Land Value Taxation Campaign

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Land rent for public revenue

An essential book for a confused time

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PROTECTION OR FREE TRADE? was written by Henry George in 1886. It is still in print and readily available. It rebuts most of the arguments being put forward by both camps in the Brexit debate, as well as the protectionist sentiments that seem to be at large in the USA following the election of Donald Trump. It has become essential reading, for it provides a guide to the morass of debate that has developed in the wake of the referendum result and the Trump presidential victory

The EU is founded on protectionist trade principles, as becomes clear when people express concern about losing access to the Single Market, which is not a free trade area but a customs union, sustained by an external tariff wall and the internal tariff that is Value Added Tax. Brexit supporters are divided between those who want to see a tariff wall around the UK, under the pretext of protecting British jobs, and a minority, who are in favour of genuine free trade.

Trump was elected partly on the populist belief that protectionism would somehow bring about a revival of industry in the US which has become obsolete as production has moved to other parts of the world. It seems as if he is intent on putting policies into effect with the intention of reversing this long-term trend. They can be guaranteed not to work, except in isolated instances. The overall result will be to do nothing but damage to the US economy and make most people poorer. A trade war with China also brings with it wider risks.

George demonstrates, wittily, with irony, and using the technique of reduction to absurdity, the fallacy of the protectionist arguments. Anyone who reads the book will realise that the best way forward for a post-Brexit Britain would be to open the doors to tariff-free imports and scrap the internal tariff of VAT. The prospects of the latter do not look good, unless the Chancellor takes the bold step of putting the tax under scrutiny. Tariff-free imports, on the other hand, are a more realistic proposition, if only because of the trouble and expense involved in blocking the import of goods by holding them in customs compounds at every port around the country while they wait for clearance.

However, unless we get rid of VAT and resist the temptation to replace it with some kind of purchase tax, people entering the UK will once again face the return of the "anything to declare" business, the abolition of which was one of the better aspects of being in the EU.

 

The staff-cutting imperative

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The current disruptions on the railways, the cost of care for the elderly and a host of other issues affecting labour-intensive services can all be traced to a single cause: that the principal sources of public revenue should come from the taxation of labour, goods and services rather than the taxation of the rental value of land, which is what we have consistently advocated.

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Arran farm evictions

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There has been a wave of evictions of farmers on the Isle of Arran, following a ruling by the Supreme Court, that tenants' rights granted under Scottish legislation in 2003 contravene the landowners' rights under the European Convention of Human Rights. The case is complicated. In short, however, the ruling appears to contradict the principle that ownership of a land title is not the same thing as absolute ownership of land, and that the title is no more than a grant of rights over land, derived ultimately from the Sovereign. Thus the decision undermines Sovereignty and the Sovereign's rights to determine the terms of the grant of title.

http://www.bbc.com/news/uk-scotland-38105277

https://www.supremecourt.uk/cases/docs/uksc-2012-0111-judgment.pdf

 

The dead loss of VAT

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Brexit is a golden opportunity to get rid of all the trade tariffs we have been saddled with by the EU - that is, to reduce taxes on sales of goods and services, by dropping not only existing ‘free trade agreements’, with their enforced tariffs, but while we are at it, VAT as well.

VAT is a trade tariff - just the UK’s intra-national version. The irrationality of government, elected by the people, is here without bounds when it comes to such a destructive tax. Persisting with VAT merely retains our own home-grown version of the poison of trade tariffs.

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Fee trade area

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The Single Market is described as a free trade area. In reality, is very expensive. It means that if you want to trade with me, even if we are next-door neighbours, we can only do so legally over a 20% high tariff wall between us - Value Added Tax. In some EU countries, the internal tariff wall is even higher - 25% in Sweden. That is not much of a free trade area. Fee trade area, more like.

Green and Brown are neighbours. Green does gardening work for Brown at an agreed price of £200. Brown services Green's car for an agreed price of £200. There are three possibilities.

  1. They exchange their services and no money changes hands.
  2. They pay cash to each other.
  3. They bill each other and add 20% VAT.

If VAT is not a tariff barrier against legal trade, then what do you call it? What do you think they will do in practice? You could of course say the same about income tax. Why would Green pay Brown taxable wages when he could just pay cash under the table?

VAT and Income Tax are a pair of poisonous fruits.

 

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