[diggers350] Comments on Jock Coats

[Jock Coats]

On 31 Aug 2005, at 21:45, TLIO Chapter7 wrote:

> Georgists often  refer to capital as hard-earned — but most of it is
> inherited or comes as a return on investments, or is  funny money 
> earned on
> the stock market. Capital may well have been hard-earned by someone, 
> but not
> usually by the owner. Consequently,  I do not understand why high 
> capital
> investment returns or high incomes should not be taxed.

My position is that you should tax as little as possible.  That all tax 
is, by definition, an imposition.  I agree that there are huge 
disparities in capital property.  But I also believe that these 
fortunes can only be sustained under the current "double monopoly" 
system of land and money.

If you change that system, and if you start down the road of Land Value 
Tax you will at some point need to reform the way money is created as 
well to fill the hole, then the two supreme privileges that have 
allowed the concentration of wealth out of proportion to effort will be 
broken and that real redistribution does not need punitive taxation of 
economic activity - whether honest and hard earned by some or not.

And it also rather depends on how much tax you need to raise, and 
whether the chosen tax base supports all of that.  If it does - why tax 
anything other than land values if land values will fill the need.  
Besides, one of the selling points for LVT is that it is less easily 
avoided even by the super wealthy who currently support a £50bn a year 
tax avoidance industry and end up paying far less of their incomes than 
I do.  Sure - I guess you could be a multi-billionaire and live in a 
one roomed garrett in Lerwick, but what would be the point?

Overall, those who own a lot of capital will end up paying probably 
more than they do today to maintain the same standards of living in 
terms of the property/built environment they want around them.  And 
many, many at the other end of the scale (fully fifty percent of the 
population I guess in theory) would be taken out of taxation 
completely.

Churchill answered your question though:

" "If," he inquires, "you tax the unearned increment on land, why don't 
you tax the unearned increment from a large block of stock? I buy a 
piece of land; the value rises. I buy stocks; their value rises." But 
the operations are entirely dissimilar. In the first speculation the 
unearned increment derived from land arises from a wholly sterile 
process, from the mere withholding of a commodity which is needed by 
the community. In the second case, the investor in a block of shares 
does not withhold from the community what the community needs. The one 
operation is in restraint of trade and in conflict with the general 
interest, and the other is part of a natural and healthy process, by 
which the economic plant of the world is nourished and from year to 
year successfully and notably increased."

>
> I agree with Georgists that profits from rent (ie profits derived fom
> ownership rather than from working of land) should be returned to 
> society;
> but by the same token so should undue profits from ownership of stock 
> (ie
> profits which are out of proportion to the work performed).
>
> Cheers
> Simon
--
Jock Coats
At:
Corporate Information Systems, Computer Services,
AG17, Gipsy Lane Campus, Oxford Brookes University,
OX3 0BP
Work: +44 1865 483353
and at:
Wardens' Lodgings, Flat 1e, Block J Morrell Hall,
John Garne Way, OXFORD, OX3 0FF.
Home: +44 1865 485019 Mobile: +44 7769 695767
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