We miss much about the real generators of inflation.

Bill Mitchell isn’t noted for his friendliness towards land taxers.

…. was a good episode.

The earlier part of the program about the economy and the cost of living was disappointing though, because politicians on the right are clearly wrong, and those on the left are lost.

The nearest to getting the economy right was writer Thomas Mayor. He might even agree with my proposed preamble to the Constitution: A treaty?

And, of course, taxing land values captures all externalities, perfectly. Those living in rural and regional areas where transport costs are dearer will pay less because land values aren’t as high as in the capital cities where toll roads instead of an all-in land tax have become pathological.

And the big rent-seeking corporation would finally pay their fair share, because land can’t be hidden or flee to Singapore or other tax havens.

With such a Treaty in place, Australia would experience genuine prosperity for all.

Milton Friedman said: “Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

OK, Milton, but let’s be more specific, because ‘money’ is a far too generic term. How about some detail and home thruths:?

Inflation is always and everywhere land price escalation, together with taxes on labour and capital passed on into prices; and, to the extent land rent is not captured publicly, wage increases & cash benefits are absorbed into higher land prices.

The reverse is true, of course: If we were tax land prices significantly, we may have higher wages and earned profits – without inflation!

In the olden days, our ‘betters’ used to be the uber-wealthy who captured the land rent, namely, the aristocracy.

Nowadays, it more difficult to discern who comprises the underclass, because many who aspire to join the uber-wealthy also attend private schools and have also become rent-seeking landlords. Good luck to them!

With very few exceptions though, it’s all magically done by taking on massive amounts of debt, and the debt has become too easy to come by. In this regard, the question may be asked of the Reserve Bank of Australia whether it has become too cosy with the very bodies it’s meant to be regulating.

I guess we’ll learn who’s in the underclass when Australia’s land price bubble bursts and the tide of debt recedes to expose our nakedness?

A very enjoyable Zoom meeting this morning on the cost of living and the upcoming budget with ACTU President Michelle O’Neil and policy director at the Centre for Future Work, Greg Jericho. It was hosted by Ebony Bennett of The Australia Institute.

It would have even been more enjoyable had they been able to get to my questions:

“Unions and the ALP once acted on the inverse relationship between escalating land prices and wages by introducing the federal land tax. Why is land tax no longer part of progressive political discourse (as recommended the Henry Tax Review)? Instead of taxing wages, wouldn’t paying the rent for the land we occupy also honour our first nations peoples more than platitudes?”

I was a guest on Ian McNamara’s “Australia All Over” in the ABC’s new Melbourne studios in 1997.

In his show today, he read out an email I sent him last week about the terrible floods in Queensland and New South Wales :-

“You might remember I was a valuer who worked in the Australian Taxation Office and the Commonwealth Bank before co-founding a valuation practice in Melbourne.

Macca, Australia would have been much better prepared against fire and flood if we had great civil engineers like John Bradfield and Sir Ronald East around.

Ronald East had a role in Australian post-war reconstruction, arguing that flood abatement infrastructure paid for itself by generating jobs. It also raised the land values which we taxed more in those days than people’s wages.

We should thank our forebears that they just got on with building highways, railways, dams, schools and hospitals without today’s neoliberal nonsense: ‘Where’s the money to come from?’

As we tax labour and capital to a standstill, maybe we need to see the money should be coming from taxing land values, as in the days of Bradfield and East.

We’re missing essential infrastructure because we’re too busy pumping land prices to the moon”, says Bryan Kavanagh.

If you read this excellent piece, it follows that we tax labour, capital, goods and services even though it’s unethical to do so!

It’s a pity they ran to retired nitwit professor Jeffrey Chapman who says “The numbers don’t add up”.

I hate to disabuse you, Prof, but John Locke was correct that all taxes come out of rent anyway, so if we can levy these burdensome taxes and all their deadweight losses, all the dross disappears if we were simply to tax land rent away.

And people and the economy would both prosper!

https://www.theatlantic.com/national/archive/2019/04/henry-georges-single-tax-could-combat-inequality/587197/