From an article entitled "Entrepreneurs will reap the rewards of business rates change", Simon Walker, Top C**t at the Institute of Directors writes, "Ask a small business what bothers them most on a daily basis, and it won’t be long before they raise the dreaded spectre of business rates. For many small businesses, it’s of more concern than corporation tax (a tax on companies’ profits the rate of which depends on the amount of profit)."
This is the Poor Widows in Mansions argument, but even more pathetic as it's made in defense of businesses clinging to the security blanket of imputed rent.
Firstly Walker ignores that taxing profit IS the tax on business. The better you are at making a profit, the more you get penalised for doing so. Walker appears to think this is fair compared to paying the fixed cost of rent.
Secondly, even Walker must know his point is only relevant to owner occupiers. It makes no odds to tenants if they are sweating over paying their rent to a private landlord or the Council. Yet, Top C**t Walker chooses to gloss over that pretty important point.
Thirdly, Walker chooses to ignore the role of rent in allocating valuable location and fixed capital. Rent is the market's way of saying, that one Capitalist is prepared to pay X amount to exclude others from using those resources.
If businesses are sweating if they can pay the rent or not, this shows the market is working as it should. Efficiently. If they cannot turn a profit and lose that premises to someone else, that is a GOOD THING.
It's truly ironic that a Lefty like Carol Wilcox at the Labour Land Campaign is more of a hardcore capitalist than the IoD and TaxPayers Alliance.
In their joint policy document cited by Walker in the article " 2020 Tax Commission" they recommend scrapping property taxes in favour of locally collected sales taxes.
Why? Because they do not want competition. Paying Business Rates puts owner occupiers in direct competition with renters. VAT provides a barrier to entry for small businesses.
The members of the IoD and Chambers of Commerce don't care if this shrinks GDP. It protects their shareholders interests and their place on the board.
For Walker to invoke entrepreneurism as the beneficiary for cuts to UBR is sickening. It's no good blaming the politicians. They just do whatever the fake-Capitalists tell them to.
Thursday, 8 October 2015
Simon Walker: Chairman of the Institute of Rent Seeking Parasites,
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23 comments:
Agreed.
"[corporation tax is] a tax on companies’ profits the rate of which depends on the amount of profit"
Nope. Since April 2015 we have a flat 20% corporation tax rate (one of the few good things the Tories have done).
Further, rent and rates in total is only about one-quarter as much as the total wages bill. They are slightly less than the total VAT bill and Business Rates on its own is barely half as much as the Employer's NIC bill.
So the whole article is based on a Big Fat Lie. My proper business clients moan about lots of things, I've never heard one yet moan about Business Rates.
"Paying Business Rates puts owner occupiers in direct competition with renters."
Well, it more levels the playing field, which, of course, is why the big boys want to get rid of it. The sort of playing field they like is the old "Yeovil Slope", with them playing downhill. I'm prepared to bet that it's the bigger businesses that tend more to be owner occupiers and tend to have premises in high-rate areas like central London. I don't suppose you get many entrepreneurs in Neath moaning about their rates.
@ B
As you know, only a fullon LVT levels the field. UBR still favours the big boys. Not good enough though. They want full protection from competition. Politicians are so gullible it could almost be mistaken for corruption. What's that seating arrangement at their party fundraising events again?
http://www.dailymail.co.uk/news/article-2677254/PMs-party-donors-11bn-guest-list-Billionaires-bankers-lobbyists-attendees-glittering-dinner-gave-access-Tories.html
https://www.thebureauinvestigates.com/2014/10/12/mansion-tax-raises-concerns-as-property-bosses-attend-tory-fundraiser/
No playing field will ever be perfectly level, but on a sliding scale between BR or LVT and VAT or Employer's NIC, it is always better to have more of the former and less of the latter.
What surprises me sometimes is that our economy/society functions at all, what with all the millions of unemployed or people in non-jobs/rent seeking; the stupid taxes, the subsidies to land values and banks etc etc. Anything which is better than this is better, even if it is only a bit better.
My thoughts exactly, although, the cost of the unemployed is peanuts compared to the cost of all the bureaucrats in non-jobs and the cost of their budgets. Every day seems to bring the announcement of another commission for this or a board for that or an institution of the other, all with their well-renumerated teams of gravy train passengers heading them.
I suppose that it has always been the case that any society that produces a surplus over the bare level of subsistence will find that surplus mainly diverted into the pockets of idlers and parasites.
Back when I was paying Richard Murphy a smidgen of attention, I found myself quite baffled by the fawning that Carol would make over him. And now I find she's arguing for placing sales taxes *ahead* of property taxes? Are you sure she's not a double agent?
@ F
Sorry, I worded that badly. The IoD and Taxpayers Alliance produced that joint document called "2020 Tax Commission"
Headed by none other than Alister Heath, needless to say, property taxes bad, VAT good.
The authors of that document read like a who's who of faux-libs in the UK. It's quite worrying the IoD would sponsor such a thing.
Walker is an ideologue first, representative of an important organisation second. When ever property taxes are mentioned, Mansion Tax for example, he's in the media denouncing them.
I could however imagine Murphy recommending VAT over an LVT too. He's a Cnut too.
Fraggle, I emailed Carol just now and she denied having said any such thing. She agrees with me that VAT is the worst tax!
B: "I suppose that it has always been the case that any society that produces a surplus over the bare level of subsistence will find that surplus mainly diverted into the pockets of idlers and parasites."
Yes, Jared Diamond devoted a whole chapter to it, he also ties it in with land ownership but I don't know if he's a georgist.
Jared Diamond said that? In one of his books? I did read his 'Guns Germs and Steel', which was rather good.
PC, yes in GGS chapter 14 'rise of the kleptocracy'
Ta. Will have a look at that later.
Thanks for the clarification, peeps! :-)
Kudos to Carol. None of the rest of us showed the patience necessary to change RM's opinion on LVT, although enough of us have tried. But she succeeded. Respect is due.
Homey:
"I have a serious philosophical issue with a land value tax. What if I want to buy a piece of land, build a small house, and live off of my small pension, growing my own food, and generally wanting to be left alone.
If the basis of taxation is the value of my land, and my neighbors build mansions, increasing the nominal value of my land, I can't afford to stay there because I suddenly can't afford to pay taxes on it.
In my opinion, that poses a serious social justice problem. A person who is not dependent on others ought to be allowed to be left alone if he wishes to be."
@ R
The reason Homey has a house/pension/ability to grow his food is because he is not alone.
To argue otherwise is childish nonsense.
No one has the right to exclude others from valuable location without paying compensation, in the form of market based rent to the community, for that privilege.
To argue otherwise is childish nonsense.
R, I've heard that one a thousand times, but seriously, how many people are there who pack in working, buy a small hold and grow their own food in the UK? None?
If you really were intending to do such a thing, then
a) buy yourself a patch of farmland in the middle of nowhere, where there is no risk that people will build mansions around you.
b) remember that there would be a personal allowance or Citizen's Income built in, so the people who live on lower value plots don't pay any LVT anyway.
"how many people are there who pack in working, buy a small hold and grow their own food in the UK? None?"
Quite a few here in Wales. But yes, it really wouldn't be worth levying LVT on agricultural land, or alternatively, as you said you could have an allowance per acre (i.e the first £x of rent or imputed rent is untaxed) which is philosophically no different from an income tax or CGT allowance.
BJ and M, you appear to have missed the mention of a pension. This is a reappearance of the mythical PWIM wearing a disguise. As a pensioner, your homey would be able to elect to roll up his LVT to be payable on his death on the sale of his house. If he's sold up and bought himself a small place in the middle of nowhere, then he'll have already given his kids their inheritance, won't he?
"I could however imagine Murphy recommending VAT over an LVT too. He's a Cnut too."
Please don't compare that man with one of England's best kings. "Cnut" with a small "c", please.
B, ok I should said "how many are here who grow ALL their own food? None?"
Well, some of them are self-sufficiency enthusiasts. One of them even wrote a book about it: https://en.wikipedia.org/wiki/John_Seymour_(author)
B, yes there are plenty who grow "some" or "a lot" of their own food but nobody is near being truly self sufficient. Do they manufacture their own medicines, weave their own clothes, smelt their own iron, slaughter their own animals? Do they fuck.
Either way, as explained, farm land is so low value that there would be no tax on it. And there are plenty of homes in Wales that would easily fall below the personal allowance/Citizen's Income level.
So as per usual, in practice this is a non-problem.
"If the basis of taxation is the value of my land, and my neighbors build mansions, increasing the nominal value of my land, I can't afford to stay there because I suddenly can't afford to pay taxes on it."
Fuckwit. If the land is in a place where people can afford to and are able to build mansions nearby, it is already worth a huge amount of money, even without the mansions, which Homey will find out as soon as he enquires the price.
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