Amazing maze

The BBC ran a programme on taxation in is series The Moral Maze last week. How frustrating it was to listen to. The only coherent comments came from Richard Murphy, who did as well as anyone could given the absolute need not to even hint at LVT.

Had any of the speakers done so, or were known as an advocate of LVT, they would immediately be put on the list of people who could not be allowed to appear on the air. The BBC are well aware of people like Carol Wilcox and Dave Wetzel who could have demolished the Tea Party cant in a couple of sentences, so why they were not asked to appear?

Upsetting the tea party

The Tea Party argument has to be broken down by asking, first, what is government for? and second, where is the boundary between wealth that has been created by the actions of the community, primarily through the actions of the government, and the wealth that is the product of the individual’s labour?

The answer to the first question is that the government ensures secure occupation of land, by defence of the realm, the maintenance of civil order in the last resort, and the recognition of rights to land occupation through the granting and protection of land titles.

The second question leads to the issue of location value, a forbidden area in economics even though we all know all about it. The busker at Victoria will earn more than he will doing the same thing one stop away at Vauxhall. The difference is location value, usually referred to as rent. It arises because of the presence and activities of the community, in this case by creating the railway system. Once these two issues are brought into the discussion, the Tea Party case largely collapses.

What has to be conceded to the Tea Partygoers is that the PRESENT tax system has a large deadweight loss that shunts many people into an economic siding and then leaves the government with a massive welfare bill if they are not to live in abject poverty. The problem then boils down to the 1% who refuse to give up their privileges.