Having today decided that the world has gone mad anyway, I thought I'd wish a Happy Second Blogday one of the most heroic - pointless, but heroic - 'blog projects of all time, Jackart's Fisking The Bible.
A project which he abandoned a while later, it appears.
Regular readers may remember that a week-and-a-bit ago, they ran the actual statistics through the Righteous Random Number Generator and reckoned that there were - an amazingly precise - 2,882 alcohol-related deaths in Scotland in 2003, or about 5% of all deaths.
This week, the RRNG applied a different multiple, and the number of UK-wide alcohol-related deaths is now given as - again, amazingly precisely - as 7,341 in 2008, which is about 1.5% of the 509,090 registered deaths in the UK in 2008.
OK, maybe the rate in Scotland is slightly higher than in the UK in general, but it's hardly going to be five times as much*, is it?
* If you deduct Scottish deaths from all deaths and Scottish alcohol-related deaths from all alcohol-related deaths, for the rest of the UK slightly fewer than one per cent of all deaths would be alcohol-related.
Patrick again, here:
Can you answer my basic ideological disagreement, Mark? Or are all your "killer arguments" merely appeals to "the common good", which no libertarian* would ever recognise as valid?
I am against subsidies, full stop, that is my starting point, and I would like to think that Patrick is too.
Overt subsidies, e.g. for car manufacturers/importers, or wind-turbines or all the other nonsense cost money and lead to misallocation of resources, and although these subsidies ostensibly "save" or even "create" jobs, for every 1 job saved or created, on average 1.5 jobs are destroyed somewhere else, it is just that it is very difficult to say which incremental extra 0.5 of a person is unemployed as a result.
So subsidies harm "the common good" and I am against them.
Now, unless you live under a stone, you may have noticed that housing is actually heavily subsidised. There is the non-monetary subsidy that land use is strictly controlled, hence supply is kept at well below any sort of optimum level, hence prices are kept at well above their optimum level, which is a covert subsidy to property owners (which I covered here).
Then there is the overt subsidy that the UK government is currently depressing interest rates to way below market rates, which transfers wealth from savers to reckless borrowers and further inflates property prices.
And finally of course, thre is the fact that council tax on pays for a small fraction of the cost of "local services" (about a quarter) and an even smaller fraction of the value thereof; the rest is paid by taxes on people in the productive economy (some of whom are also property owners, of course, so for many households, it nets off).
But these taxes on wealth-creation or true investment have massive deadweight costs; they are inimical to "the common good", they make us all poorer, tenants and property owners alike, that is the main reason that I am against them (the "moral" argument that people should not be taxed on their own efforts is also valid, but secondary) unlike taxes on land values which have negligible or even negative deadweight costs, so do not damage "the common good".
Seeing as the core functions of the state have to be paid for somehow, why not choose the tax that does the least damage to "the common good"?
Now of course Patrick will say that he's against income tax as well (but he's not against sales tax, funnily enough, which are just income taxes by stealth).
Fine, that's another point of agreement.
But what would happen to property prices if we scrapped income tax? Under Ricardo's Law Of Rent, rents and prices would merely increase by the amount of the income tax cut (compare rents and prices in a low-tax country like Monaco with rents and prices across the border in France!), so scrapping income tax would, taken in isolation, be a massive one-off transfer of wealth from future generations (who have to pay off much higher mortgages for ever more) to anybody who happened to own property at the time of the change.
Sure, we would be, collectively, better off being exploited by property owners (through higher rents and prices) than being exploited by the government (through income tax) but the gains to future generations are not that significant; we would be merely getting rid of "the state" in its narrow sense and returning to a feudal system where land-owners are, de facto, "the state".
While I was typing part 11, another nugget of economic logic comment popped up here.
As background, Patrick had earlier claimed that sales taxes were preferable to land value taxes as people "aren't forced to buy things", to which I replied "Wot? How many people can live without buying anything?"
Anonymous' comment was: "You can reduce the amount/quality of what you buy. It is possible (though no one wants to do it) to live off the land, not with LVT as you are forced to earn an income for the state. In LVT if someone makes improvements, you have to pay more tax, it is not your choice. You can as you said downsize, but then you are again forcing choices upon people, and forcing housing to be viewed as a bankable value instead of a home."
OK, let's keep things simple and compare LVT and sales tax (i.e. VAT) on a like for like basis. An average household pays/bears £3,000 VAT. This makes things they buy more expensive (and/or reduces their disposable incomes).
So VAT is also "forcing choices" upon each and every household. Instead of enjoying £20,000's worth of goods and services per annum, they can only enjoy £17,000's worth. Each household is forced to make the tough choice about which £3,000's worth of enjoyment they will forego; they are forced to "downsize" their consumption and hence "downsize" the income that producers can earn and hence "downsize" the productive economy generally (the deadweight costs, which make us all poorer); the producer and consumer between them "are forced to earn an income for the state" (to use his or her own words).
I already covered the topic of whether housing is a "bankable value or a home" in the previous post and have come down firmly on the side of it being a, er, home, rather unsurprisingly, for that is what a home is. It's a home.
I generally find that it is opponents of LVT who see housing as a "bankable value" rather than as a home, which is why they are so against a tax system that would keep values low and stable.
It's the gift that keeps on giving ...
Patrick, in the comments here: "You make great play of funding the built infrastructure, but why on earth should I be paying for it if I don't use it?@
Which I countered, I think not unreasonably, with this: "Why on earth should you be entitled to make a tax-free profit from selling a property that has gone up in value because somebody else has been forced to pay for the infrastructure?"
Anonymous then asked: "So you think housing should be treated as an investment, and not a home?@
From the context, I assume that he or she intended this as an argument against LVT, but to answer the question with a straight bat, I think that an owner-occupied property IS a home, i.e. private consumption expenditure, and NOT an investment (* to which, see footnote), and hence should be treated as such.
If you want to drive a nice new car, you have to pay the manufacturer for its value. If you want your kids to have a good education, you have to pay the school for the value of the education they get. And so on for all other forms of expenditure. So by analogy, if you want to live in a nice location, you ought to pay for the location value to whomever it is who creates the location value. So the question is, who creates the location value?
I accept that "the state" only directly provides some of the services that create location values (police, law and order, prisons to keep criminals off the street, fire brigade, road maintenance, refuse collection, i.e. the core functions of the state) and that a lot of the location value is created by purely private activities (shops, places of work) as well as things that are usually state-run but could just as well be provided privately (schools, hospitals, sports centres); but even this private wealth-creation depends to a large part on the framework set by the state (i.e. legal system, planning controls and so on).
In the absence of all this framework, location values would be more or less nothing (compare for example property values in the Gaza Strip with those in Israel). So whoever it was who creates the location value, it sure as heck wasn't one single individual property owner who sold you the house.
So, in the absence of an identifiable producer, what's wrong with individuals who want to enjoy privileged exclusive access to that collectively created value being asked to pay for that value to fund things that are of collective benefit? Rather than the current system where "the collective" (i.e. income tax and VAT payers) are forced to pay for things that are of purely private benefit (i.e. the infrastructure that boosts the value of Patric's property)?
* With a shift in taxation, however modest, from proper wealth creation (i.e. investment, in the narrower sense, of your own skills, labour and capital), the tax burden on proper investments, those things that make us all wealthier and make the economy grow, would come down and so the after-tax returns thereon would go up. Capital gains tax is straight out of the window, for example. Rising house prices coupled with a correspondingly higher debt burden do not make us wealthier, they merely creates the illusion of wealth, as we are now finding out - it's called "a recession", in case that point had escaped anybody.
From a much earlier thread, this:
Hmm, so with this Land Value Tax, what we're saying here is that we nationalise all the land in the UK, and charge people rent to stay on it, and if they can't pay that rent we evict them. That's libertarians who believe in private property doing that, is it?
Nope, wrong on all counts.
1. On a purely practical level, land usage in the UK is incredibly strictly regulated, in terms of planning permission for what you can and can't build, or what type of business you can carry on from which premises. But most property owners are quite happy with this state of affairs, because these restrictions artificially inflate the overall value of their properties.
Now, don't forget that artificial monopolies create losers as well as winners, and that the losses usually outweigh the gains. Those who lose out from this strict rationing are primarily those who have to pay artificially high rents or artificially high prices, as well as farmers with land to spare around urban areas (who can't sell) and the construction industry generally, i.e. a fairly amorphous group who do not make common cause and who are thus largely ignored.
So land-use restrictions privatise the gains (made by an easily identifiable group) while socialising (or "nationalising") the losses, i.e. spreading them out among a far wider group, in other words, it is a straight transfer of wealth, i.e. redistribution, but rather than being redistribution from rich to poor (for which I can see good arguments), it is a fairly random transfer of wealth from people who don't own property to people who do; or from people who buy at the peak of the market to those who sell at the peak of the market (i.e. me, if truth be told). Ho hum.
2. Taxing something is not the same as nationalising it. People seem to accept that they have to pay income tax on their earnings, which is an average marginal rate of at least forty per cent in the UK. Is that "nationalising labour"? No, of course not, it's "taxing incomes". I'd suggest that "nationalising labour" would be, instead of asking people to pay income tax, we would force people to work for the state for two or three days a week.
You don't need to be a genius to work out that taxing private incomes and then using the money to finance whatever it is that the state does is vastly preferable to forcing people to devote two or three days a week to tasks allocated by the state. Similarly, although the state has to own or control certain small areas of land, we are far better off if most land is privately-owned, because private owners are far more likely to put that land to its most efficient use. So the whole idea of land value taxation is that land is not nationalised.
3. Isn't land-ownership also the "privatisation" of publicly created value? Let's not harp on about the Enclosure Acts, which was privatisation of something that was hitherto publicly owned. Even if there were no state-enforced restrictions on land use, land/location values (in particular for urban land) are very much a function of what other people do (or don't do); if there are local shops, places of work, schools, parks, railway stations etc, then the value of the location is obviously much higher than somewhere stuck between a gasworks and sewage works at the edge of nowhere.
So when you rent or buy property, you are paying for convenient access to stuff that doesn't belong to the owner/vendor; it is only the convenient access, i.e. the state-protected monopoly position, that belongs to the owner (in the literal sense). Now, if the state has to raise taxes from something, is it not better to levy taxes on these publicly created values, because such a tax does not deter society in general from having shops, places of work, schools etc, as it is like rent (in fact it isn't "like rent", it is rent), unlike a tax on privately created values, in other words, income and capital generated by individual efforts, seeing as of how taxes on income and capital actively deter, discourage and hinder true wealth creation.
4. "...and charge people rent to stay on it, and if they can't pay that rent we evict them.". Yes, Land Value Tax is rent. Rents and taxes are in fact the same thing, it is just that rents are paid to private individuals and taxes are paid to the state; in either case, the rent or tax is only paid because the state enforces it.
Further, evicting people is one of the core functions of the state. Normal tenants pay rent to be able to occupy a property, and if they don't, they get evicted. Most tenants save up a deposit and buy a place with a mortgage. If they don't keep up with the mortgage payments, then the bank forecloses and the state evicts them. Sure, there is a balance between the 'property rights' of the property owner and the bank; in most cases, the bank has the upper hand (probably rightly in most cases, maybe not so in others) but in a dispute between bank and borrower, can either of them honestly day that they have created the land value? I doubt it, somehow - it's like two fleas arguing over who owns the dog.
5. "That's libertarians who believe in private property doing that, is it?"
The ultimate conclusion of all this is that the single-taxers aka Geo-Libertarians are right. The deal is, you pay less income tax (or even better none at all), and you just pay Land Value Tax (which of necessity would only ever raise half as much tax as currently burdens the UK economy, if even that) for exclusive access to (i.e. "ownership of") land, and in exchange the state protects your title to the land, pays for the roads, the police, refuse collection and so on (in the absence of which most land would be worthless, unless you had a private army to defend it, in which case you are de facto the state, and so on).
The faux-libertarians seldom refuse to commit to what they think the 'least bad' tax is, but when pressed, they usually mumble something about a low, flat income tax or a sales tax. I fail to see how taxing incomes or turnover is not depriving people of their own private property (the fruits of their skills, labour, capital investment etc).
How can anybody in his right mind claim that income or sales tax (which genuinely does deprive people of their own 'property') is somehow morally superior to Land Value Tax (which is more akin to a user charge)? In any event, "private property" is not a uniquely libertarian idea, it's fairly fundamental to most societies or cultures.
Answers on a postcard.
Fausty, among others no doubt, has linked to this short clip, which clearly appears to show that the host (David Dimbleby) of a programme on a state-controlled TV station interrupts opposition MP (Iain Duncan Smith) on the orders of a government Minister (Harriet Harman).
Being of a suspicious nature, I did wonder whether it was just clever editing by some cunning YouTube conspiracist, so I watched the full-length broadcast on the BBC's iPlayer, and that is, in fact, exactly what happened (fast forward to 14 minutes 14 seconds).
Being fair though, if you start a few seconds earlier (at about 14 minutes 0 seconds), David Dimbleby cuts off Harriet Harman in mid waffle to give Iain Duncan Smith a chance to speak, and Iain Duncan Smith does manage to finish off what he wanted to say, despite the best efforts of the host to shout him down.
From The BBC:
A multi-million pound project to reduce pregnancies among youngsters deemed at risk has been abandoned after research showed it was not cutting conceptions. The £5.9m Young People's Development Programme (YPDP) offered support and advice to disadvantaged teenagers in 27 parts of England between 2004 and 2007. But teenagers who took part were actually more likely to fall pregnant than those in comparable groups.
Well, duh, of course it wasn't going to work. There's no point having a welfare system that subsidises young/single motherhood to the tune of billions and then trying to stem the tide by wasting a few million quid in the other direction.
But just feel the panic here, from the inevitable fakecharity spokesman:
Simon Blake, national director of sexual health services provider Brook, said it would be wrong "to dismiss all youth development programmes as ineffective as a result of these findings - achieving positive success in reducing teenage pregnancy amongst disadvantaged young people is an important and ongoing responsibility. We must take the learning from this programme to inform future, rigorously evaluated work in the UK."
From the BBC, 8 May 2009:
UKIP, which campaigns for Britain's exit from the European Union, achieved a breakthrough in 2004, winning 16% of the vote and beating the Liberal Democrats into fourth place. It has performed less well in elections since then and has lost three of its 12 MEPs, including television celebrity Robert Kilroy-Silk, who left to form his own party.
Subtext: "UKIP down from twelve to nine MEPs"
From the BBC, 1 July 2009:
UKIP won 17.4% of the British vote and increased its number of MEPs to 13 in the June election - beating Labour into third place. UKIP had 12 seats in the former parliament.
Subtext: "UKIP only gained one MEP"
... but I can't help thinking that Paris Jackson bears absolutely bugger all resemblance to Wacko Jacko. She's got blue eyes FFS:
