Clearly I'm not thinking straight. I would have thought if the government seriously intended to get the economy going and dampen the house price bubble, it would Increase Council Tax and cut VAT and National Insurance.
I'm happy to see that 45% of people who took part in last week's Fun Online Poll agreed with me, but 22% disagreed and the government decided to go with the minority on this one in last week's Budget - i.e. hike VAT, the Worst Tax Of All and 'freeze' (i.e. effectively cut) Council Tax.
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Anyways, inspired by something that Obnoxio posted: "I believe that if the false crutch of the state was removed, people would also benefit from a personal development of greater responsibility...", this week's Fun Online Poll is in two parts:
1. Who should pay for 'the state'? a) those who benefit most from its existence; or b) 'somebody else'?
2. Which groups benefit most from the existence of 'the state'? a) land owners, home owners and pensioners; or b) entrepreneurs, workers and investors? I deliberately didn't include 'welfare claimants' as an option because they simultaneously lose out and are benefitted by 'the state' as it currently operates, so it's difficult to say whether they'd be better or worse off if we did things properly.
Vote here and here or use the widgets in the sidebar.
Monday, 28 June 2010
Fun Online Polls: Who should pay for 'the state'?
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11 comments:
shouldn't category 1 include "those who see it as their plaything" - I mean, if political parties standing for election had to "secure and deposit, on their own recogizance sufficient funds to pay for all their policy proposals" wouldn't we all feel more inclined to vote for them - their ideas, their money/capital at risk ...
Anon, good point, but I can't change it now.
Good one on 1) We get this all the time on town centre car parking charges. Both shoppers and traders benefit. But both demand someone else pays for it.
When I say "oh so you want to socialise parking" they get in a cufuffle and change the subject
RS, I don't mind paying for parking (in principle) but it's just the faff of finding the right coins and guessing how long you'll need and so on that irks.
Don't you have those multi-story car parks where you lean out of your car and pick up a ticket on the way in (always too much of a stretch IMO; you'd think they'd build them nearer but there you go) then you pay the exact-ish time used on the way out.
BTW the whole animus to the state from libertarians comes from a misapprehension.Strong states arose when rulers realised that Napoleon's citizens armies could beat up their old mercenary outfits.The answer is from the Libertarian p.o.v to go back to using mercenaries: we've got all those Gurkhas .But libertarians always make an exception to the army in their calls for abolition of public everything.But you can't have a bleeding great standing army to protect your property and a minimal state.
In your question which group benefits most from the state I believe we are all to some extent in both categories.
Obviously you can´t have increases in house prices and pensions (in the long term) without real growth in the economy. On the other hand you can´t have entrepreneurship without the state to make sure the playing field is even.
However with cheap money from the the surpluses of the oil states and Asia plus gradual lowering of interest rates from the highs of the 80s, people thought rolling over debts at lower interests was the same thing as creating wealth.
So if the homeownerists want to home prices to stay high they better start supporting industry. Every time I go back to the UK it seems there is some new bureaucrat (private or public) trying to get a piece of the action. You have ISO 9000, H&S, environmental etc. creating bodies for this that and the other with fees or stealth taxes up the ying yang meanwhile the work of actual production and sensible regulation is being ignored.
So maybe the question should be what is wealth? Is it asset appreciation or is it growth of capital? (in the classical Adam Smith sense)
@Andy
Yours is probably the best blog comment I have ever seen.
WHAT IS WEALTH ?
Everyone I know from whatever class and persuasion tries to ignore this principle economic question, beyond which you cannot proceed without certain confusion.
Of course this is because everyone wants it to be ANYTHING I can own for myself. And ONLY anything produced for everyone else! General NIMBYism.
I have tried many times last year to ask this question and always get shot down in flames by ALL comers, yet with no reason.
This tells me we are ALL NIMBY's in the end. And this is the real heart of the matter. I'm sick an tired of how we all try to walk across the road rather than face it head on.
DBC, I guess some do, but they are few and far between.
Andy, yes of course a lot of people will be in both categories.
'What is wealth'? A bit philosphical for me, but quite clearly, ever higher house prices make us all poorer in the end, not in a million years do high land values represent wealth; they merely reflect the extent to which land 'owners' can redirect overall wealth from the productive sector into their own pockets.
So while superficially scrapping silly regulations benefits the productive economy, this just means there is more wealth being created to divert into land values. The landowner always benefits far more than the true wealth creators.
RS, I wouldn't say we are all NIMBYs (although most of us are), I'd say that we are all rent seekers.
Robin, cheers!
Mark, I agree diverting money away from rent seekers with LVT would improve things but 90% of the population don´t get the idea of economic rent. I don´t know about you but when I mention LVT or economic rent to people they look at me like I came from Mars and see it as just another tax.
So I think the thing that people don´t get is that we don´t measure what is productive and what is non productive. The government only cares about GDP and the number of jobs created. If people understood real wealth I think LVT would be an easier sell
Anyhow keep spreading the word!
@MW. Fine line between rent seekers and NIMBY's. Both are proximate causes really. RS's (eek thats my initials) want something for nothing, N's want nothing for something ???
@MW a very common excuse when I request a definition of WEALTH is to say its too philosophical! Cop out. It is very much a reality in the economic sense. 1) Work, using 2) natural opportunities to produce 3) something that someone wants. Very simple. Very real. No doubt about it. We tend to deny this simple truth when we want wealth without working for it. That is rent seeking.
@Andy, once again, EXACTLY CORRECT IMO!
RS, that's a perfectly good definition if that's what you mean.
Andy, to be fair LVT is just another tax (albeit hopefully a replacement one!). But my argument is that land rents are inherently in the nature of a tax, i.e. "money that changes hands forcibly because of government action."
It is just that most taxes (income tax, VAT) are publicly collected and then given to individuals (via state spending or welfare, wasteful or not). It is intellectually quite easy to imagine these away.
But unless we have anarchy, land rents will always be collected (even if owner-occupiers simultaneously collect and consume those land rents)receive), so whether the state collects them and spends them; or whether the state enforces their payment but diverts them directly into private hands is neither here nor there AFAIAC.
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