No need for taxation.

[neilm]

Apr 2, 2020 17:22:25 GMT J.G.Harston said:

Apr 2, 2020 17:11:01 GMT @boogieeck said:

A hah

I forgot about this, there is a part two to it. Like a democratic United Arab Emirates we are sitting on an oil like substance, but some sort of special non carbon non-pollutey oil, that is not found anywhere else on earth, is unlimited and is cheaper to extract than water from the rivers. The whole world wants it and is happy to pay $20/barrel, at which levels the world will undergo an economic boom

The government holds all the rights. We no longer have any need of taxation.

We can come onto expenditure in another week or so, but my question is this:

What taxes would you RETAIN and why?

Oil-like-substance extraction taxes, natch, otherwise where does the money come from?

What taxes does Alaska have? They abolished Income Tax when they set up the sovereign oil fund citizens' dividend scheme.

That's all gone to shit under the current governor.

[J.G.Harston]

Apr 2, 2020 19:16:10 GMT neilm said:

Apr 2, 2020 17:22:25 GMT J.G.Harston said:

Oil-like-substance extraction taxes, natch, otherwise where does the money come from?

What taxes does Alaska have? They abolished Income Tax when they set up the sovereign oil fund citizens' dividend scheme.

That's all gone to shit under the current governor.

Yeah, I was listening to a programme on the radio about it the last time I was driving. Essentially, Shareholder A says "we need this money more than you!" and takes Sharehold B's dividends.

[🏴‍☠️ Neath West 🏴‍☠️]

The traditional alternative to taxes is of course tariffs. Any advocates of a high-tariff, low-tax economy?

[J.G.Harston]

Apr 4, 2020 18:54:16 GMT @boogieeck said:

What that means is billing consumers higher prices instead of hitting them with higher taxes. The difficulty is that you have no fiscal control over the retaliation

I am trying to get to imagine that YOU DONT HAVE TO LEVY TAXES OR TARIFFS. You have enough money from the oil-like substance.

Would you still levy taxes on tobacco and alcohol? What other taxes and tariffs? Would you retain the congestion charge? Council tax? Parking charges? Fees for planning applications? School meals?

I am going somewhere with this.

Local authority funding is the elephant here. If the state's sole revenue is treacle extraction duty, then that is the state's revenue stream, and the state will have to chose how to distribute it to local authorities for local authority expenditure. It would be difficult to devole the tracle duty to local authorities, as the treacle mines won't be evenly distributed across all local authorities. Quirm will be floating in money, but Sto Lat will be destitute.

Funding neccessarily goes hand in hand with "what do you want to buy?". If you have no funding you can't buy anything. If you have plenty of funding you can chose what to buy - and chose how much funding to take.

It would be workable in a state small enough to be essentially a sole polity, a city-state. But that still doesn't protect it from cheaper treacle being discovered somewhere else and making your treacle mines uncompetative.

[Richard Cromwell]

Introduce LVT, but instead of calling it a "tax" on land "owners", call it "rent" from land "holders". Then, hey presto, the state is funded without taxation.

[J.G.Harston]

Apr 5, 2020 12:34:22 GMT Richard Cromwell said:

Introduce LVT, but instead of calling it a "tax" on land "owners", call it "rent" from land "holders". Then, hey presto, the state is funded without taxation.

That's sort-of how Hong Kong did it before fiddling about with the tax system. All land in HK is leasehold*, with the HK government the sole freeholder. For a long time all HK government income was ground rent. The HK government is also the sole entity that can create more land, and land reclaimed from the sea automatically becomes government land.

* All? Well, not entirely... One small village of indomitable Gauls Anglicans holds out, the Anglican cathedral is on the sole piece of freehold land.

[J.G.Harston]

Apr 5, 2020 14:25:05 GMT @boogieeck said:

This appears to involve nationalising all land without compensation, ie confiscating it, or if you prefer levying a one-off final tax of 100% of the land value, which must be paid in land, while simultaneously offering every former landowner a life long lease on the same piece of land.

Attractive semantics

It is only workable when first creating a polity, as in Hong Kong and - via the confiscation method - Norman England. The Norman state though fell to the perennial tempatation to dispose of long-term revenue-raising assets in exchange for short-term advantages.

If the treacle mine duty provides the state with all the money it could ever want, then there is no need for any other revenue raising. But, as with Hong Kong, the temptation is always there to levy taxes to change behavoir. HK put a tax on the Harbour Tunnel in order to try and persuade people to use it less and to use the untaxed Eastern Harbour Tunnel. And there's that "all it could ever want" bit - can that ever be forever true? Income tax was brought in as a "temporary measure" after the war for emergency funding - essentially, the treacle mines had been bombed. Alcohol taxes were introduced to try and change behavoir - they have recently been abolished.

I don't like using taxation to change people's behavoir. If the behavoir is so abhorrent, why not just fine them?

As a free trader I'd abolish all and every import tariff. (Stop screaming at the back)

If your sole income is the treacle mine duty, there's always the temptation to increase the duty to match spending aspirations instead of spending what the duty can pay for (hello parish councils!). HK has falled into this trap in that revenue is based on land values, and pushing up land values increases revenue, but then makes occupying that land too expensive for many residents. If your revenue is based on something exportable there is less of this problem, you can't export land but you can export treacle.

[J.G.Harston]

Apr 5, 2020 14:26:13 GMT @boogieeck said:

ARE YOU GOING TO RETAIN TAX ON BOOZE AND FAGS WHEN YOU HAVE NO NEED OF THE REVENUE DUE TO THE TREACLE MINES ?

NO!

[myth11]

Apr 5, 2020 12:34:22 GMT Richard Cromwell said:

Introduce LVT, but instead of calling it a "tax" on land "owners", call it "rent" from land "holders". Then, hey presto, the state is funded without taxation.

Freeholders used to pay something call chief rent but at fixed rate in perpetuity so it became worthless and have mainly been forgotten however they are still charged in some places but will be abolished 22 August 2037.