Once again, the OECD recommends that Australia adopt “growth-enhancing tax reforms”, including rebalancing the tax mix away from personal income tax to GST (with appropriate shielding). So many experts, with so much evidence, say this over and over, and yet we still have so many politicians who are the tax-reform equivalent of anti-vaxxers. Google “oecd economic surveys australia september 2021”
Dr Terry Dwyer The Treasury uses the OECD to lobby politically and put pressure on the government of the day, so take cum grano salis.
Second, OECD tax burden comparisons are worthless, since superannuation and workers comp in our systems are taxes in many European systems.
Third, Y = C + S, so a GST increase is equivalent to a flat rate income tax which exempts savings. Try selling a flat rate income tax of 10% with no tax free threshold, an exemption for foreign landholders not spending here and an unlimited super tax deduction… same thing pretty much.
Fourth, another twist. Consumption is mismeasured. A farmer gets write-offs for sheds for his pigs, a father and mother get no deduction for raising children to replace them as labourers. Yet labour is a factor of production as much as capital. Adam Smith understood this which was why he opposed taxes which would diminish the future supply of useful labour. So did Manchester merchants who wanted the Corn Laws ended.
I trust this does not mean I am regarded as the economic equivalent of an “anti-vaxxer”. If so, dump me in with Adam Smith, JS Mill, Henry George, Harold Hotelling, William Vickrey and a few more economists.
I don’t see blogging here about the world’s descent into the 2026 depression for 13 years—i.e. as long as The Keiser Report, but without all its followers 🙂 to have been a negative thing. Quite the contrary, it’s a matter of describing ‘what is’ — or as my academic brothers and sisters would have it, I’ve employed a positivist approach to describing the depressionary half of the fourth Kondratieff Wave.
It’s quite clear that this method is at odds with neoclassical economics and the mainstream media’s coverage of socio-economic events. Not that I’m an economist. It’s probably that my more practical experience as a valuer of real estate in the Australian Taxation Office, the Commonwealth Bank of Australia and founding a private valuation practice held me in great stead to provide more credible insights than most economists and media commenators. (Giving myself a bit of a pat on the back here, if you’ve not noticed. )
On my journey, I’ve been fortunate to make the acquaintance of economists having similar views to my own. They’d probably be described as having a heterodox understanding of economics, including visionaries such as Mason Gaffney, Michael Hudson, Fred Harrisonand Steve Keen.
It was Henry George who set me on a course different from the mainstream with his simple but compelling distributional equation
showing that labour and capital will receive their full incomes (W and I ) undimished by arbitrary taxation were we to remove unearned economic rent (R) from GDP (P). By not doing so, taxes and their enormous deadweight losses and land prices will continue generating background inflation, 18-yearly recessions and (eventually) a financial depression.
I find it amazing that we have managed to ignore Henry George and his followers, including my colleagues at Prosper Australiafor some 140 years, insofar as this approach would not only have abolished poverty but have been able to provide a universal income such as Guy Standing and others advocate today. George also had a good grip on monetary theory as described by Stephen Zarlenga and more recently by Stephanie Kelton. Not at all bad, Henry George!
It’s a pity that not all UBI-ers and MMT-ers have been able to put the whole VIMMLBUTT together yet; they’re only seeing part of the elephant.
It’s difficult to to be confident that artificial intelligence will be ‘ethical’ when education and science has had nothing to say about publicly generated wealth being expropriated by the rent-seeking 1%.
THAMES STAR 8 August 1888, p.2 [Volume XX Issue 4684]
“Socialism as Propounded by Hyndman”
At the meeting of the Debating Society last evening Mr EH Taylor read a paper on “Socialism” and gave a very able and exhaustive digest of the rise and development of Socialism as propounded by Mr Hyndman.
He referred to the time in the history of England between the end of the fourteenth to the beginning of the sixteenth century, when the working classes were better off in every respect than they have ever been since. This has been very aptly termed by Socialists the Golden Age of the People.
Mr Taylor traced back the origin of Socialism to the peasant insurrection of 1381 which was fostered by the growing ideas of liberty and equality and the enforcement of the system of villainage by the lords, nobles and landlords. Against this tyranny they rebelled, and Wat Tyler, a priest named John Ball, and others came to the front as leaders of the insurrection.
About this time, what were called craft-guilds were formed and are described as combinations of the working classes for the maintenance of their freedom. These craft-guilds were, we presume, something similar to the trade unions of the present day, and against the former special Acts were passed which, however, as Mt Taylor showed, proved abortive owing to the social tendencies of the people.
Mt Taylor, in speaking of the wrongful intrigues which about this time existed between the so-called upper classes and the Roman Catholic Church for political purposes, expressed his utter disbelief of the stories that have been told by Protestant Divines of the debauchery and hypocrisy of the Roman Catholic Church and of the squandering of the revenues of the Church in riotous living.
In the Church, he said, we have seen even in its bitterest times, more equality and opportunities to rise than in politics and social life. Outside the Church, a man must bow down to some Baron whether he be a gentleman or a ruffian. But inside the Church we find Sextus V rose from the gutter, and Nicholas Breakspear Adrian IV was a poor labourer’s son. Many of the most distinguished ecclesiastics were of humble birth. Then we have much to be thankful for in that many things have been preserved for us in the Catholic Church which we should not now be blessed with had it not been for her safekeeping.
One significant fact, Mr Taylor stated, was that so long as the Church held her great power and vast acreage, permanent pauperism was unknown. During the People’s Golden Age, land was regarded as the means for raising food and stock, not as a capital to return so much rent in order that the one might live at ease while the one who did the work might simply stave off starvation. In this respect, if in no other, Englishmen then were certainly more independent and vigorous than those of the present day.
This happy Age, however, passed away and was followed by an Iron Age in which owing to troublous times in England the nobles began to decay. Their estates were reduced and they had to discharge their retainers who became vagrants, beggars and wage-earners, their very lands being seized by the nobles. The result of this land-grabbing was that a population, before prosperous, was reduced to poverty and the gravest discontent was caused which culminated in great risings during the period from 1536 to 1568. These were partly caused as well by religious bitterness.
At the accession of Henry VIII, the lands of the Church comprised about one third of the total lands of the Kingdom and were held in trust by the Church for the people, the funds derived for these lands being for the maintenance of schools, universities, roads, hospitals and poor relief. When Henry seized these lands and distributed them to his favourites, the last hold of the people on their soil was wrenched away and they were at once deprived of their livelihood, shelter, schools and alms.
Thus is seen how Socialism grew among the masses who, feeling themselves unjustly oppressed and robbed of their birthright rose against their great enemies – the nobility and gentry of the country.
Mr Taylor here mentioned the risings that at this time took place, and referring to Robert Kett, one of the leaders of the Norfolk rising in 1549, quoted pages from an address delivered to him, the last sentence of which: “Patriotic aristocrats employ foreign soldiers to reduce their country to subjection after robbing and starving the people”, Mr Taylor said was applicable to the present state of Ireland.
Socialism is a protest against such a cruel system and while it does not fight for the equal distribution of property, it does say that property should be so distributed that t would be impossible for one man to be extremely poor and another excessively rich.
After describing the various modes in which Socialism has been developed since the reigns of Henry VIII and Queen Elizabeth, all of which are very interesting, but which our spece compels us to curtail, Mr Taylor spoke of the Chartist movement which reached its culminating point in 1842 and concluded in the following words: “Since Chartist times, the Socialists have been engaged in efforts to repeal numerous laws that disgrace our statute book, and also to pass numerous others for the social wellbeing of the wage-earner. The Factories Act and numerous Amendments, The Ten Hours Bill and Extension of the Franchise may be quoted as examples.
Socialists principally engage themselves in educating the working man to a higher standard of political and social intelligence in such questions as the land laws, land and its uses, the agricultural laborer in relation to land, the artisans of our city and how to tide over periods of depression, centralization of masses of people, local self-government. Co-operation, production, exchange, our city workers, overpopulation, able-bodied pauperism, the poor laws, international labor movements, &c.
Socialists watch the history of human development in social life and utilize change, development, evolution, revolution, and sometimes decay, to forward human interests. This much we can say that Socialists have proved, that all movements for the benefit of the greater number have begun among the working classes and worked upward through all shades of society. Reforms never have begun among the lords and nobles and descended to bless humanity in its struggle for life. Socialism is opposition to force, rapine, trickery and fraud. And it is now mostly seen in the spread of the land nationalization scheme, no new idea, for Thomas Spence of Newcastle formulated it 110 year since.
Now, while some may think these things a dream, this is a fact, that Socialism is increasing to a marvellous extent, and politicians are being driven almost unconsciously toward Socialistic measures. Socialist leaders are mostly profound God-fearing men and this is how they express themselves in words, and the principle that moves them to work for “the greatest good for the greatest number.”
An interesting discussion followed, in the course of which Messrs McGowan, Heriot, Wood, Martin and Haselden took part, after which Mr Taylor replied.
Maybe the RBA doesn’t want to offend (1) real estate agents whose fee scales have them committed to higher and higher land prices, and (2) the banking industry whose easy credit/debt policy pumps up land prices and its super-profits?
It’s more than obvious that Joe and Joan Sixpack don’t feature at all in RBA considerations.
But then, as Poirot mentioned, it’s land prices and taxation generate inflation, not simply “excess money” or “excess demand”, and the RBA are not likely to advise governments (of any persuasion) about that truism, either.