 104 year-old journal, PROGRESS.

From Zero Hedge

Ben Bernanke FTMFW Quote Of The Day

Submitted by Tyler Durden on 02/10/2012 12:35 -0500

And the winner is…

• BERNANKE: HOUSING MAY NO LONGER BE VIEWED AS SECURE INVESTMENT

That’s right. He just said that. And with that, a Lewis Black moment is coming on…

He also said some other stuff.

• BERNANKE SAYS HOUSING IMPEDING FED EFFORT TO SPUR U.S. ECONOMY
• BERNANKE SAYS HOUSING SECTOR SUFFERS FROM `SERIOUS IMBALANCES’
• BERNANKE SAYS HOUSING IMPEDING FED EFFORT TO SPUR U.S. ECONOMY
• BERNANKE SPEAKS ABOUT HOUSING MARKETS IN ORLANDO, FLORIDA
• BERNANKE: TIGHT MORTGAGE CREDIT WON’T BE EASED QUICKLY, EASILY

As a reminder, shadow inventory is now at a record high. But Cramer just called the housing bottom. For the 7th time. For the masochists among our readers, his complete comments can be found here.

Thanks Bubblepedia!

In BUSINESS INSIDER the Huffington Post’s Dylan Ratigan says the only way out of the mess now is to write down, or write off, debt that CANNOT be repaid.  He’s right!

The first three letters in THE AGE today defend the banks.  The fourth from a person who doesn’t identify with the left of Australian politics is implicitly critical of the Reserve Bank for not lowering the cash rate from 4.25%.

Most banking people are undoubtedly good Australians, as I’m sure are the three bank defenders.

But we’ve got to look deeper if we are to see the terrible, terrible legacy with which the banks have left Australia – because we’re going to have to deal with it shortly.

This criticism goes more to what we and our governments ALLOW the banks to do to us, with which the first three letter writers are obviously unacquainted. It’s not good.  Therefore we, not the banks, are ultimately responsible for what is about to befall Australia.

No, we’re NOT different from the US and Europe which are on their knees. And I hear today that the UK which seems to have slipped under the European radar has pump-primed its economy to the tune of $500,000 billion. Half a trillion! That’s good?

So where did we and the banks go wrong?

Well, we’ve fallen for the pea and thimble trick with taxes. We’ve come to believe ‘the only certainties in life are death and taxes’, so taxes have to be paid for the necessary running of government.

But have you noticed how taxes have risen substantially as a proportion of GDP over the last hundred years? “That’s the price of the social contract’, do I hear you say?

Nonsense. Taxes destroy.

What’s the alternative? Land and resource rents – because they DON’T destroy. They can’t be passed on in costs like taxes.

Oh, and sometimes we get this right.  I see we’re raising $3 billion from spectrum licenses.

Back to the point. As we capture only a tiny amount of our land rent for revenue, Australia has amongst the highest land prices in the world. I’ve dealt with the crappy, specious argument that our land prices are a matter of inadequate supply.

For which block of land would you pay less?

Of course! The one WITH the misnamed land ‘tax’ on it.  (It’s a rent.)

Now, as we do NOT capture enough land rent publicly, it’s privately capitalised into higher and higher land prices.

Banks lend on a combination of the depreciated value of a home plus the increasing value of the land.

This is wrong. Especially during a bubble in land prices.

Banks don’t care. They’re happy to fund you moving into your home – even during a residential bubble.  Their risk management goes out the door. It shouldn’t. In this respect, they are certainly at fault.

So, letters writers, although WE are also to blame for our ignorance in not capturing more of our land rent to keep land prices down, banks are NOT blameless.

I guess that’s why, despite its billions in profits, the ANZ bank has moved its mortgage interest rates up today. It’s provisioning for the forthcoming rout.

Maybe, but I’ll bet our BIG 4 will STILL end up putting their hands out for a bailout – because “they’re too big to fail”.

I want such a business! Rake in capitalised bubble-inflated land rent in 30 year mortgages in the good times, expect a handout from we the people in the bad.

We’ve got to remedy this sickness. It’s beyond time we discovered economic rent.