Friday, March 01, 2013

A Simple Solution

I've given the subject of this post some more thought. And it has resulted in what I think is my basic political manifesto, at least in regard to fiscal and monetary policy, which is of course at the heart so much other policy.

I believe in doing away with all forms of taxation except for a tax on the productive value of land*. A government, after all, is territorial. My political philosophy, in any case, is to keep governments tied to their territories.

I also believe in doing away with all forms of social benefits except for the payment of a basic living wage to all citizens. The wage should be indexed to the cost of renting a reasonable home and buying a reasonable amount of staples. It should ensure survival without any draw on the citizen's time. It should also ensure the existence of a market for goods and services within the borders of the nation.

That is: the only money the state collects is a tax on land owners. And everyone gets a particular amount of money, printed and paid by the government, I guess every month would be the most suitable. ("Printed" would today probably mean simply direct deposit to whatever account a citizen specifies.)

Only people who want to own land will therefore have to deal with the revenue service. It would be part of the decision to get into that business. The cost of collecting and policing taxes would be unproblematic, and any evasion could be dealt with simply by appropriating and selling the land on which taxes are owed. (There would obviously be all the usual "due process" around this.) I think of the money collected by this means as money that would simply be collected and destroyed.

What is interesting here is that taxation would be the main instrument of monetary policy. It would keep inflation in check. Fiscal policy, the spending of the state would be fundamentally inflationary. The state would simply print whatever money it needed, fully cognizant that it would devalue the currency if it did not, over the long term, collect the money from the land owners.

This idea is age-old. I believe it is vaguely "Jeffersonian", and certainly something Ezra Pound would understand. It would seriously impede "progress" (understood as the process by which the rich become richer). It would not make the concentration of wealth impossible, but it would make those who are very wealthy, i.e., own a lot of land, much more responsibility.

It would also solve the unemployment problem (without, intriguingly, solving the employment problem.) Consider, people would want jobs (to earn more money than their living allowance) but they would not need them (because of the allowance) and they would have time to do whatever they wanted. So they could volunteer in whatever organization they hoped to work for. At some point a manager would notice that this is the kind of person we want to have around, and a contract would be negotiated. Simple.

I don't have any particular demands of the level of "democracy" that I hope to see, by the way. So long as everyone had money to buy food and basic necessities, and were otherwise not interfered with by the state, I think "freedom" would have arrived. Finally, let me say I would not be against implementing this kind of government globally.

Lots of things would change under this system. I'll write about that in the days to come. (What this has to do with language, philosophy and poetry, will soon become clear.)

*Update. May 10, 2013: My heart is in the right place, but I think this focus on "land" is a retrograde agrarian fantasy. It seems like there's a pretty simple alternative, namely, a "wealth tax". Let all taxation be a tax on the wealth of the citizens, i.e., whatever the government needs to collect it just takes from the accumulated wealth of those who have it. If you own say, .0001% of the nation's wealth, you pay .0001% of the nation's bills. Simple. (Actually it's even simpler since the nation doesn't really have to collect money to "pay its bills". It just prints whatever money it needs. Since those who accumulate wealth, however, are really just using their activities to collect the money distributed by the national dividend, i.e., harness its purchasing power. It is entirely fair to have them hand over the money they've collected in proportion to their long-term success in collecting it.) As proponents of a wealth tax point out, you are simply paying your fair share for the basic government service of protecting your property rights. The mere act of destroying all the money collected in taxes is already protecting the value of your property against runaway inflation (since the government is already printing the money for the following year's national dividend.)

No comments: