The operation of the UK government tax scam, by which capital gains from high value locations rapidly offset, then overtake, the entire lifetime tax liabilities of site (home) owners, is documented in Fred Harrison’s book, Ricardo’s Law.
The unearned wealth extracted by site owners is produced by society as a whole when it invests people’s taxes in amenities.
This travesty, of course, leaves the full costs of state to be borne by others less fortunate. And explains the ‘necessity’ for government-applied Austerity.
Must Holyrood approve and perpetuate such Westminster cons? So far, the Scottish Parliament has exhibited little awareness of the culpability being transferred onto its shoulders from Westminster.
Take, for example, devolved Income Tax. Will the Scottish Government tell us how much Scotland loses each year from the deadweight losses of Income Tax, a tax it now independently champions in Scotland for the first time?
£12 billion (Harrison)? £24 billion (Feldstein)? Or even more?
AGR/LVT please (zero deadweight losses)!
A meaningful referendum would be one in which the British people were consulted on whether, after Brexit, they wish to be liberated from the taxes that impose £500bn+ worth of avoidable damage to the wealth and health of the nation (Scotland £36bn+).
The only viable strategy for the UK is a reform-led programme that organically restructures the economy to replace rent-seeking with value-adding enterprise. That is, migrating from taxing wages and trade to AGR/LVT. This would re-balance relationships between the regions by eliminating the economic bias that has favoured London for centuries and continues to do so today.
If Scots embraced such a reform and Westminster resisted the erosion of its traditional unfair London and south-east privileges within the ‘UK Idea’ as currently managed (likely), Scottish independence would be certain and Scotland’s future bright.
With AGR Scotland, on its own, would indeed prosper. Annual deficits would be history. The policy of indebting our children before they are born would be binned.
As a full partner (not a status achieved to date) in a reformed AGR-UK, Scotland would prosper even more. But whether Westminster can adapt in the face of pressure from vested interests at the roots of UK inequality is doubtful. In which case Scotland must move to AGR/LVT alone.
Holyrood can start today by using existing devolved tax varying powers to swap a large chunk of Income Tax (or indeed all of it) for locally collected AGR/LVT. Even this first step would radically transform the lives of Scots for the better. Powers to eliminate the other two thirds of the economic damage (attributable in the main to VAT and National Insurance) are yet to be won.
In this SLRG pamphlet the authors describe the post-Brexit era as the first realistic chance since 1945 for all of the political parties to unite behind the one financial reform that would forge a new start for the United Kingdom. That is, the migration from a system of taxation which represses production by at least £500bn a year to Annual Ground Rent (aka Land Value Tax).
Read the pamphlet here Blitz or £500bn.web.
Scotland after Brexit can flourish as never before. Over the past 300 years, the peoples of the four nations laboured under a tax regime which imposed an artificial ceiling on productivity.
Those taxes continue to create havoc in people’s lives. The only viable strategy for the UK is a fiscal reform-led programme that organically restructures the economy to replace rent-seeking with value-adding enterprise. This would re-balance relationships between the regions by eliminating the bias that now favours London. And it would transform the City of London to secure prosperity across the kingdom.
A national conversation is needed to create the democratic mandate that authorises the re-design of the public’s finances. And the leaders of all political parties must agree to work together to eliminate the internal barriers that rupture people’s health and wealth.
The annual UK damage caused by the tax regime amounts to at least £500bn. The palliative policies that are supposed to mitigate that damage have failed.
Twice in the 20th century the people of Britain mandated the structural reform of their finances. Twice the law was enacted. Twice, Parliament failed to honour the “rule of law”. Will Holyrood and Westminster now grasp the opportunity offered by Brexit to bring our nations a new kind of prosperity?