Mark Wadsworth

• Comment on: Do not pass go

  Mark Wadsworth's comment | 27/01/2012 11:12 am

  Apologies, the first version of my comment ended up double its intended length...
  
  I am deeply puzzled by Jono's lengthy comments - either he misposted this and is responding to a completely different article, he completely misunderstood RObin's aritcle or he is deliberately misrepresenting it.
  
  Robin said: "The founding social organisations today are privatisation of the commons: virtually tax free private property in land. And socialisation of private property: taxation of wages, salaries and investment. Is this the right way around?"
  
  And then goes on to answer his question - no it isn't! - and suggests a good solution, or at least one worth considering: "We mean to fix this by restoring the land to the commons by collecting its community created value for public revenue instead of paying it to banks. We also propose to restore private property to the individual by abolishing tax on work and enterprise."
  
  So basically, Robin would like to stop taxing income from labour, enterprise or productive (industrial) capital etc.
  
  Jono then conflates "unearned income from land" with "income from investments" and veers on to the topic of inherited wealth. Robin made no distinction as to how land or investments were acquired, whether purchased or inherited or won in a lottery. The point is that
  
  Jono then ploughs straight in with this: "Can you also define what 'community created value' is? How are you going to restore the land to the commons? By the use of force? If that is your approach, there are many better alternatives."
  
  Robin explained that - by untaxing labour and enterprise and by taxing land values. Call that 'use of force' if you so will, but why does Jono think that taxing labour and enterprise is not 'use of force'? Does he not realise that the simple act of 'owning' land can only be achieved by use of force (albeit the owner relies on the state to register and protect his privileges)?
  
  Jono then compounds his errors by confusing "land rental income" (which is truly unearned as the article explains) with investment income. Robin never said that investment income counted as unearned, as income from productive capital would not be taxed under his system. Why Jono harps on about inherited wealth being unearned is unclear to me - it must be quite clear that under Robin's system, inherited investment income from non-land assets would be untaxed and inherited land rental income would be taxed.
  
  Jono then further displays his confusion/ignorance: "This 'community created value' idea seems to be a veiled companion to Marxist argument - that capitalists/industrialists/landowners can make money without working. "
  
  Again, the article makes it perfectly clear that capitalits/industrialist on the one hand would be untaxed and landowners would be taxed. The whole "without working" thing is irrelevant, whether Marxists make this distinction or not is completely irrelevant as well.
  
  More possibly deliberate misunderstandings or complete lack of grasp of free market economics follows: "As a result those non-productive persons should be made to compensate workers, as those workers have not been fully compensated for their work. "
  
  Robin made no mention of how the income and profits of productive enterprises should be split between founder, investors, workers and so on, that is best left to the (free) markets. Clearly it is impossible to force an employer to pay his workers more than they are worth in the same way we cannot force customers to pay more for goods and services than they are worth.
  
  All Robin said was that the "Location, location, location" value of land, which is of course entirely community created (parks, good schools, good job opportunities, near the station, low crime area etc - or lack thereof) should be collected (via the tax system) and spent on things which benefit the community even more (and that includes of course, welfare payments to the disabled and others who are unable to work such as pensioners), such as, er, parks, schools, police etc, and all those things which make it easier for business to do business (such as cutting their taxes!).

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