Automatic land reform at no public cost

Land reform — fully automated and at no cost to the public?

Find out how at our PUBLIC MEETING on Friday 24th March at 1.30pm, Quaker Meeting House, Victoria Terrace, Edinburgh EH1 2EX. RSVP.

RSVP.

The virtuous AGR economic cycle

Our resident Emeritus Professor of Economics, Roger Sandilands explains the virtuous AGR cycle that would bring prosperity to Scotland:

“Reduce taxes and rents will rise. Collect those rents as public revenue and, as
Adam Smith explained, current economic distortions and disincentives disappear. This leads to exponential growth of GDP 
(the magic of compound interest) and AGR. The increased AGRs finance increased public expenditure, which in turn sustains and increases socially-generated AGR in a self-sustaining, expansionary, virtuous economic cycle.”

Once you get to the point where harmful taxes and their disincentive and distorting effects are reduced to zero, those elements can be removed from the diagram. AGR continues to work at maximum capacity boosting progress and shared prosperity.

The favourable outcomes can be seen in Hong Kong and Singapore, whose economies blast the UK into the weeds.

How much damage is caused in Scotland by taxation?

Damages caused by current taxes are called ‘deadweight losses’. Nobel economists claim £2 is lost to the economy for each £1 of tax raised in Scotland today. SLRG uses a conservative estimate of £1 of deadweight losses per £1 of tax raised from sources such as Income Taxes and VAT.

Scots need to know the level of deadweight losses their government chooses to inflict.

SLRG Demand

Parliament will command an assessment of the deadweight losses inflicted on Scotland by Acts of Parliament at both Westminster and Holyrood.

Without this information, the performance of Parliament cannot be objectively assessed, and elected representatives cannot be held accountable. Parliament must enact legislation which orders that, on an annual basis – when the Budget is submitted to the Scottish Parliament for scrutiny – the Cabinet Secretary for Finance will publish revised statistics on the increase or decrease in the deadweight losses arising from proposed changes to tax rates.

Armed with this information, full evaluation of the AGR fiscal instrument and how it compares with alternative strategies can be undertaken. At which point Scots may choose to mandate the reconstruction of their public finances.

HMRC does not know the net income of Scotland

What is the net income of Scotland, the sum from which revenue could be raised to fund public services?

HMRC has never bothered to find out.

That’s because the socially-generated rents of land, public value currently flowing into private pockets, would need to be assessed. Land speculators in control at Westminster would lose that portion of the Public Purse which they have succeeded in diverting to their own bank accounts.

This information is urgently required by Parliament and voters alike: How much unearned economic rent is there, that could be collected with AGR? Parliament needs regular re-assessments of the rents being generated by the efforts of society in Scotland.

Net taxable income provides the best single numerical indicator of the health and wealth of communities at all levels – local, regional and national. HM Treasury and the statistical agencies have chosen not to compile data on economic rent. That omission needs to be corrected. We therefore make this demand of both Westminster and Holyrood.

SLRG Demand

Parliament will publish an annual assessment of economic rent generated from all sources in Scotland.

Without this information, the performance of Parliament cannot be objectively assessed, and elected representatives cannot be held accountable. Parliament must enact legislation which orders that, on an annual basis – when the Budget is submitted to the Scottish Parliament for scrutiny – the Cabinet Secretary for Finance will publish revised statistics on the rents generated within Scotland over the previous 12 months.

Armed with this information, full evaluation of the AGR fiscal instrument and how it compares with alternative strategies can be undertaken. At which point Scots may choose to mandate the reconstruction of their public finances.

 

A source of state revenue that does no damage

Adam Smith tried to draw to our attention a source of revenue which, if collected, would not reduce the revenue and wealth of the people:

“…no discouragement will thereby be given to any sort of industry. The… wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground rents…are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them.”

The Wealth of Nations (1776) Book V, p 370.

Scotland’s priority?

We can understand that the SNP priority will always be independence. Ours is cancelling £36bn Annual Scottish deadweight losses. Here is the basis of our thesis to be explored at our public meeting in Edinburgh, 24 March. Devolved powers now give Holyrood power to cancel the first £6bn of these losses by replacing a part of Income Tax with locally-collected AGR.