tag:blogger.com,1999:blog-1141932539860553199.post8677286522084643802..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: Modern Monetary Theory and Land Value TaxMark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger31125tag:blogger.com,1999:blog-1141932539860553199.post-21757102722652059892015-06-10T22:42:12.802+01:002015-06-10T22:42:12.802+01:00Dinero, combing back to this, let's suppose yo...Dinero, combing back to this, let's suppose you pay some tax. You have £100 in your bank account. The government debits the bank reserves (or vault cash) and the bank debits your account. Taxes function like forced money destruction.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-92177779412949892352015-04-21T15:09:27.771+01:002015-04-21T15:09:27.771+01:00The govt spends by crediting bank accounts and deb...The govt spends by crediting bank accounts and debiting bank accounts.<br />Because of course there is a peg between the commercial and central bank. Which is what allows a bank to function property. Why the UK could nationalise Northern Rock at the drop of a hat.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-36484240243299157672015-04-21T14:23:07.059+01:002015-04-21T14:23:07.059+01:00Thanks
good links.
And they do demonstrate that...Thanks <br /><br />good links.<br /><br />And they do demonstrate that taxes are paid, and the government spends, in Bank credit money - deposits.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-70030421698090514672015-04-21T14:10:09.069+01:002015-04-21T14:10:09.069+01:00Some links for Din :)
https://www.gov.uk/governmen...Some links for Din :)<br />https://www.gov.uk/government/publications/debt-management-offices-exchequer-cash-management-remit-2012-13<br /><br />http://www.parliament.the-stationery-office.co.uk/pa/cm200102/cmselect/cmpubacc/349/349ap02.htm<br /><br />http://www.bankofengland.co.uk/markets/Documents/sterlingoperations/summaryops130502.pdf<br />Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-44184874878205324172015-04-21T13:11:55.387+01:002015-04-21T13:11:55.387+01:00Taxes aren't paid in reserves they are paid in...Taxes aren't paid in reserves they are paid in Deposits.<br /><br />Consider if the Government taxed £1B in one day and Spent £1B in the same day its possible that no reserves would change hands at all. Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-77800830124087877522015-04-21T10:56:41.047+01:002015-04-21T10:56:41.047+01:00"only with legal tender laws, surely?"
I..."only with legal tender laws, surely?"<br />If you have to pay tax to the govt and don't pay, then you go to jail or get fined more taxes. You can't pay taxes in Bitcoin or Gold.<br />With LVT on the other hand, the govt stops enforcing your title deeds and just sells your house. Because here the govt is providing you with a service.<br />This is particularly the case for full on 100% LVT, where the govt effectively acts as a giant landlord. I agree with MW that this "dovetails" neatly with MMT. It is impossible to avoid as everyone has to live somewhere. The govt don't even have to know who lives there to sell the house.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-84302271130252499752015-04-21T10:36:02.613+01:002015-04-21T10:36:02.613+01:00"Interestingly the archaeological record show..."Interestingly the archaeological record shows that money was invented as a means for the citizenry to pay tax and the state to pay its army."<br />Right, money always works by coercion and force. So all this "markets invented money" is nonsense.<br />Markets created credit though. If I build Lola a house, Lola then buys some sugar at Bayard's convientience store, then if all know and trust each other we can work well. Credits/debits are ancient.<br />When we don't know each other, that's money comes in and facilitates those transactions.<br />And we still have credit now, through the banking system, except the banks are pegged to the govt money.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-28132776890335302232015-04-20T19:22:26.757+01:002015-04-20T19:22:26.757+01:00"But tax ensures the currency is stable and i..."But tax ensures the currency is stable and in demand"<br /><br />Interestingly the archaeological record shows that money was invented as a means for the citizenry to pay tax and the state to pay its army.Bayardhttps://www.blogger.com/profile/15211150959757982948noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-36603107937298779942015-04-19T21:11:35.483+01:002015-04-19T21:11:35.483+01:00R...the life and wealth out of all of us.R...the life and wealth out of all of us.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-79344131457874832942015-04-19T20:12:04.458+01:002015-04-19T20:12:04.458+01:00R The EU don't really get this Liberty and sel...R The EU don't really get this Liberty and self determination thing do they?Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-14207657531250522712015-04-19T20:00:15.799+01:002015-04-19T20:00:15.799+01:00http://www.theguardian.com/politics/2015/apr/19/wh...http://www.theguardian.com/politics/2015/apr/19/what-would-happen-if-britain-left-the-eu-consequences-of-exit<br />What a steaming pile of nonsense.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-70279357840762351372015-04-19T19:17:58.413+01:002015-04-19T19:17:58.413+01:00R But tax ensures the currency is stable and in de...R <i>But tax ensures the currency is stable and in demands.</i> only with legal tender laws, surely?<br />Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-1804252246301307692015-04-19T19:13:58.876+01:002015-04-19T19:13:58.876+01:00In Brunei you have negative foreign saving (net im...In Brunei you have negative foreign saving (net imports.)<br />The point the govt has to gain real resources somehow either by levying a tax or controlling resources to ensure demand for currency.<br />Bitcoin for example works as a currency despite no taxation. But tax ensures the currency is stable and in demands.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-23231288477554638512015-04-19T19:10:31.953+01:002015-04-19T19:10:31.953+01:00"Also, in Brunei, the money from oil is from ..."Also, in Brunei, the money from oil is from outside; its domestic use of oil is negligible, so the money the state gets from oil is not a tax."<br />I was saying if there was a tax on oil hypothetically, the govt is getting its wealth from demand for oil. If.you have a strong external sector a la Norway, you can get money from outside but by definition not every country can be a large net exporter.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-33712744363939526172015-04-19T18:25:18.676+01:002015-04-19T18:25:18.676+01:00"The govt can nationalise (seize) things and ..."The govt can nationalise (seize) things and charge for them, this is another way of transferring resources from private to public sector."<br /><br />But in Brunei, AFAIK, the oil never belonged to the private sector, nor did any minerals in the UK until some king, I think it was Charles II, started allowing landowners to own the minerals under their land. Also, in Brunei, the money from oil is from outside; its domestic use of oil is negligible, so the money the state gets from oil is not a tax.Bayardhttps://www.blogger.com/profile/15211150959757982948noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-30188536335307510352015-04-19T17:54:12.572+01:002015-04-19T17:54:12.572+01:00R.@17.45. Yes, that's the point I was making....R.@17.45. Yes, that's the point I was making. As a general principal it's bets not to waste time trying to fix a badly designed system. Better to scrap it and start over.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-59053963961397798892015-04-19T17:45:31.282+01:002015-04-19T17:45:31.282+01:00"assuming that the state has a monopoly of mo..."assuming that the state has a monopoly of money by right, as it were."<br />MMT explains how things are at the moment and how to improve them within the system. It doesn't suggest other ways of doing things.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-61684315978754979642015-04-19T17:18:51.451+01:002015-04-19T17:18:51.451+01:00let's call it Brunei, which funds all its gove...let's call it Brunei, which funds all its government spending from selling the oil that it (the state) owns.<br />The govt can nationalise (seize) things and charge for them, this is another way of transferring resources from private to public sector. In which case the "tax" is on use of oil use. It is all about real resources.<br />Money is a distraction. If the govt taxes oil at 50% profits and then prints some money and buys ice cream from everyone, the "wealth" came from oil.<br />"Would this be inflationary? I doubt it."<br />You'd have to ask MW. A shift from income tax, etc to land will likely be neither.<br />Getting rid of income tax is inflationary, LVT is deflationary.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-73202115772171858442015-04-19T17:06:35.835+01:002015-04-19T17:06:35.835+01:00"Where there is no Government, only a thrivin..."Where there is no Government, only a thriving community that shares land rent equality, all services are provided privately, and there is no taxing authority?"<br />A "community" getting together is government. You can do this via volunteers but it generally does not work well.<br />You have to understand what taxes are a way of transferring resources from the private sector to public sector. As rents/mortgage interest transfer to renters.<br />Unemployment is a type of excess capacity and that is always called by a monopolist restricting supply.<br />There is (usually) no unemployment in a barter economy.<br />If I impose a tax of 1 card on everyone in a room, and to leave it you have to pay, you are all unemployed in terms of my cards. If there are 30 people and only 29 cards are handed out, we have a problem.<br />And LVT/rents is dependent on money supply and is an auto stabiliser. <br />So currency monopoly needs to be managed correctly, just like land monopoly.<br />If land is "shared equally" you need to hand out LVT as CI. If you just burn the money people won't have any to use.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-23707677828927471882015-04-19T16:18:31.067+01:002015-04-19T16:18:31.067+01:00"To realize this you have to think harder abo..."To realize this you have to think harder about what taxation really is for. It certainly is not to 'fund' spending. It is to stop spending become inflationary."<br /><br />That does strike me a bit like someone, having unbolted the legs and lifted the top off a table, concluding that the purpose of the top was to stop the legs falling over.<br /><br />If the UK elected a radical hard left government, like in the film "A Very British Coup" and the governemt revoked all freehold titles and replaced them by leaseholds, with ground rents at market rent prices, thus funding all government services, then government revenue would be rent, not tax. Would this be inflationary? I doubt it.<br /><br />Even if you class all domestic government revenue as tax, you could have a state, let's call it Brunei, which funds all its government spending from selling the oil that it (the state) owns. There would be no taxation, but would this be inflationary? It doesn't seem so.Bayardhttps://www.blogger.com/profile/15211150959757982948noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-89000151182522903992015-04-19T15:33:04.872+01:002015-04-19T15:33:04.872+01:00BJ. As far as I understand MMT, then yes, I think...BJ. As far as I understand MMT, then yes, I think it seeks to explain the status quo and the symptoms that flow from that and propose a fix. It's all very statist.<br />FWIW I think that the state and money are market developments. The development of the state grows out of 'markets', even including monarchies. Money ditto. It's just a system of breaking down value into manageable gobbits to enable the exchange economy. MMT seems t think that money is 'law'.<br />Look, this is only a short comment and I know that there is a lot more too it than that.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-74039515005610903592015-04-19T14:35:08.026+01:002015-04-19T14:35:08.026+01:00@ Lola
Then at best it is treating a symptom rath...@ Lola<br /><br />Then at best it is treating a symptom rather than a problem.<br /><br />Once you hear people recommending banning the import of luxury goods (define that) then you know it's probably all garbage.<br /> benjhttps://www.blogger.com/profile/11544297406005346095noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-45018546664833952682015-04-19T13:56:08.373+01:002015-04-19T13:56:08.373+01:00This comment has been removed by the author.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-66722527809708465822015-04-19T13:45:09.729+01:002015-04-19T13:45:09.729+01:00BJ. It doesn't. Personally I reckon mmt falls ...BJ. It doesn't. Personally I reckon mmt falls form on mis defining inflation and by assuming that the state has a monopoly of money by right, as it were.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-19972166857314774612015-04-19T13:08:30.591+01:002015-04-19T13:08:30.591+01:00@ Lola
These days I tend to think of it about ali...@ Lola<br /><br />These days I tend to think of it about aligning incentives.<br /><br />Taxing income/capital is a coercive transfer of wealth/welfare from producers to non-producers.<br /><br />This obviously distorts incentives to produce.<br /><br />Likewise, capitalised land rent merely transfers wealth from producers to non-producers. <br /><br />Again this distorts incentives to allocate/use Land optimally which reduces output.<br /><br />If this loss of output isn't bad enough if the amount people pay in tax isn't the same proportion (relative to other people) as land they own by value, we get a net transfer of wealth/welfare.<br /><br />So, in the UK, because the top 1% of households own a disproportionate amount of land by value than they pay in tax(about three times more), the economic system is nothing less than a giant Ponzi scheme.<br /><br />It is set up to trickle about £100bn pa of wealth/welfare upto the top 1% of households each and every year.<br /><br />When we align incentives, good things happen.<br /><br />Prosperity and equality take care of themselves, without the need for State interference.<br /><br />Quite simply, incentives are only aligned we we have a fair distribution of the three factors of production.<br /><br />That means produced factors(income/capital) remain private and the non-produced factor(land) is equally owned (value shared).<br /><br />Not so difficult. Odd how economists/politicians fail to see it though isn't it?benjhttps://www.blogger.com/profile/11544297406005346095noreply@blogger.com