The $80 billion never existed; it was just another wild, unffordable Labor promise

Wetherill is a Labor premier: couldn't run a church fête and has ruined SA.

Housing is up because of stupidly low interest rates which give a false sense of prosperity and ready money. Even people who do not borrow have to pay more. Production has not inceased to match the cheap money supply.

Baird is a small 'l' liberal premier with a corresponding attitude to other people's money. He has tossed $47 million into 'deradicalising' would be terrororists who are already costing us billions due to their welfare dependence.

The GST and other taxs will go up because our Left-wing PM is another big spender.

ttbn,

When the government spends money, it exists regardless of whether or not it existed before the government spent it.

Labor premiers in SA tend to do slightly less damage than their Liberal counterparts. Wetherill's not really been that bad. Rann was much worse (though in his first term where he didn't have a parliamentary majority, he was much better).

Housing is up because of low interest rates, but what's "stupidly low" is the government deficit. Were the government willing to borrow more, the RBA wouldn't have to slash interest rates to try to get the private sector to stimulate the economy.

Debatable! very debatable! And just one man's opinion at the end of the day!
Rhrosty.

Land taxes are like putting Dracula in charge of the Blood Bank. Anyone who pays Council Rates knows there is a huge disconnect between the rateable value of the land and the market value. Any time they want more blood er tax, they change the rate or the ascribed value, and the victim er landholder, has no say in the matter. The only time anything has a monetary value is at the moment of sale when the buyer and seller agree that price and in the currency used. A simple spending tax at a low, predictable rate, has many advantages. My book Your Future in Your Hands details the flaws in a Land Tax and the Debits Tax and others.

" Land Tax is the only revenue mechanism to generate positive benefits for the economy."

This is wonderful news. Why not make it 100%? Imagine how rich we'll all be then!

Amazing how people lack critical thinking about even the most obvious drivel when it comes to government.

Notice how the author, in an article about appropriate tax in the public interest:
1. does not define the public interest?
2. does not define the appropriate rate of tax?
3. does not define the State?
4. does not define efficiency in taxation
5. does not define a net benefit from taxation
6. does not give any concern or attention whatsoever to the question what government should or not should not be doing with the money it raises?

I once heard John Fairburn, a distinguished economist, discuss the whole range of taxes. Land tax has many advantages

It is a wealth tax

The ownership of this wealth is unambigious, no cunning lawyer can get around it.

It is a brake on speculation

It is easy to collect, just add it on to the council rates.

Outrider

All tax is a wealth tax, obviously.

Are you saying that wealth is a bad thing for society?

John McRobert,

Misevaluation of land is potentially a very big problem, but it's not unsolvable. What's needed is a transparent independent process (including the right of appeal).

___________________________________________________________________________________

Jardine,

"All tax is a wealth tax, obviously."
What seems obvious isn't the same as what's true. Many taxes aren't wealth taxes at all. For example the GST is not a wealth tax.

"Are you saying that wealth is a bad thing for society?"
When wealth results in those who don't have it being excluded, it certainly can be.

But the objective of land tax (other than to raise revenue) isn't to destroy its value, but merely to slow down the increase in its value. It must be phased in slowly to avoid unfairly disadvantaging those who've just bought land.

How much of every article do you think should be devoted to definitions?

But if you like, I'll have a go at defining the appropriate rate of land tax:
More than 1% of unimproved property value per year.
Less than 5% of unimproved property value per year.
Not rising more than 0.1% of unimproved property value per year (except when combined with measures such as abolition of GST).

As for your complaint that it doesn't define the State, perhaps that's because it doesn't actually mention "the State", though it mentions specific states and state governments in general.

Income tax reduces the incentive for people to earn and hence contribute to the economy.
Wealth tax, such as land taxes, catches those people who have amassed a fortune but do nothing with it it

ttbn, every time i see a local or state politician all they ever announce is how much money they are going to waste & then they wonder why we hate them.

Aidan, why do you want to create more poverty for the workers by destroying more jobs with a high debt economy?

Rhosty, why is there no mention of spending cuts or the planned obsolescence designed into ALL of the public sector? i have seen public housing deliberately designed to create jobs for gardeners, maintenance men & fall apart quickly so that the building can be bull dozed & replaced with another CFMEU job creation scheme.

John McRobert, the spending would not keep rising if they did not continue to bring in dead beat UN-productive migrants.

Jardine K Jardine, read my comment above about planned obsolescence on the spending side.

Outrider, why don't you want the workers to have affordable housing?

Jardine K Jardine, he just wants workers to be poor.

Aidan, why do you want to create MORE poverty for Aussie workers?

Outrider, people who own assets make money out of it & pay tax when they earn & spend it. Why are you so desperate for the land of OZ to be bankrupt?

Good article, Karl Fitzgerald! Naysayers here seem to be entirely disregarding that Australians have become more invested into making money out of real estate than in the real economy. Surely, what has occurred in the US, Ireland (and Europe in general) show this has to end badly? ALL the recent tax studies indicate land tax is the most efficient because it doesn't carry the deadweight of other taxes. It's patently fair, because the wealthy own more valuable land than others and, moreover, is the only tax that can't be avoided. Oh, "can't be avoided"? Maybe that's why people reject what is clearly the fairest and most efficient tax of all?

Jardine, please define 'define'.
The other definitions you seem to think are necessary are mostly in the Reports referred to. Read the Treasury paper. That might help you understand efficiency, and net benefit. Do you really need the State defined, or the public interest. Most intelligent people have an understanding of them, so your post looks like a troll.
And what a grand idea you post in jest. If we tax the value of land 100%, land would have no price, so there would be no incentive to hoard it, or to speculate in it. People could get use of it, subject to that fee you propose, and use it for production. A radical idea, supporting initiative and enterprise, I know, Jardine, but I do believe you've got it.. You just don't know what you've got.
A thoughtful article, requiring an open mind to consider some of the concepts. More please?

Thanks for the article Karl Fitzgerald. The benefits of land value tax should be a first consideration in tax reform.

Our society is conditioned to consider land ownership as just another form of wealth like shares, buildings or other man-made possessions.

Land is provided by nature, location is critical, and is it an absolute requirement to do anything at all in life – you at least need a place to stand.

If it had been physically possible to parcel up the atmosphere and privatise its value we would accept that as normal and be having discussions about the unaffordable cost of breathing.

Economist Joseph Stiglitz was interviewed about Thomas Picketty’s conclusion that ever increasing inequality is driven by returns on wealth being greater than the economic growth rate.

Stiglitz said, ‘A closer look at what has gone on suggests that a large fraction of the increase in wealth is an increase in the value of land, not in the amount of capital goods.’

He goes on to say:
‘What has happened repeatedly in recent years is that we’ve had monetary authorities allowing — through deregulation and lax standards — banks to lend more. But this lending has not gone for creating new business, not for capital goods. Disproportionately it has gone to increase the value of land…’

This is a link to the article:
http://www.salon.com/2015/01/02/joseph_stiglitz_thomas_piketty_gets_income_inequality_wrong_partner/

Our tax system socialises our private incomes via income tax and privatises our social income –the community generated rising value of land. This becomes the preferred investment, causing unaffordable sites for housing and business and high private debt.

Change can only be incremental but a move towards a greater tax base from land needs to be a first objective.

imacentristmoderate,
"Aidan, why do you want to create more poverty for the workers by destroying more jobs with a high debt economy?"

I DON'T.

Your question relies on the false assumption that a high debt economy destroys jobs. But in fact it's almost the reverse: taking on debt means money is being spent, and most of that spending is wages. Far from destroying jobs, it creates them.

What destroys jobs (apart from cutting spending) is an uncompetitive business environment: where the roads and railways remain grossly inadequate, where electricity users pay artificially high charges to be connected to the grid (or worse still, can't get a reliable supply), and where the workforce doesn't have the skills that businesses require.

The idea that the debt itself deters business investment in a state is a myth that caused tremendous economic damage in South Australia under the Brown and Olsen governments, which is why Croweaters distrust the Liberals so much.

A broad based land tax would actually make housing more affordable, as the speculative component of property value would be less.

And even where people are less wealthy on paper, their standard of living would be higher. Particularly if it replaces other taxes.

___________________________________________________________________________________

toleo, taxing away 100% of land value is a very bad idea. Firstly it would be unfair on those who already have land. Secondly, even taxing away 100% of the increase of land value is economically and socially undesirable, as it means there would be strong opposition to anything that increases the local land value. Thirdly it would destroy the economic benefits of property ownership, and we could end up with something like the situation in Moscow, where there've been hundreds of arson attacks on buildings by those who want the land.

Aidan

"the GST is not a wealth tax"

Why not? Isn't money wealth?

"How much of every article do you think should be devoted to definitions?"
As much as is necessary to determine whether the author makes logical sense in his own terms, or is just engaging in a fit of arbitrary self-contradictory moralising.

For example, can you see that if someone asserts that x provides a net benefit, and then in the same thread says that the costs of providing the benefit are irrelevant, that person is operating at the intellectual level of a gibbering idiot?

Can you see that, if someone says that the purpose of a compulsory acquisition of property is "fairness", but then is totally at a loss to give any objective criterion by which they know whether it's fair or not, that doesn't make sense?

Can you see that, or not?

How can they say something is fair, when they themselves don't have any coherent idea whether it is or not, and disagree with their own opinion by contradicting themselves when confronted and challenged to explain themselves?

"But if you like, I'll have a go at defining the appropriate rate of land tax"

Why is that appropriate? Because what? Are other people's equally arbitrary definitions equally appropriate? If not, why not?

"As for your complaint that it doesn't define the State, perhaps that's because it doesn't actually mention "the State""

Tax is a compulsory exaction by the State, remember? That's why you want it, remember?

The point is, the State requires the payment of tax so it can spend it on whatever it decides to spend it on. In order to justify it *in your own terms* (let alone anyone else's), you need to be able to demonstrate that the benefits it confers are greater than the detriments it imposes.

You haven't done that, so you haven't justified any rate of taxation as appropriate.

Foleo
“Jardine, please define 'define'.”
How about “state or set forth the meaning”, “specify distinctly”, “determine or fix the boundaries of extent of”?
http://dictionary.reference.com/browse/define

I’m not just asking for definitions for the sake of it, as you seem to believe. I’m doing it because I know, and will show, that if the author does define what I have asked for, we will see that he is involved in a hopeless jumble of self-contradictions and circularities.

“The other definitions you seem to think are necessary are mostly in the Reports referred to. Read the Treasury paper.”
Ho hum, appeal to absent authority, more immediate logical fallacies as the stock-standard fall-back of the statists when challenged.
I am not going to be sent on an errand to construct the author’s argument for him. It is enough for me to point out that it doesn’t make sense, that he can’t defend it because he provides no rational or objective criterion by which his own argument could be verified or falsified. It’s flummery.
“ That might help you understand efficiency, and net benefit.”
Ho hum, assuming what is in issue. Do try to keep up with intellectual developments of 2,500 years ago. Let me put it this way, foleo. Have you got an argument that is *not* a logical fallacy? You need to prove the concepts of efficiency and net benefit, not just flaccidly and impotently *assume* them.
“Do you really need the State defined, or the public interest.”
Yes, because his definition of the state will show that he’s contradicting himself. And since the author is not “the public”, the public interest is not his to know.

In short, he’s talking nonsense, and your failure to distinctly specify the ideas you are dealing in, has caused you too to join his swim in the flummery.

Jardine,

Since when did summarising the conclusions of papers linked to become an appeal to absent authority?

"Why not? Isn't money wealth?"
No. It's primarily a means of exchange. It can also be used as a means of storing wealth, but that's not what the GST taxes.

"How can they say something is fair, when they themselves don't have any coherent idea whether it is or not, and disagree with their own opinion by contradicting themselves when confronted and challenged to explain themselves?"
The real question isn't how they can say it, but how they can convince others of it.

"Why is that appropriate? Because what?"
Because of its effects:
More than 1% of unimproved land value: to make it a significant source of revenue.
Less than 5% of unimproved land value: to ensure that the landowners still have a significant stake in the value of their land.
Not rising more than 0.1% of unimproved property value per year: to avoid unfairly disadvantaging existing landowners;
(except when combined with measures such as abolition of GST): because a big drop in other taxes is likely to push property values up if not accompanied by a rise in land tax.

"Are other people's equally arbitrary definitions equally appropriate? If not, why not?"
As I haven't yet seen their definitions, I can't tell you. The appropriateness or otherwise ultimately depends on the effects. As we can't always predict all the effects in advance, we have to take the reasons into account. And they must be carefully examined - taking them at face value isn't enough.

"Tax is a compulsory exaction by the State, remember? That's why you want it, remember? "
Are you clear about what you mean by "the State"? If so, why do you require someone else to supply a definition? Did Karl Fitzgerald write anything that seems to contradict yours?

(TBC)

"The point is, the State requires the payment of tax so it can spend it on whatever it decides to spend it on. In order to justify it *in your own terms* (let alone anyone else's), you need to be able to demonstrate that the benefits it confers are greater than the detriments it imposes."
It gets rather tedious going back to first principles all the time, and I think this site would be far too boring for me to participate in if all the articles did that.

States exist. Even if government at State level in Australia were abolished, entities that require the payment of tax would take over their responsibility. They require taxes to fund their spending*. Some taxes are more economically damaging than others, so it makes sense to compare the effects of different taxes at different rates, and select the least damaging combination.

* It could be argued that those states which print their own money don't require taxation to fund their spending. However they still require taxation to give their money value. The Weimar Republic demonstrated what happens when a financially sovereign state doesn't have an effective taxation system.

Aidan

> "Why not? Isn't money wealth?"
>>No.

'Nuff said. You're making a complete fool of yourself.

You’re not understanding the economic issue, which I explain for your benefit below.

>"Why is that appropriate?
>> "because of its effects" … “significant”.

All you've done is replaced the word "appropriate” with "significant". You obviously don’t understand the question.

"The real question isn't how they can say it, but how they can convince others of it."

But it's not a consensual transaction, remember? Tax by definition is a compulsory exaction. You're displaying complete confusion.

The *fact* that states exist, does not of itself give the *value* of the fair rate of tax, which you have completely failed to establish, justify or explain.

Foleo

“And what a grand idea you post in jest. If we tax the value of land 100%, land would have no price”

Thank you for turning your brain on.

So we have now established by agreement that
EITHER:
1. The proposition that land tax benefits the economy is wrong,
OR
2. There is a point at which it goes from being beneficial to being detrimental.

Your mission - should you choose to accept it - is to define that point by some objective criterion.

Both you and Aidan have obviously failed to understand the economics of what you're talking about.

To be non-gibberish, you need to provide some coherent *reason or ratio* that *applies equally to evaluating the benefit if the money were left untaxed*. Otherwise you can’t establish it’s more socially beneficial than not-tax.

I say you can’t do it. But if you can, go ahead.

All
What we have just seen here, yet again, is that all discussion of the appropriate or fair rate of tax fails because no-one, when challenged, can give any non-equivocal definition of the appropriate or fair rate of tax, *that they equally apply to evaluate the benefits of the same money untaxed*. So there is no way of knowing – by their own lights – whether it provides the net benefits that they claim for it.

Complete fail.

Jardine,
I'm not the one making a fool of myself YOU fail to comprehend the difference between money and wealth. It's you who does not understand the economic issue.

"All you've done is replaced the word 'appropriate' with 'significant'. You obviously don’t understand the question."
Obviously, because I thought that when you said "Why is that appropriate? Because what?", I thought you were after a brief explanation of my reasoning. I hadn't realised that you were motivated by a hatred of subjective measures so strong that you ignore all reasoning that contains them.

"But it's not a consensual transaction, remember? Tax by definition is a compulsory exaction. You're displaying complete confusion."
But in many countries, including this one, tax rates are set by democratically elected governments.

You fail to comprehend that the point at which taxation goes from being beneficial to being detrimental depends on many thousands of variables. Nobody has ever derived an adequate formula for setting all tax rates - and as many of the variables are the result of cultural factors, t's unlikely anyone ever will. The best we can do is to react to events and try to improve what we can.

But one thing we do know for sure is that some taxes are more damaging than others. And land tax has one of the lowest adverse economic effects of any tax. See http://en.wikipedia.org/wiki/Law_of_rent

So regardless of whether our total tax rate rises, falls or stays the same, more land tax is desirable. But there are still potential adverse consequences. You can argue if you like about what rate it would need to be at for the effects of those adverse consequences to become significant. Criticising me for daring to mention that they can become significant makes you look like a stupid ideologue uninterested in the real world consequences of taxation policy. But if that's your true position then keep rabbiting on!

The author's article necessarily assumes the concept of the appropriate or fair rate of tax. It is implicit in expressions such as "fiscal imbalance" and "the health of the public revenue raising systems".

The unspoken assumption is that tax intrinsically, automatically, necessarily confers a net benefit in the public interest, greater than would obtain from not-taxing the same money.

However this assumption is contradicted by the statement, which no-one disagrees with, that 100% tax rate would be detrimental to society.

But the problem doesn't just kick in at 100%. It inheres in every step all the way down.

As we have just seen, no-one is able to defend the concept of an appropriate or fair tax without relying on such nonsense as:
1. "money is not wealth". No attempt at justification or explanation is given for this absurd proposition.
(The fact that money *is* a medium of exchange, doesn’t mean it’s *not* wealth.)
Besides if true, it would apply to all tax, not just GST, since all tax is paid in money.
(Note to Aidan: we stopped paying tax in mead, bridgework and deerhedge a thousand years ao.)

2. The appropriate rate of tax depends on the taxpayer’s agreement.
This is just flatly incorrect.
*All* branches of government define tax as a compulsory payment.
So if you want to argue that it’s a voluntary donation, you need to take it up with them, not me. You’re arguing with the wrong person.

3. Or how about the nonsense that it’s not an appeal to absent authority, to answer *my* challenge to *you*, by telling me to consult the authority of absent economists (who JUST HAPPEN to be government dependent intellectual bodyguards?)

These arguments put up in defence of the concept of the appropriate or fair rate of tax are nothing short of pathetic. Not even the government or you believe them.

Nor is the problem that I have a “hatred” of subjective values. I never said that, and don’t believe it, so it’s a misrepresentation.

After all, all values are ultimately subjective. For example, even objective values over which we apparently have no control , such as the spot price for gold, derive ultimately from the subjective values of all the people in the world on a given day who buy and sell, or abstain from buying and selling gold.

But that doesn’t mean there’s no objective criterion for demonstrating the value of gold, does it? No.

Therefore the problem is not the existence of subjective values per se. The problem is specifically that you all remain completely unable to know or determine the appropriate or fair rate of tax.

You are caught between your mid-brain, herd-bound, unthinking assumption that tax is intrinsically, automatically beneficial, and your cerebral knowledge and understanding that that statement is not true.

Notice the curious coincidence that, on examination, the premises for the concept of the appropriate or fair rate of tax , all turn out to be just a hopeless jumble of nonsense and self-contradictions, and on the other hand we JUST HAPPEN to be discussing the revenue source of the State?

And in what other field of human endeavour, would anyone dare to assert that an expenditure confers a net benefit, regardless what it was spent on, or what was sacrificed to obtain it?

Aidan in another thread even descended to the absurdity of asserting that government provides net benefit REGARDLESS OF THE COST LOL! Real comic-book stuff. “Net” means net of costs you fool.

Aidan, your last post admits that you are not capable of knowing or demonstrating the appropriate or fair rate of tax, other than by your methodology of pulling an arbitrary figure out of one's backside and expecting everyone else to hail it as strawberry jam.

It is enough for me to prove that what you’re saying is wrong, and that not even you agree with it.

If after that, you choose to keep believing and saying what you know is untrue, I think that’s your problem not mine.

All
Therefore I have demonstrated that no-one is capable of knowing or establishing the appropriate or fair rate of tax, and no-one has been able to defend it but by embracing absurdity and self-contradiction.

Q.E.D.

Wow, Jardine, you have been very busy building strawmen!

Tax is, as I said, necessary to fund government spending. The alternative is anarchy (or at best, tribalism).

"The unspoken assumption is that tax intrinsically, automatically, necessarily confers a net benefit in the public interest, greater than would obtain from not-taxing the same money. However this assumption is contradicted by the statement, which no-one disagrees with, that 100% tax rate would be detrimental to society. "
But since nobody disagrees with that statement, maybe you should rethink the unspoken assumption. Rather than assuming it to be automatic and necessary, why not acknowledge that it was not assumed to apply in all conceivable circumstances; merely circumstances to what we have at present.

"But the problem doesn't just kick in at 100%. It inheres in every step all the way down."
But not proportionately. And for a 1% land tax, the ongoing problems are negligible.

Regarding my disagreement to your "money is wealth" claim, I IMMEDIATELY offered an explanation: It can also be used as a means of storing wealth, but that's not what the GST taxes.

The GST taxes spending. Spending is not wealth. Spending could be on credit.

"Besides if true, it would apply to all tax, not just GST, since all tax is paid in money."
I was merely using GST as an example; not claiming it to be the only exception.

"2. The appropriate rate of tax depends on the taxpayer’s agreement.
This is just flatly incorrect. "
Nor is it what I said. I said that in democracies it depends on the collective agreement of the voters.

"3. Or how about the nonsense that it’s not an appeal to absent authority, to answer *my* challenge to *you*, by telling me to consult the authority of absent economists (who JUST HAPPEN to be government dependent intellectual bodyguards?)"
Firstly it was foleo, not me, who told you that. Secondly as you were whinging about the lack of definitions in the article when it included links to a paper that contained them, your "absent authority" excuse is invalid IMO.

(TBC)

"But that doesn’t mean there’s no objective criterion for demonstrating the value of gold, does it? No. "
Demonstrating or determining? Demonstrating that things have value is usually much easier than determining how much they're worth. And though markets can easily determine the spot prices of gold and other commodities, predicting next year's value's much harder.

"The problem is specifically that you all remain completely unable to know or determine the appropriate or fair rate of tax."
Reality can certainly be a problem for some people. But you don't have to shut your eyes and pretend that you do know. Instead you can do what the rest of us do: compare potential alternatives. Because although you will never know what the optimum outcome is, it is not difficult to get some idea of which options are better than others.

I don't have a "mid-brain, herd-bound, unthinking assumption that tax is intrinsically, automatically beneficial". Some taxes (such as the GST) I think should be abolished. I do think the overall tax take should be raised from its current level; that's not because of any intrinsic factor but because I think better services would, at the moment, give greater overall benefits than lower taxes (the benefits of which have been greatly overstated in the past thirty years). Lower taxes bring some benefits, but they're a low priority compared to other alternatives that will bring much greater benefits.

I strongly suspect you're caught between your mid-brain, herd-bound, unthinking assumption that tax is intrinsically, automatically harmful, and your cerebral knowledge and understanding that that statement is not true. But you seem to convince yourself to go with your mid-brain, and assume everyone else is unable to resolve the apparent contradictions that you can't.

"And in what other field of human endeavour, would anyone dare to assert that an expenditure confers a net benefit, regardless what it was spent on,..?"
It's only cyclical deficit spending (which doesn't rely on prior tax revenue) that confers a net benefit regardless what it was spent on. And even there the more efficient the spending, the greater the revenue.

Jardine (continued)

"Aidan in another thread even descended to the absurdity of asserting that government provides net benefit REGARDLESS OF THE COST LOL! Real comic-book stuff. “Net” means net of costs you fool."
So if you ceased flinging insults long enough to think, you'd be able to conclude that this means the benefit always outweighs the cost.

Which thread was it BTW?

"Aidan, your last post admits that you are not capable of knowing or demonstrating the appropriate or fair rate of tax, other than by your methodology of pulling an arbitrary figure out of one's backside and expecting everyone else to hail it as strawberry jam."
To someone with better comprehension than you have, it would demonstrate that although I (like every other person on this planet) am unable to give a definitive figure of what the optimum tax rates should be, I am able to explain why I think land tax rates should be in the range that I think they should be in.

Unlike your claims, they're neither sourced from anyone's backside nor expected by their maker to be hailed as strawberry jam by everyone else. If anyone disagrees with my reasoning or thinks another level would be more appropriate then they're welcome to say so. But obsessing over the arbitrary nature of the boundary of the range I supplied, while failing to propose an improvement, is a pointless exercise IMO.

"It is enough for me to prove that what you’re saying is wrong, and that not even you agree with it."
The only thing your flawed proof demonstrates is the stupidity of your own arguments. Your understanding of my position is so poor that you're not qualified to determine what I agree with. Although you could always ask me...

Aidan

Look the question is perfectly simple. How do you know, at any given point, whether a tax is beneficial or detrimental, even in your own terms?

A simple "I don't know" will suffice.

Aidan

"Secondly as you were whinging about the lack of definitions in the article when it included links to a paper that contained them, your "absent authority" excuse is invalid IMO."

Fine.

Here's the complete disproof of all your argument, and to your own standards:
https://mises.org/sites/default/files/Man,%20Economy,%20and%20State,%20with%20Power%20and%20Market_2.pdf

QED

All
What we have just established here is that there is no such thing as an appropriate or fair rate of tax. Putting aside the statists’ fabulous but false assumptions in favour of open-ended state power, it's like asking, what's the appropriate of demanding money with menaces? What's the appropriate or fair rate of rape?

Owing to the compulsory indoctrination of the entire population during their formative years, it is easy to *assume* that there must be an appropriate or fair rate of tax. That's what the author and his supporters, have done. And that's all they've done.

Notice how they just entered the discussion having already assumed that it exists, and there is no need to explain why? At no stage did they question this assumption.

And when I questioned it, the first thing they did is try to shut down the discussion.

But when we step around their baffles and evasions, and when we actually unpackage the concept of an appropriate and fair rate of tax, just look at the grade of the arguments they are immediately forced to fall back on:

1. Tax is a voluntary donation; there is no initiation of aggression involved. The problem is, not even the government agrees with this. It's complete fiction.

2. Anything the government spends it on is intrinsically beneficial. The problem is, not even the apologists agree with this assumption.

3. Being "democratically" derived, tax, and anything the government feels like spending it on, is automatically, intrinsically justified. The problem is, not even the apologists agree with this; else they could make no criticism of government.

4. The fact of the existence of States, intrinsically and automatically proves the appropriate and fair rate of tax. Again, just illogical bullsh!t.

When we ask them what are the legitimate limits of government power?; how they know what government should or not should not be doing?; they fall silent and run away.

But how can the right rate of tax be determined without answering this prior question of what they are taxing *for*?

At no stage do they offer any reason for their belief that a "democratic" process would provide goods and services that satisfy the more urgent wants and needs of the populace, then would obtain otherwise, subject to the non-aggression principle; or *how* they would know.

And if they could and did, then obviously there would be no justification for the rule of law, since why should government power be restrained, if it just presumptively knows better in anything and everything?

And they never have any theory of the State that takes account of the *value* of the coercive means they advocate, in the question how market or government services satisfy the final ends they are supposed to satisfy. They advocate political means to economic ends, but without any theory to connect the political means to the economic ends they seek to achieve, compared to the alternative. A completely defective and illogical thought process.

The result is, they can't defend their belief system; and the reason is, because it's wrong.

What is called for, is not shooting the messenger. It's to *re-think* the assumptions you were brainwashed with during your compulsory indoctrination at the hands of government.

In the final analysis, the belief in an appropriate or fair rate of tax is just a belief that a coercion-based monopoly corporation of aggressive violence and threats, fraud and corruption, make a better basis for the good society than liberty and property subject to the non-aggression principle.

Even Aidan's squarking about "anarchy":
1. doesn't answer in that case, why shouldn't government choose our friends and foods and sexual partners, which currently are chosen in a state of "anarchy"?
2. must admit that any government intervention more than is necessary to stop anarchy, is not justified, even in his own terms.

In seeking a justification for the appropriate or fair rate of tax, the statists don't have a leg to stand on.

Jardine,
"Look the question is perfectly simple. How do you know, at any given point, whether a tax is beneficial or detrimental, even in your own terms?"
By comparing the effects of having and not having the tax. Which can be very complicated, especially if the comparison is detailed enough to include the effects of raising/cutting/abolishing other taxes to reach the equivalent revenue position. I know it's not what you want to hear, but simple questions often have complicated answers.

Secondly, nothing at mises.org proves anything non-trivial to my own standards. The entire Austrian School is based upon false assumptions and non sequiters in order to promote policies that favour the already rich over everyone else. But despite this I did have a look at what the page you linked to said about land value taxes... and found a stupid rant about how the landowner provides such a valuable service allocating its use. It doesn't seem to have occurred to the author that taxing the value of the land would not deter the owner from performing that service. And amazingly (considering his adoration of free markets) nor did it occur to him that the market itself could fulfil that function.

Anyway there's a big difference between referring someone to a site that you claim will answer their questions and linking to a site you summarise the conclusions of before anyone even starts asking questions. And when it turned out you weren't really interested in the answers anyway, your allegation of appeal to absent authority lost any remaining credibility.

The appropriateness or fairness of a tax depends on the context. But some taxation is always needed to give a currency value. Unlike rape, where the appropriate rate is zero and the state should never commit it under any circumstances (although the appropriate rate may be unachievable because cost and other competing rights limit the state's ability to prevent it).
(TBC)

Jardine (continued),
If you barged into a discussion on radio spectrum allocation with a purely ideologically driven claim that none should be allocated to anything, everyone else would quite rightly want to shut you down. Very few want to waste time on tedious arguments to try to convince you of something most of the population already accept. The same is true with taxation.

And when people do engage with you, you nearly always misrepresent their arguments. For example your strawman that "Anything the government spends it on is intrinsically beneficial" when the real argument is that governments can and do spend money on beneficial things, and would be able to spend more money on beneficial things if tax were higher.

Similarly you miss the point about democracy. In our current situation it's what's democratically electable, rather than what's economically advantageous, which sets the upper limit for our taxation.

And the strawman "The fact of the existence of States, intrinsically and automatically proves the appropriate and fair rate of tax" is perhaps the silliest of all. What it proves is that some taxation is necessary; it doesn't say anything about what the rate should be.

The limits of government power are set by the constitution and by democracy. Do you have a problem with that?

"But how can the right rate of tax be determined without answering this prior question of what they are taxing *for*?"
FINALLY A SENSIBLE QUESTION!

In terms of the overall tax burden, it can't. However even if we don't know what they are taxing for, we can still determine the relative merits of one tax over another. Which is were we were before you came in.
(TBC)

Jardine (continued),
"At no stage do they offer any reason for their belief that a "democratic" process would provide goods and services that satisfy the more urgent wants and needs of the populace, "
The democratic process is just to keep the states accountable to the people. But there are several reasons why state involvement can lead to better results. Including:
• Individuals' financial situation often means they can't afford the goods and services that satisfy their urgent needs, let alone their wants.
• Many individuals don't have a good enough credit rating to make long term investments.
• States can do what individuals are unable to do, even when it's insufficiently profitable for corporations.
• Often there are risks at an individual level that don't exist at the population level.
• There are some investments that make sense at the economic level, but not at the financial level because passing on the costs to the users would deter them from using it. Governments, because of their taxation ability, gain from that even when the private sector can't.

"And if they could and did, then obviously there would be no justification for the rule of law, since why should government power be restrained, if it just presumptively knows better in anything and everything?"
The presumption is entirely on your part. I'm well aware that not only is their knowledge imperfect but so is their implementation ability. And a third justification is that without the rule of law, corruption flourishes (as you'd see if you looked at China).

"And they never have any theory of the State that takes account of the *value* of the coercive means they advocate, in the question how market or government services satisfy the final ends they are supposed to satisfy. They advocate political means to economic ends, but without any theory to connect the political means to the economic ends they seek to achieve, compared to the alternative. A completely defective and illogical thought process."
Far more logical than your tactic of basing every opinion on the absurd conclusions of your fundamentally flawed theory.

(TBC)

Jardine (continued)

Most people acknowledge that economic theory, when based on facts, can be very useful but it doesn't explain everything. But a few such as yourself ignore the facts because you think your theory explains everything.

It's better for a theory to be incomplete than completely wrong.

In the final analysis, there are many things that are much much much much much more desirable than lack of taxation. Prosperity depends far more on having a highly skilled workforce, good infrastructure and low interest rates than it does on the tax burden being low.

"Even Aidan's squarking about 'anarchy':
1. doesn't answer in that case, why shouldn't government choose our friends and foods and sexual partners, which currently are chosen in a state of 'anarchy'?"
Anarchy and freedom are not the same thing. Living in fear of more powerful people tends to be far worse than being under government rule; the latter usually has some rules which limit its power.

Food safety regulations mean our foods aren't chosen in a state of anarchy at all. Likewise with sexual partners (e.g. we have age of consent laws).

"2. must admit that any government intervention more than is necessary to stop anarchy, is not justified, even in his own terms."
I admit no such thing!

I know life would be so much simpler if those whose arguments you're too brainwashed to comprehend could only believe the things you thought they could. But my comments about anarchy were in response to your question of "why have taxes at all". There is no logical reason for me to agree with any of your highly illogical claims.

Aidan

So in other words, you don't know whether or not a tax is beneficial or detrimental at a given point. It depends on a whole lot of variables, contingencies, and unknowns - which themselves go to subjective values - which you don't and cannot know.

"The entire Austrian school is upon false assumptions and non sequiters [sic] in order to promote policies that favour the rich over everyone else."

It's just that you can't identify any?

"It doesn't seem to have occurred to the author that taxing the value of the land would not deter the owner from performing the service."

But you yourself admit that it would so deter him if the rate were 100%. Therefore you admit that whether your statement is true depends on the tax rate.

And we have already established that you don't know whether or not the tax rate would have a beneficial or detrimental effect at any given rate, because the best you can do is say "it depends on the effects".

So you're arguing that the effect depends on the effects. In other words, you cannot defend land tax as conferring a benefit on the economy, because according to you, the effects go to squillions of unknowable, constantly changing, subjective values. You're proving my case for me.

"But some taxation is always needed to give a currency value."

Why? That's like saying bank robbery is always needed to give a currency value.

You keep trying to ignore that taxation is a compulsory exaction, not a voluntary donation. It's nonsense. Not even the government agrees with you.

Obviously if the people wanted it, then taxation would not be necessary. People would just send in a cheque to Consolidated Revenue for as much as they think the government deserves, and its revenue would be no less. It's complete nonsense.

It is not a straw man to say that you argue that the existence of states demonstrates the existence of an appropriate or fair rate of tax.

My copy function on this puter doesn't work, but your quote above starting "States exist. .... Least damaging combination." proves it.

The issue is WHETHER an appropriate or fair rate of tax exists. You argue from the factual premise THAT states exist and need taxes to fund their spending, to saying that some taxes are more damaging than others, to saying there is a need to establish the least damaging tax. At no stage do you establish
a) that an appropriate or fair rate of tax exists, or
b) what it is, or
c) how you know.

You simply assume it exists, and that the question is how to minimise the damage caused by taxation. Which only begs the question.

So it's not a straw man to say that you argue from the factual premise that states exist, to the value conclusion that an appropriate or fair rate of tax exists. That's exactly that you did.

The limits of government power are set by the constitution and democracy. Do you have any problem with that?"

Yes. If the people are not competent to know what goods or services they should purchase, how can they be competent to elect persons to decide for them, especially when those representatives are not bound by the law against misleading and deceptive conduct? If the people vote for an abuse or oppression of a minority, do you have any problem with that? And the limits of a legal monopoly of force and fraud, are to be decided by agents of that same monopoly.

And finally, you need to prove that that process would be more representative of the people, than the people are of themselves by their own voluntary and peaceable transactions.

You have made no attempt to come to terms with the real economic or political issues.

"It's better for a theory to be incomplete than completely wrong."

You haven't established any reason why my theory is wrong, only that it doesn't agree with your opinion. You have not pointed out any self-contradiction or circularity or equivocation other logical error.

Whereas I have shown how
a) your central claim cannot be verified. You can't prove what the appropriate rate of tax is - "it depends" (on unknowables);
b) it is common ground that your central claim can be falsified because even you agree that tax may be damaging, inappropriate or unfair
c) you cannot determine the point at which it goes from being allegedly beneficial to admittedly detrimental
d) you keep contradicting yourself as I have repeatedly shown above
e) you keep equivocating, particularly in the definition of tax, constantly misrepresenting it as a voluntary donation, ignoring or denying its coercive nature
f) you have never explained how you know whether the taxed money would net benefit society, more or better than the same money untaxed
g) the fact of your mere opinion otherwise is not a proof
h) you have never explained why the political process is more representative of the people, than the people are of themselves
i) you have never explained why you should not fund voluntarily the income redistributions you want to force on others
j) you keep assuming that investment makes the poor poorer.

You have not been able to cite any tenet of Austrian theory, let alone one that is illogical or incorrect.

A pathetic primary school level of argument.

"I admit no such thing."

According to you, the reason why tax is necessary to fund government, is because otherwise there'd be "anarchy" and "tribalism". Therefore you have established no justification of any governmental action over above that level - even if your absurd hyperbole were accepted, which it ain't.

Therefore I have shown that no-one is able to defend the concept of an appropriate or fair rate of tax.

Aidan

So you enter the discussion having already assumed that there is an appropriate or fair rate of tax, even though you agree that it is definitely detrimental at some stage.

When asked how you determine when it's beneficial, you say from its "effects", even though you must admit that these run into hundreds of millions of evaluations that are subjective, contingent, constantly changing, and mostly unknown and unknowable.

My question is, when trying to figure out what the effects of a given rate of tax are, how do you hold all the other variables constant?

Also, where did you get the idea that you know better than everyone else what their thoughts, feelings, preferences and values should be?