What is the Tax Justice Network up to?
It has been suggested that the various movements with an interest in LVT, including the Campaign, should work together with the Tax Justice Network (TJN). On the face of things, this is an excellent idea. TJN’s main concern is tax avoidance, and since LVT cannot be avoided or evaded, there is obvious scope for collaboration. Or so one would have thought. The brains behind TJN, John Christensen, were invited to sign our petition. And this was the reply.
“TJN supports part of this petition – that a charge on the unearned rental value of land is an effective form of taxation that should be pursued with significantly greater vigour. However, TJN does not support the position that a tax system should “replace” other forms of taxation.”
It is the same response as they have given before when the suggestion has been made for collaboration. I have written asking for further clarification:
“I am at a loss to understand why you and Richard cannot support our petition. The tax reforms we are proposing will achieve exactly what you are campaigning for. It is no different from telling someone who is overweight to avoid burgers, chips and Coca Cola. They have to give up that kind of stuff. All other taxes can be avoided and evaded.
“As you know, there has been some interest in working with and supporting TJN, which ought, in principle, to be mutually beneficial, but obviously we can not if TJN is committed to keeping all other
taxes. In practice, most LVT advocates would accept the need to keep “sin taxes”, but would like to see relief from taxes on work.
“If there is something we are missing, can you explain what it is?“
Response from TJN
My position, and that of most of my colleagues, is that LVT is an important part of a broadly based tax system which includes taxes on income, with appropriate reliefs, consumption (ditto) and financial transactions. Having a broadly based tax system allows governments to keep the rates on the different tax types reasonably low, preferably with minimal exemptions, whilst also providing a suite of mechanisms to use fiscal policy for a variety of purposes: raising revenue, redistribution, re-pricing (the sin taxes) and strengthening accountability to the populace.
The latter issue is hugely important. Tax is a key mechanism for engaging the electorate with the activities of their governments. If only land, in the broadest definition of that term, is taxed, a large proportion of the voting age population will have a huge interest in how money is spent, but little interest in how it is raised in the first instance. In my opinion, direct taxes provide the strongest link between politicians and the electorate they serve.
LVTC
So the argument is primarily about accountability. Of course I am too old to remember this, but I seem to recall reading that this was the original reason why income tax and NICS was extended to encompass most of the working population, as part of the post-war political settlement.
This is very interesting because as we approach election, the predominant mood (and don’t forget that I view the UK partly as an outsider) could be summed up in the phrase “a plague on all politics and politicians”. Now, whilst there are what roughly translate as “dissatisfaction parties” – the Swedish Democratic Party and the Pirate Party, on the whole there is still a reasonable level of confidence in mainstream Swedish politics. This may have something to do with our unrepresentative Westminster voting system, which would suggest at the very least that universal personal taxation has not even brought about the most basic reforms needed to make democracy function properly.
The difference may also have something to do with the difference in land ownership patterns in Sweden, where the great aristocratic estates were confiscated in the 1680s under a policy known as the Reductions. Here in Britain, despite a century of inheritance taxes, there has been little real change in the concentration of land ownership, and the political power that goes with it, that was the cause of the constitutional crisis of 1909. The post-war settlement did nothing to change in any fundamental way the entrenched maldistribution of wealth in Britain, which has reasserted itself with increasing virulence over the past 25 years. The main changes in land ownership that can be discerned since the end of World War 2 are that
- a substantial minority of households are outright owners of the land on which their homes stand
- the banks have a substantial interest in land as holders of collateral against loans
- there is been large growth in corporate land ownership
If one wanted to analyse this from a Marxist perspective, one would say that the socialist welfare state was nothing more than the minimum package of concessions from the owning classes, needed to avert communist revolution, and now that the threat is no more, society can safely be allowed to polarise.
Where, then, is the evidence for anything other than increasing alienation? Can you point to any substantial and objective academic research that demonstrates a consistent correlation of the kind that you suggest, whereby broadly-based tax systems have led to increased engagement in the political process?
As regards the other points you make, what of justice, and what of the practicality and the economic and social consequences of the taxes that go to make up the broadly based tax system that you advocate?