Randomly Selected Article or Link

...well, perhaps not quite but this is interesting, if blindingly obvious in a sort of a "why didn't we think of that" way:

I've been writing for a while now about how the globalization of communication (and delivery) technology is set to make it ever harder for states to quantify and collect taxes based on trade and incomes and make it imperative, if they want to have any revenue stream into the future, to switch taxation to more fixed sources like ("economic") land - ground rents, airspace, electromagnetic spectrum and so on, or face the prospect of ever increasingly authoritarian measures to force people to repatriate income and assets for tax purposes.

I hadn't counted on VAT being amongst the first to be threatened, but here it is. It's not going to help buying cakes from Tesco yet because it will only work if it is actually imported, I suspect (no getting away with simply operating from a warehouse in every town that happens to be owned by a Channel Island company I would think).

But people, liberal minded political types especially, need to wake up to this double threat - to recognize that revenue collection will be more difficult in future if based on moveable assets, incomes and trade, and to recognize that addressing that means going one of two ways - the more equitable land tax, or the more authoritarian crackdown on trade and "cross-border" earnings.  The ability to move money and income and so on overseas is moving fast and getting ever easier for the ordinary person - you no longer need to be super-rich to go offshore.  We need to act fast to counteract its effects on future tax revenues.

Rush Limbaugh really ought to stay away from stories about other peoples' legitimate drug consumption.

I don't quite know how I have managed to go through the last nearly forty years without seeing "Cathy Come Home" until tonight.

Especially with my interest in housing provision.

Have things improved? We've certainly demolished most of the women's hostels shown in the film. But what about absolute numbers in inadequate housing? The film quoted, I think, a million households in 1966. Government figures currently show just under a hundred thousand household accepted and in temporary accommodation.

But take Oxford. They are shown as supporting 742 households in temporary accommodation. But four thousand and more are on the housing register. So let's say there are nearly 600,000 households in inadequate accommodation. Then there's the estimate from Crisis a year or so ago, of the "hidden homeless" - those not on registers, "sofa surfing". They estimated another nearly 400,000 individuals.

As the last lines of the film said - "homelessness was seen as a temporary problem after the war, but the problem appears to be with us for the foreseeable future". Forty years on, it appears still to be a timely prophesy.

The Independent today reports criticism of Lib Dems' ideas for switching some of the burden of taxation off incomes, especially lower incomes and onto wealth accumulation, predominantly by the already well off and well paid, in the form of capping the tax relief on pensions contributions to the basic rate. I seem to recall the story will probably disappear from view for non-subscribers but you can still read it at the moment.

Of course regular readers will know that I'd prefer to tax only real property - the occupancy and ownership of scarce natural resources that we all depend on such as land, and not capital, but the criticism is unwarranted. You see, they complain that:

they would cut incentives for people to save for their retirement at a time when it was important to boost saving to help avert a long-term pensions crisis

and New Labour's John McFall, chairman of the Commons Treasury Select Committee, said:

"This comes at a very odd time. When the Government is trying to give every encouragement for people to save for pensions in later life, this cuts across those proposals. It goes against recommendations by Lord Turner and others to encourage savings. Instead, this will do the reverse. It is well-intentioned but naive."

Well-intentioned but naive is better suited to McFall's criticism though. There is no greater disincentive to saving for pensions than not having enough money left to put anything aside in the first place. And people in that situation are going to benefit from the transfer of part of the tax burden off of lower incomes and onto the ability to salt away ones excess income.

Already New Labour, friend of the working classes, has removed the cap imposed by the Tories in their heyday in 1989 on the proportion of one's salary one can put away in a pension fund. The effect? People with high incomes can choose to keep as income only what they need to survive and salt all the rest away in an ever wider range of pensionable assets, such as homes that other people might aspire to own instead of rent from the rentier pension fund, safe from the tax man.

As I blogged before, fully 50% of the population share just 7% of the accumulated marketable wealth of the UK. With a median household income - 50% of people live in households whose total income is below it and 50% above it - of just over £23,000 you have to be in the top 14% of households to fall into the Lib Dems' proposed higher rate (40%) income tax band of incomes above £50,000 and therefore be affected by this change - presumably even fewer individuals since this study is about household incomes (source: Institute for Fiscal Studies, Poverty and Inequality in Britain 2005 - this year's study shows no doubt similar figures, though I haven't looked at them yet).

Everyone else will have more (albeit slightly) left in their pockets and so increased capacity to save for a pension or anything else. Just who do New Labour, friend of the poor, want to help these days?

Me - I don't particularly like the tax proposal, and nor do I believe that it is feasible in the long term to rely for our pensions on being able to put away now some of what is already inadequate often to fund a decent lifestyle in the present, and hope that it will miraculously keep us in relative comfort in our dying days. But this criticism is, as they say, well-intentioned, perhaps, but naive, definitely.

Technorati Tags: lib dems, pensions, wealth distribution, tax