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Responsorium 14 January #1

Our economy is these days simply has very little land as a necessary input.

If land is not necessary these days, why are people willing to pay £100 per square foot rent for offices in London’s West End and £3 million an acre for industrial land in West London. Are they wasting their money? Do you know something the tenants and purchasers do not?

So, other taxes are needed, which ones do you propose? 

None, you have based your argument on a misconception.

— I was more commenting on needless grand words. One can signal one’s intellect to those who don’t know by using fancy words; one signals one’s intellect to those who know by saying difficult things in the simplest way.  What is your game? 

Which words are you complaining about? My syntax is simple. Sentences are mostly not more than about 15 words and I avoid using subordinate clauses. I always prefer to use the simpler word if there is one available, but the subject is a technical one, after all. I have not lived in the UK for many years and so do not get much opportunity to hear contemporary street English.

— My argument is not that there is no VAT fraud, but that in relative terms it has an inbuilt anti-fraud mechanism absent in many other taxes. Of course, it can go wron g, especially when there is no domestic seller/buyer to provide countervailing incentives. Hence VAT fraud often happens with internaitonal transactions….

VAT is made for fraud. The obvious one is payment in cash, or part payment in cash. The other loophole is registration and reclaiming input payments. An architect, for example, will buy things like cars, computers and cameras, which are legitimate business tools, but also have their private uses, and where is the line to be drawn? How many tradesmen have offered you a lower price for payment in cash. Are you one of those rare birds who insisted on paying the full amount? Or do you contribute to the 10% of VAT revenue which disappears in fraud?

Which economically and politically realistic taxes (non-land) do you think are less prone to fraud, and satisfy your canon? 

There aren’t any. That was the conclusion of both Smith and George. It is not ‘my’ canon. It is common-sense.

–As I argued, land as input has lost so much relevance in today’s production, it provides no solution. This might have worked in the economy 300 years ago, when the tax menu was sales or land taxes, but now we h ave think more…

Land has lost its relevance, but people are still willing to pay £3 million an acre for somewhere to put up a few industrial sheds. How do you work that out?