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Sunday, 13 September 2015

Why you can't hand out land value tax as citizens income

You can of course - the title is clickbait :b
However it would be probably be better if the citizens income is slightly less than the land value tax. Stick with me.
The reason is the same as why you don't "tax the rich" and hand it out as citizens income.
Yes this "boosts" the "productive economy." But there are limits - real resources limits.
You can't "print prosperity" unless you are wasting resources ;)
Rentiers tend to be very rich (yes, I know there are Poor Widows in Mansions) and save a lot. Taxing these savings is not an inflation control. It does not control the flow of real goods and services, which is induced by money changing hands.
Yes a lot of money is earned unproductively through rent-seeking. But not a lot of stuff is consumed and its the stuff that matters.
It's a bit like the "tax the rich" idea to "fund the NHS." Doctors have to be trained, or stolen from abroad.
Inflation is a function of the flow of money and not the stock.
So Mark's proposal is really equivalent to "handing out" LVT as Citizen's Income, plus a citizen's income "printed."
Yes, a few resources are wasted (e.g. FIRE industry.) But that is not enough.

What I am ready looking for is a dynamic model like this instead of a static model like the VAT models Mark uses. This is my challenge to the Georgists :)