The central principle of the “Land Value Tax” which makes it different from normal Property Taxes, is that it would be the land only – so, for example, someone who kept land as a nature reserve, would pay the same tax as someone who built a factory on the land.
In the United Kingdom, since 1929, farmland has not been subject to Property Tax (called “Rates” here – a form of taxation that goes all the way back to Tudor times, first introduced to fund the Poor Law – most of Scotland did not have such a system till 1845, France did not have Poor Law style benefits till well into the 20th century), farmers, if they owned the land, would have to pay the Land Value Tax – thus turning farmers into tenants of the state. Although, of course, much would depend on how high the tax is – what really matters about taxation is not the exact form of it, but how high it is. There is no such thing as a “good tax” – all taxation is harmful, but how harmful taxation will be is determined by how heavy the burden of taxation is.
For example, property taxes in Alabama do much less harm than property taxes in New Jersey – but this is NOT because property taxes are structured fundamentally differently in New Jersey than they are in Alabama – it is just that they are much HIGHER in New Jersey, and, therefore, do more harm.
That is why, for example, the present obsession of the Tax Foundation with the exact way taxes are designed, rather than with the overall burden of taxation in American States (there has not been a State and Local Tax Burden report from the Tax Foundation since April 9th 2022) and European countries, is so disheartening – the Tax Foundation seems to have lost its way and is no longer really doing what it was created to do.
That discussion with supporters of the Land Value Tax is pointless can be seen from the Wikipedia article on the matter – the article is almost entirely a “puff piece” (any real criticism is quickly edited out – so much for “anyone can edit”) of both the Land Value Tax and the economic (the false economics of David Ricardo and others), philosophical, and even theological, theories behind it.
In the West one example of the theological thinking behind the Land Value Tax is the idea, to be found in John Locke and others, that God gave the world to humanity in-common and that, therefore, private ownership has to be justified – either by “as much and as good left for others” or by some form of financial payment (to be collected by the state – for some reason).
Logically a supporter of the idea should be against population increase, for example against immigration, as the more people who came into an area – the more landless people there will be, so the less money each landless person would get (in various benefits and services) from the Land Value Tax.
Henry George reflected this – with his opposition to people going to California, even opposing the building of railways as this would make it less difficult for people to go to California. Even the “Christian Socialist” John Rawls (once very popular in academia) seems to have rejected the idea of a world tax – holding that American taxes should go to Americans in terms of welfare state programs – of course if one “imports the Third World” (the policy of many in the Democratic Party since 1965 – especially during the Biden Administration of 2021 to 2025) then government spending does go on the poor of the world – as they have come to the nation (the same is true in Britain and other nations). Claims, by the CATO Institute and others, that Third World immigrants are “net taxpayers” (that they provide more in taxes than they take in benefits and services) are false. Ideologically motivated deceptions.
For those people who reject the theological basis of the Land Value Tax (and its real basis is theological, see above, rather than in the false economics of David Ricardo and others), the matter is of little interest – if one holds, with Hugo Grotius and others, that God did NOT give all land to humanity in-common – then no “justification” of private ownership is needed, either by “as much and as good left for others” or by some form of financial payment.
On migration – before anyone points it out, I accept that the party that won the Hungarian election promised to be stricter (not less strict) on migration that the government of former Prime Minister Orban – my contention is that they will accept the 35 Billion Euros from the European Union by accepting the migration policy and other European Union policies.
If they do NOT, if the new government of Hungary TURNS DOWN the 35 Billion Euros – then I will formally apologize, on this site.
It’s been 7 Years since your last post @Paul.
As for your point, “All taxation is theft”. Is simple but accurate.
We might well abide by some less burdensome approaches (like Georgist Land Value Taxation) as more justifiable, but even the most justifiable is still a burden to be bourn.
Surprisingly, the problem is not excessive taxation, it is excessive spending and the demands of the state. The excessive taxation required to pay some of it (the rest being put on the national credit card for our grandchildren), is just an effect of the demanded spending.
Cut spending to the absolute necessities and then purge taxation to the point necessary to pay for it. Then ensure the welfare spongers can’t vote themselves largess out of the treasury (again) by giving the vote only to those who are net taxpayers in receipt of £0 funds from the state, so teachers, central and local government staff and the like can’t vote either. You work for an organisation that takes a single £0 from the state (other than as payment for goods and services received), then you don’t get the vote. This includes charities and NGO’s.
That would stop the creep for a while.
Plus no more deductions at source. If the government wants the money, it must demand it in full from the taxpayer. That might crystallise things for the hard of thinking. Noticing what’s been stolen from you on a wage slip is a far different matter to having to write out a cheque for many, many thousands of pounds tax every year.
Would a land value tax be sufficient?
Dan Souter – yes I have commented a lot, but not sent in any posts in for publication – even this post was a comment.
I fully accept your correction that the core problem is government spending – and that financing this spending by borrowing, or by creating Credit Money from nothing, is just as bad as taxation.
Yes Sir – I stand corrected, the core problem is high government spending, it is this high government spending that leads to everything else.
On deductions at source – Rose Friedman condemned her own husband (Milton Friedman) for developing the Federal withholding tax system during World War II (before the war only rich people paid income tax in the United States – which is one reason why the top rate go so absurdly high, over 60% was approved even by the supposedly conservative President Hoover) – if people, ordinary people, had to calculate how much income tax (and “Social Security” tax) they “owed” and had to pay it in one lump sum, at the end of the year, that would really bring home to them how high the Tax Burden is.
NGOs “Non Government Organizations” are indeed a scam (an ideological fraud) if funded by the government – as such NGOs are really political organizations giving paid jobs to leftist activists and pumping out endless agitprop – as in New York City (a city that has little manufacturing left – and is funded by the government Credit Money, Federal Reserve system, dependent Financial Industry).
By the way there are areas of very conservative South Dakota that are actually more Collectivist than even New York City – namely the Indian Reservations, such as Pine Ridge, where land is owned by the tribe (not by individuals and families) and there are endless “free services” managed by democratically elected Tribal Councils.
This has been going on for more than 90 years (since the Act of 1934) – and the continued support of the American left-establishment (and the establishment is on the left – very much so) for this system shows they have no interest in reason or experience, and do not really care about poverty – anyone who looks at Pine Ridge and thinks (as academia, and so on, de facto do) “yes – the whole country should be run like this” is a monster.
There really is no rational refutation of this – other than naked racism.
After more than 90 years of rule by democratically elected Tribal Councils (controlling the land and a lot of other things) either the incredibly poor “Native Americans” are “racially inferior” (and I hope no one is going to defend that position) or this semi “democratic socialism” causes-harm.
Yet the American left, from Harvard to Hollywood, remains committed to Collectivism – totally disregarding both reason and experience. At least they are in their politics – in their personal lives they do NOT give away their property.
I seem to recall that the Plymouth colony instituted a similar collectivist approach in 1620…and abandoned it in 1623 as completely unworkable.
You’d think the American Indians (feather, not dot) would have realised this by now…probably if they weren’t so caught up in their own grievance culture.
Do the Yale people look at New Haven (where Yale is) and notice that Big Government does not work?
How about the people of Harvard looking down the road at Boston – and seeing what Big Government is doing to the place?
Or the people of Columbia University having a good hard look at the results of the Progressive policies of New York City?
No – they ignore failure in practice, just as they ignore counter arguments before the policies are enacted. “Everyone agrees” that local government should do XYZ as J.S. Mill (NOT that I am saying he was a socialist – he was NOT) used to say – with “everyone” actually meaning a certain group of people (Mr Mill really meant “everyone who-matters-to-me agrees” – which was also his view on the Labour Theory of Value – everyone who-mattered-to-him, agreed with it).
They are like Plato (the founder of Collectivism – at least in Western thought) – they dismiss all opposition as “shadows on the cave wall” (and discussion of said-shadows) in their minds only the “Forms” (total abstractions) have any real existence – and they just happen to be, at least in politics, Collectivism, which is (for some reason) considered Divine.
In Cambridge (England – just as in Cambridge Mass) the move from Plato to Karl Marx may seem strange in general philosophy – but, in politics (in political philosophy), it was a short step.
Dan Souter – yes indeed Sir.
Governor Bradford abandoned communal ownership (and “fair distribution”), because it led to starvation.
The American left (who control most things) do not like the fact that the colony was saved by establishing private property in land and ending the “fair distribution” of food and so on – so they have reinvented history as the starving colonists being saved by noble tribesmen.
But one must remember that most “Native Americans” did not campaign for the Act of 1934 – it was imposed by the Collectivist ideology of the New Dealers.
There were three factions of New Dealers, the ones that admired Fascist Italy, the ones that admired (the even worse) Soviet Union, and the ones that did not think in such theoretical terms – but just viewed the government spending and regulations as an opportunity to personally profit at the expense of other people, real “exploitation and oppression” – rather than the fake “exploitation and oppression” by “capitalists” or “Economic Royalists”, that they claimed to oppose.
The father of Ronald Reagan was a New Deal bureaucrat – and spent the money he got on booze (Ronald Reagan, as a boy, had to drag his drunk father home – otherwise he would have perished in the street), he was typical of the third sort of New Dealer.
The father of future President Carter was a Democrat Congressman who had strongly supported Franklin Roosevelt in 1932 – but he (Congressman Carter) was so disgusted by the New Dealers going around killing farm animals and destroying crops (whilst pretending to care about the poor), and demanding “favors” (including cash) for letting people off various arbitrary regulations, that he (against a tidal wave of radio propaganda – 1936 was the first election dominated by a totally biased media) supported Alfred Landon in 1936 – a bold thing to do in the Deep South in the 1930s.
The media, and most history books (including all the ones used in schools and universities) present the “New Deal” as some sort of noble enterprise with good results.
Did the New Dealers know about the millions of deaths in the Soviet Union?
The senior ones certainly knew – hence their efforts to destroy the files of the old Russian Section of the State Department.
They (the senior ones) knew – but they did not care, they did not care about the death of millions of human beings.
And their “friendship” activities with the Soviet Union were NOT a response to World War II – they were active in the 1930s.
As Paul Johnson (“A History of the Jews”) points out – in private (private – not when he was trying to get Jewish votes in New York) Franklin Roosevelt did not care about the murder of millions of Jews by the National Socialists (Nazis) either, indeed he, Franklin Roosevelt, cited (in the 1940s – in response to appeals to attack the Death Camps and Death Railways of the Holocaust), as truth, the lying (false) Nazi statistics about Jews dominating the professions in Germany in 1933 – as-if this supposed “exploitation and oppression” of non Jews by Jews was a “Social Justice£” justification for what Mr Hitler was doing.
Which comes to the other point about the power of government.
Power corrupts and absolute power corrupts absolutely.
The excessive power of the state to tax and regulate individuals and corporations into oblivion is illegitimate and arbitrarily enforced, deliberately and specifically so that corrupt bureaucrats from all three branches of government can extort individuals and corporations with that monopoly on the use of force which is at the heart of government.
The billions (and probably trillions) stolen through NGO’s running fake medical and childcare services to funnel money to corrupt bureaucrats and elected officials (after taking their skim off the top) is widespread and not just in the US, the UK has it’s own versions of this in the QUANGO’s and NHS.
Spending that is not subject to rigorous audit and financial control is simply stolen.
When that has been dealt with, what need for more taxes?
My model for reform is that of Millei in Argentina.
I have fantasised that all taxes should be replaced by a single tax – the New Value Added Tax. Apart from a few adjustments (fuel, for instance) there would still be a zero rated NVAT for items like basic foods and childrens’ clothing. I guess the standard NVAT rate would be around 50%.
What would be the point of such an exercise? It would be disruptive at first, but if people kept all their earnings they could choose to buy basic items free of NVAT. Employers would not be dunned for various ’employment taxes’ like NI. Book keeping and tax accounting would be greatly simplified, and opportunities for tax evasion limited. But the biggest benefit would be oversight of the costs of Government. Spendthrift Governments would be obliged in increase the NVAT rate and would be judged accordingly. None of this stealth tax shenanigans.
Well done @Discovered Joys – Now enjoy the smuggling and NVAT evasion problem which would be near universal.
Hey chat, what does gish-gallop mean?
For example, the Tax Foundation will produce detailed reports on various aspects of the tax systems of various European nations – but basic information on the total tax-burden (taxation as a proportion of the economy) NO.
Dan Souter – yes “the power to tax is the power to destroy” (I believe that was Chief Justice Marshall) – and both both taxes and regulations can be used to destroy people.
And, as you have mentioned before, it is government spending that is the real problem – high government spending (however financed) corrupts everything.
Roger Sherman pointed this out at the Constitutional Convention – if government spending could be increased without limit, and money itself could be debauched (made the play thing of governments and bankers – not a physical commodity such as gold or silver) then all the talk of “liberty” and “freedom” was vain – as the nation would, eventually, collapse into tyranny and chaos – which are not opposites, they are kin.
And, as Richard Cantillon pointed out three hundred years ago – Credit-Money not only distorts (twists – corrupts) the Capital Structure of the economy – it also promotes extreme, artificial, inequality – this is known as the Cantillon Effect.
Paul:
And if the Magyar government manages to get most or all of the 35B euros without making concessions on migration, only on Russia/Ukraine, will you also apologize?
Dan Souter:
Hear, hear!
But a cautionary note is in order: one might cut military spending to (what appear to be) the absolute necessities, only to find out that that is not sufficient to prevent a Russian or Chinese invasion.
This is sensible as a first approximation.
However, people with a Machiavellian turn of mind will notice that this leaves too much room for abuse. For instance, net taxpayers might decide to enslave the rest of the citizenry; or at least reduce them to serfdom — a tax in all but name.
For this reason, i suggest a bicameral solution: the Lower Chamber elected by one man, one vote; the upper chamber elected by one taxpayer, one vote.
Except that, in this case, anybody who pays a few bucks in taxes would have as much input as Elon Musk, while anybody who receives just a few bucks from the government would have no input at all.
That does not strike me as sensible. A possible solution is to give voting power proportional to the logarithm of NET tax contributions.
My emphasis. I just want to note that i am in 2 minds about allowing people to vote if they work for, or own shares in, any company that earns money mostly by providing goods or services to the government. But i won’t expand on that.
“if ordinary people had to calculate how much income tax (and “Social Security” tax) they “owed” and had to pay it in one lump sum, at the end of the year, that would really bring home to them how high the Tax Burden is.”
The State would never allow that, because they know full well they would never get the money out of a large proportion of the public. Even if you ignore the obvious ease with which tax evasion would occur (just keep giving false information or moving addresses, like people did to avoid the poll tax), many people live hand to mouth, there is no way they would manage to put aside 10-20% of their income and not end up spending it all due to some emergency or other between getting paid it and having to pay the tax man. The tax authorities in the UK struggle now to deal with all the self employed on self assessment, and there’s only 5-6m of them, imagine the chaos if they had to deal with the tax affairs of ten times as many, a large amount of who live chaotic lives. They’d get a fraction of the income tax revenue they do now.
Now I’m sure you’ll say this is a feature not a bug of the concept, but there’s no way any State is ever going down that road. We are stuck with PAYE type income tax systems, the thing to focus on is making those taxes as low as possible, so they impact as few people as possible, not imagining high taxes can be negated by different types of collection process.
I already said “Yes”, you don’t have to sell it to me.
It’s about restricting the potential for state expansion within as tight a boundary as possible.
Making it hard to squeeze taxpayers for cash is a means of putting the government in a straight jacket and preventing it spunking money away on white elephants and favoured projects / constituencies.
I agree that taxation is harmful. But it also should be considered that government expenditures are harmful even if they are not paid for by taxation, but by credit expansion. The resources that the expenditures purchase are still being diverted from productive uses, and the value of monetary holdings is still being diluted by expansion of the circulating medium, which takes value away from people with cash balances, as surely as if they were being taxes. In fact inflation is a wealth tax on specific forms of wealth. One of Ronald Reagan’s disastrous errors was cutting taxes without the unpopular step of cutting spending, not least because it deluded many conservatives and some libertarians into thinking this sort of invisible tax was a good thing.
Snorri Godhi – I had not thought of that.
On reflection – yes I think I will apologize if that comes to pass. If the new Hungarian government manages to get the money without making concessions on migration (and Net Zero – and so on), just by nodding through the tens of Billions of extra Euros for Ukraine.
But how can the European Union pay Hungary 35 Billion AND pay vast sums of extra money to Ukraine?
I suppose they could loot the Russian investments that were frozen in 2022 – the money that Mr Putin stupidly left in digital form in Belgium (where it could be frozen) rather than insisting in payment (for the various raw materials, and so on, that Russia sells) in physical gold or silver – and storing the physical commodity in Russia itself.
As the old ruler of Abu Dhabi pointed out in the 1960s – payment in Western Credit Money is a TRAP – this “money” can be frozen at any time (as it has no physical existence) – it means that the Western governments and bankers have their boot on your throat.
We did not like his demands that he continue to be paid in gold (for his oil) – so he was removed from office.
Pope Benedict XVI was removed in much the same way – the electronic money system was turned off for the Vatican, and the international community (the Obama Administration and allied banks) did not turn it back on again till he announced his “resignation”.
The next two Popes have been reliable members of the international community – on the same page, politically, as David Axelrod and co.
William H. Stoddard – I quite agree that government SPENDING is the key problem, everything else flows from this.
If the founder of the American left (critical of Christianity and pro government spending “for the good of the poor”) was Thomas Paine, then the founder of the American right was Roger Sherman – and he made the point you have made, and made it repeatedly.
If government spending goes higher and higher and “money” is not a physical commodity (such as gold or silver – although it can be other physical commodities that people value before-and-apart-from their use as money) but is, rather, just the plaything of governments and bankers (just bits of paper and book keeping tricks – now on computers) – then talk of liberty and freedom is vain for, eventually, the nation will collapse into tyranny and chaos – which are not opposites, they are kin.
By the way – the last President to cut government spending, from a peacetime total, was Calvin Coolidge (NOT Herbert Hoover – as the lying establishment falsely claim).
Ronald Reagan admired Calvin Coolidge and also tried to reduce government spending – but, overall, he did NOT succeed in doing so.
(My emphasis.)
I feel that Truman also deserves a mention.
He paid off a relatively huge amount of government debt
— by cutting spending
— against the advice of “experts”.
And he was a Democrat, and a protege of FDR!
Snorri – yes government spending went down after World War II, dramatically so. But that was the reduction of military spending.
As for Harry Truman – he suggested “Fair Deal” government spending programs which the Republican Congress (elected in 1946) refused to pass.
The surpluses of the late 1940s were the doing of the so called “Do Nothing Congress” – not Harry Truman, who kept proposing spending.
The big problem with Land Value Tax is that it favours corporates, who pay LVT out of gross income, over individuals, who pay LVT out of net income.
Quentin: “net income”? Net of what, exactly?