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Tax Research needs to think more deeply

Richard Murphy of Tax Research, the think tank behind the Tax Justice Network, came up with this in response to a discusssion. And then closed the forum from further comments.

Whenever someone mentions tax and theft in the same phrase the response ‘anti-social libertarian’ (or worse) comes to mind. How about tax for redistribution? Or for repricing market failure? Or economic management? You dismiss all of those?

I would suggest that he needs to think more deeply. We do not argue that all taxation is theft. Far from it. We assert that the private appropriation of the rent of land is theft, since it is a value that belongs by right to the community and is the right and proper source of government revenue. Failur to collect this stream of wealth gives rise to the necessity for a second theft, as a matter of expediency: the taxation of the wages of labour – the product of his work. That is legalised robbery for it is taking what rightly belongs to the labourer. This is true even of the very high wages received by the rare football star. Many of us might think the amount received for kicking a ball around a field is absurd but it is nevertheless the reward for his labour. We fail to understand how anyone of either a left wing or a right wing persuasion can convince themselves otherwise.

Next, we come to redistribution. To argue that taxes are necessary for the redistribution of wealth is to beg the question why the wealth is maldistributed in the first place? We would suggest that the primary reason for this maldistribution is land enclosure and the private appropriation of the rent of land that has gone with it. This immediately creates two classes – those who receive rent, and those who must pay rent and work for wages.

Market failure can also be traced to the private appropriation of the rent of land, since it places the owner of land at a permanent advantage in relation to those who are not owners. They have no option but to accept whatever terms the land owner deigns to offer. The alternative is to live in the street and starve.

As for the use of taxation for the purposes of economic management – any tax other than one on the rental value of land can only affect the economy negatively. A tax on windows led to bricked-up windows. Taxes on beer and fags discourage smoking and drinking, which is arguably a desirable aim. But since the tax system is substantially levied when economic activity tax place, the only thing it can do is to discourage the production and exchange of goods and services.

We do not for a moment deny that taxation can be put to good uses which sustain and promote economic activity. Our case is that many of the means used for raising this revenue are indeed theft and can do nothing but harm.