[internetguru]

(Original post by Rhadamanthus)
Why would I want to turn over a complex political and economic decision like this to the general public? We have elected a government to do these things for us. As one of the least centralised political organisations in history that has done a lot to guarantee economic freedom for parts of Europe, I'm not entirely opposed to the EU.

I personally would prefer a house vote on it as I did with the monarchy referendum. The problem is the majority of the MPs in the house are idiots and still think we should stay in the EU because they have some glorified vision of turning Europe into a super state.

[Jarred]

(Original post by JPKC)
Does any bill specifially mention this £25bn? And, even so, the Chancellor is seeking to increase the amounts local authorities have to spend without increasing this figure (which I admit I had no idea existed. I can't find it mentioned in the Welfare Act - perhaps the Libers should break their bills down so that all their component parts can be properly scrutinised). The funny thing is, the Chancellor was fine with the local income tax even without knowing of the £25bn central funding. The fact that it exists suggests you lot disagree with his argument, which is reassuring.

Actually JPKC, or is that Ysolt, I forget?.. I was perfectly aware of that, as it is outlined in the notes in the Welfare Act, though it now seems that was slightly miscalculated, oh well my point stands, I can read and I assumed you could too. I was assuming that you were in knowledge of that funding and were claiming that despite this, a local income tax was still undesirable, so had to explain why it wasn't by using the other available arguments, of which there are many. The fact that you had no knowledge of this available local government funding at all suggests your whole argument on the matter a few days back was entirely misinformed. That being said, I should take a moment in the future to not make assumptions that people are aware of current spending commitments and declare everything in the argument rather than assuming you know it already, though I do try to avoid that currently in case I look a bit patronizing. Anyway I digress, you not being aware of the local government spending is an easy enough mistake and is one of the reasons I like the idea of creating some kind of resource/article here in the MHoC which gives you changes to spending commitments and tax revenues at a glance rather than having to claw your way through bills, but that's a discussion for another day.

Sorry to hijack your thread for a moment Libers. You can have it back now.

[jesusandtequila]

(Original post by JPKC)
x

Aha! I didn't cock it up in the end. False alarm. The Tax Act 2011 removed Council Tax, and replaced it with central government distributing the money, meaning that pre-Welfare Act 100% of the £100bn was distributed by central government. Cutting this by £75bn meant there was still £25bn distributed by central government. So we didn't accidentally fudge the figures.

[JPKC]

(Original post by Jarred)
Actually JPKC, or is that Ysolt, I forget?...

It's the Internet, my name could be Penisface for all that it matters. And Ysolt's my cat's name - she's not great at typing.

I was perfectly aware of that, as it is outlined in the notes in the Welfare Act, though it now seems that was slightly miscalculated, oh well my point stands, I can read and I assumed you could too.

That's funny, it's not mentioned in the Notes of the Welfare Act. And if you were aware of it then why were you arguing against it? Also, why did you not mention it in the debate? You may well have known about it, or this may just be a retroactive attempt at saving face, either way it doesn't really matter. Mistakes are just mistakes, no worries.

I was assuming that you were in knowledge of that funding and were claiming that despite this, a local income tax was still undesirable, so had to explain why it wasn't by using the other available arguments, of which there are many. The fact that you had no knowledge of this available local government funding at all suggests your whole argument on the matter a few days back was entirely misinformed. That being said, I should take a moment in the future to not make assumptions that people are aware of current spending commitments and declare everything in the argument rather than assuming you know it already, though I do try to avoid that currently in case I look a bit patronizing. Anyway I digress, you not being aware of the local government spending is an easy enough mistake and is one of the reasons I like the idea of creating some kind of resource/article here in the MHoC which gives you changes to spending commitments and tax revenues at a glance rather than having to claw your way through bills, but that's a discussion for another day.

Look, mate, it doesn't matter. The Welfare Act was ages ago and you can be forgiven for forgetting how parts of it work (I agree, an article would be good (or just more detailed Notes in the bills themselves)). If I recall correctly, there was some confusion over how Resident's Income is distributed present in the Budget. When J&T suggested wacking the rate of GRT up to 85% you seemed to think it would disproportionately harm farmers (a mistake I made when I first read through the Tax Act 2011). We've all been wrong at some point, let's just accept that it sometimes happens.

And you're right. Not knowing about the £25bn of additional funding did make my critique of the LIT more focused on how unfair it would have been without that. (If you had known about it then surely it would have been the most obvious statement to include in your response rather than spouting that mantra that poor people should pay more for the public services they're reliant on - something you clearly don't accept if you agree with the £25bn!)

Sorry to hijack your thread for a moment Libers. You can have it back now.

They won't mind, it's debating their policies after all.

(Original post by jesusandtequila)
Aha! I didn't cock it up in the end. False alarm. The Tax Act 2011 removed Council Tax, and replaced it with central government distributing the money, meaning that pre-Welfare Act 100% of the £100bn was distributed by central government. Cutting this by £75bn meant there was still £25bn distributed by central government. So we didn't accidentally fudge the figures.

It confused the heck out of me when you said you'd made a mistake (I thought I'd finally grasped the system only to have my hopes dashed)!

[jesusandtequila]

(Original post by JPKC)
It confused the heck out of me when you said you'd made a mistake (I thought I'd finally grasped the system only to have my hopes dashed)!

Indeed. I completely forgot we'd had the Tax Act 2011 since we changed a whole load of stuff in the Welfare Act 2012 that I thought it was just that! Thus when I saw the £75bn cut I was like, oops? But it does all tie in. The system of funding the £100bn (+ housing benefit) spent by local government is £25bn distributed from central government and £75bn+ from the local income tax.

The update to the Welfare Act will still be on it's way with the updated figures and a couple of tax changes too (to continue our theme of replacing taxes on income and consumption with taxes on land and to make up the revenue needed for the increased rates).

I think it might be helpful to have a thread that keeps track of the fiscal position and which mechanisms have changed, in a thread. I'd be happy to contribute to this - if we could find another couple of people then we could help to solve some of the debates of how much x would raise. If it's kept track of and presented clearly, then it'll help all members to follow. As it is, mind, the tax system on here is a whole load simpler than RL.

[Jarred]

(Original post by JPKC)
It's the Internet, my name could be Penisface for all that it matters. And Ysolt's my cat's name - she's not great at typing.

That's funny, it's not mentioned in the Notes of the Welfare Act. And if you were aware of it then why were you arguing against it? Also, why did you not mention it in the debate? You may well have known about it, or this may just be a retroactive attempt at saving face, either way it doesn't really matter. Mistakes are just mistakes, no worries.

Well it's mentioned somewhere. I can't remember where but in one of the Liber's bills, I definitely remember seeing it in my time, and if not an exact "25 Bn" number, then something which heavily implied it, ie a calculation to this effect. Come to think of it, it may have been the Tax Act I'm thinking of, but it is mentioned somewhere.

Look, mate, it doesn't matter. The Welfare Act was ages ago and you can be forgiven for forgetting how parts of it work (I agree, an article would be good (or just more detailed Notes in the bills themselves)). If I recall correctly, there was some confusion over how Resident's Income is distributed present in the Budget. When J&T suggested wacking the rate of GRT up to 85% you seemed to think it would disproportionately harm farmers (a mistake I made when I first read through the Tax Act 2011). We've all been wrong at some point, let's just accept that it sometimes happens.

I certainly admit to misunderstanding the Resident's Income at a point during the budget. It's easy enough to be wrong especially with matters that hapenned a while back. Not the GRT though, I understand that and have been an advocate of land value taxes for a while (long before it was brought in on here, I remember being very happy when I first saw it on here though back in my pre-MP days, I love the idea of an LVT) that was simply a matter of disagreement rather than misunderstanding, much in the same way you and I disagree with what amount of tax the rich should pay, neither of us misunderstands the tax system there, we just differ in opinion. The fact is that those with more land will feel a GRT more, it's largely progressive, and whilst that is one of it's virtues, I think when you whack the rate up that high it's going to become a lot more of a burden to landowners with very large amounts of land, farmers as an example. It won't affect their behaviors in the same way other property taxes would (it doesn't provide an disincentives for property improvement for example since it's based on the value of ground rents of the land as though it were unimproved) and thus there's no real way of it affecting output (which I believe was J&T's point) but my belief is that it will affect how much those people have to spend and would take about 170 bn extra out of the economy (559bn * (85/100-54/100)), which in my opinion will indirectly have the exact same effect as any tax rise would. The tax itself doesn't directly affect output like the other taxes we have do, it's a lovely tax, but it is wrong in my belief to deny that it would have indirect negative impacts because the way I see it is that when people keep less of their money they have less to spend and the economy will suffer. The economy is only as prosperous as the people who support it, and those people are consumers, and those very same consumers live on land too. There are lots of variables to analyse with tax and how it affects what people do, but my point was that such a high amount being taken out of the economy would definitely have an effect, a bad one at that. I'm fine to see the GRT rise a bit but not that high.

(Original post by jesusandtequila)
x

Come to think of it, did I ever actually reply to your message in the Budget about 5 days or so back? I think I remember putting it off till the morning (since it was like 4AM when I read it) and forgot about it? Very sorry if that was the case, I've forgotten to reply to something I'm sure of it, my memory has just been jogged and I think it was you. Kinda feels like overkill to directly reply to it now in that thread. Though I kind of have answered some of what you said (from what I can remember) with my correspondence to JPKC in this post.

(Original post by JPKC)
And you're right. Not knowing about the £25bn of additional funding did make my critique of the LIT more focused on how unfair it would have been without that. (If you had known about it then surely it would have been the most obvious statement to include in your response rather than spouting that mantra that poor people should pay more for the public services they're reliant on - something you clearly don't accept if you agree with the £25bn!)

I did know about it, I can assure you that, I spent countless hours going through numerous bills when I wrote that budget, it got bloody tedious at points (I had like 20 tabs open at most points, either full of bills, PMs, etc. my focus was looking for numbers and was completely aware of the local government spending, it was somewhere in one of the bill's notes or in the discussions). I thought you were making the argument of "That grant's not enough, LITs would still hurt poorer areas more".


Sorry about my misunderstanding though I should be apologizing to myself because like you said it was the most essential point of argument to make, I should've had the sense to raise it anyway despite me thinking you were aware of it. I just thought someone like yourself would be aware of something as simple and basic as the existence of local government grants that I thought not to mention it.

I never said I thought poor people should pay more for their services, I wasn't advocating tax on consumption, I was advocating allowing more freedoms to councils to set their own rates and make their own decisions, and I believe that works better when they're taking in their own income rather than getting it all from central government, they need to feel the impact of spending the money, when you're spending someone else's cash it's a lot easier to squander it pointlessly right? So they should have to rake it in themselves and will theoretically spend it more sensibly. The 25bn acts as a buffer to smooth out issues such as the one you mentioned, however, it is still a low enough grant that it doesn't cause the reliance issue I foresee, and councils will still have to be self sufficient rather than relying entirely on the Chancellor's cash stash and will still spend their dough sensibly.

[Jarred]

(Original post by jesusandtequila)
Indeed. I completely forgot we'd had the Tax Act 2011 since we changed a whole load of stuff in the Welfare Act 2012 that I thought it was just that! Thus when I saw the £75bn cut I was like, oops? But it does all tie in. The system of funding the £100bn (+ housing benefit) spent by local government is £25bn distributed from central government and £75bn+ from the local income tax.

The update to the Welfare Act will still be on it's way with the updated figures and a couple of tax changes too (to continue our theme of replacing taxes on income and consumption with taxes on land and to make up the revenue needed for the increased rates).

I think it might be helpful to have a thread that keeps track of the fiscal position and which mechanisms have changed, in a thread. I'd be happy to contribute to this - if we could find another couple of people then we could help to solve some of the debates of how much x would raise. If it's kept track of and presented clearly, then it'll help all members to follow. As it is, mind, the tax system on here is a whole load simpler than RL.

I'd be happy to help with that. Though I wonder if it'd be better as an "article" if that's the right technical term, in the same league as the Constitution and the Guidance Document?

[jesusandtequila]

(Original post by Jarred)
Not the GRT though, I understand that and have been an advocate of land value taxes for a while (long before it was brought in on here, I remember being very happy when I first saw it on here though back in my pre-MP days, I love the idea of an LVT) that was simply a matter of disagreement rather than misunderstanding, much in the same way you and I disagree with what amount of tax the rich should pay, neither of us misunderstands the tax system there, we just differ in opinion. The fact is that those with more land will feel a GRT more, it's largely progressive, and whilst that is one of it's virtues, I think when you whack the rate up that high it's going to become a lot more of a burden to landowners with very large amounts of land, farmers as an example. It won't affect their behaviors in the same way other property taxes would (it doesn't provide an disincentives for property improvement for example since it's based on the value of ground rents of the land as though it were unimproved) and thus there's no real way of it affecting output (which I believe was J&T's point) but my belief is that it will affect how much those people have to spend and would take about 170 bn extra out of the economy (559bn * (85/100-54/100)), which in my opinion will indirectly have the exact same effect as any tax rise would. The tax itself doesn't directly affect output like the other taxes we have do, it's a lovely tax, but it is wrong in my belief to deny that it would have indirect negative impacts because the way I see it is that when people keep less of their money they have less to spend and the economy will suffer. The economy is only as prosperous as the people who support it, and those people are consumers, and those very same consumers live on land too. There are lots of variables to analyse with tax and how it affects what people do, but my point was that such a high amount being taken out of the economy would definitely have an effect, a bad one at that. I'm fine to see the GRT rise a bit but not that high.

This is a bit muddled. When government raises revenue, it does not just remove it from the economy. It spends it. It's not the process of revenue being raised that damages activity - look at it this way. If we raise £200bn with an income tax rate of 40%, but then come down on the other side of the laffer curve and only raise £150bn. In one case we have 'taken £200bn from the economy' and in the latter we've 'taken £150bn from the economy'. But the act of raising revenue is not the taking of money from the economy, since we'd both agree that a 60% income tax rate is more damaging than a 40% one to output, right?

So, why do higher taxes damage the economy? It's because in the process of raising money nearly all of them cause a decrease in activity - be it through stopping some mutually beneficial trades, to change people's decisions into not working or working less and so forth. The GRT doesn't (and can't) do this. Hence it doesn't damage economic activity.

[jesusandtequila]

(Original post by Jarred)
I'd be happy to help with that. Though I wonder if it'd be better as an "article" if that's the right technical term, in the same league as the Constitution and the Guidance Document?

Perhaps.

Time for a House-wide thread, me thinks.

[Rakas21]

(Original post by jesusandtequila)
Perhaps.

Time for a House-wide thread, me thinks.

Count me in.

[Jarred]

(Original post by jesusandtequila)
This is a bit muddled. When government raises revenue, it does not just remove it from the economy. It spends it.

Certainly the government spends it, but is that what you want? Taking 170bn out of the people's pockets and letting the government spend it as opposed to those people who earnt it? Is that not kind of increasing the government's stake and part that it plays in the economy as a whole? Is that not thus the opposite of the economic liberty that both you and I as capitalists strive for?

It's not the process of revenue being raised that damages activity - look at it this way. If we raise £200bn with an income tax rate of 40%, but then come down on the other side of the laffer curve and only raise £150bn. In one case we have 'taken £200bn from the economy' and in the latter we've 'taken £150bn from the economy'. But the act of raising revenue is not the taking of money from the economy, since we'd both agree that a 60% income tax rate is more damaging than a 40% one to output, right?

Yeah I agree with that. But naturally there are many variables to look at in deciding how a tax change affects the economy. I'll agree with you that increasing revenues ie taking more out of the economy is not necesarily always going to increase damage on its own, and I accept your given example. However, a lot of the time, taking more out of the economy is going to be damaging because of a severe number of indirect effects that a higher tax will have. Let's take a look at just one - the impact on the consumer. Consumers are obviously very important, if no-one's buying anything then we're all hosed economically speaking. We need them spending their money and as far as I'm concerned the more they spend the better. So what does the GRT have to do with it? Well, everyone in society uses land in some way right? Either living on it or running a business from it, thus they will pay some GRT. Most, if not all of the people paying GRT are consumers in some shape or form. If you're taking more of their money from them, even if its through an LVT, they're going to have less money to spend than they used to. A rise to 85% will hurt a lot of these people's disposable income considerably, it gives them less to spend - and it is that which results in less money being put into the economy. I'm just gonna make up some numbers here, let's assume someone lives alone and pays £250 IT and £500 GRT right now, that's £750 of tax, let's assume the amount they pay in other taxes is so small that we can ignore it so that we can look at IT and GRT in an isolated situation. If we abolish IT and whack up the GRT rate to 85%, they'll now be paying £787 per month. This person is worse off, and that is going to influence their behavior negatively, they'll be more cautious about their spending habits, right? If this is uniform, and everyone ends up being worse off, then it is this which will take the money out of the economy, and it is mainly that which I was speaking about earlier. GRT may not cause any direct faults even at a high rate, but it most certainly does cause faults indirectly when it lessens the amount that people have to spend and makes their lives that little bit tougher. Now you said the Government can spend this money which it is taking, and sure of course it can but I'd rather it was these people spending it rather than the Government, I trust myself to spend my own money more than I trust the Government to do so.

So, why do higher taxes damage the economy? It's because in the process of raising money nearly all of them cause a decrease in activity - be it through stopping some mutually beneficial trades, to change people's decisions into not working or working less and so forth. The GRT doesn't (and can't) do this. Hence it doesn't damage economic activity.

True, I agree with you there but think it's just one side of the story and that it is perhaps naive (for lack of a better term) to say that this is the only way in which higher taxes damage the economy. Certainly the GRT is preferable to an IT simply because it has no real way of distorting behaviors in a negative way, and that's why I am in favour of shifting taxation more towards the GRT than IT, but think that 85% is way too high. I think the GRT should be used to supplement the current TSR system by making up the main bulk of it, but not entirely replacing it.

[JPKC]

Liber response to the arguments raised in this, please.

[Pastaferian]

(Original post by internetguru)
The problem is the majority of the MPs in the house are idiots [...]

This reminds me of my favourite political quote. Speaking from the opposition front bench, Disraeli said "And moreover Mr Speaker, half the Cabinet are donkeys". The Speaker asked him to withdraw this remark, and he responded "My apologies Mr Speaker, half the Cabinet are not donkeys".

[internetguru]

(Original post by JPKC)


Liber response to the arguments raised in this, please.

What I got from that video was stop paying for stuff and they do it more often and for free. Therefore we should stop paying all public sector workers because they will just do it for free.

[D.R.E]

(Original post by JPKC)


Liber response to the arguments raised in this, please.

Yawn. His entire argument is littered subjective value judgements: he talks of things being 'intrinsic', 'right or wrong' as if he's developed some thorough explanation instead of pulling these things out of his nether regions. Boring!

[Rhadamanthus]

(Original post by JPKC)


Liber response to the arguments raised in this, please.

Michael Sandel is so boring. You can tell he's straight out of the late twentieth century school. Everyone knows that the incentive in his example didn't work because Israelis are surly, boorish people who don't like silly rules.

[Melancholy]

(Original post by internetguru)
What I got from that video was stop paying for stuff and they do it more often and for free. Therefore we should stop paying all public sector workers because they will just do it for free.

I think this is a misinterpretation of Sandel's argument. I don't see how it follows from anything that he says that "if X is non-paid to do Y, then X is more motivated to do Y", and to portray his argument as such is intellectually lazy, dishonest and simply uncharitable.

(Original post by DRE)
Yawn. His entire argument is littered subjective value judgements: he talks of things being 'intrinsic', 'right or wrong' as if he's developed some thorough explanation instead of pulling these things out of his nether regions. Boring!

Sandel's use of the word 'intrinsic' does not signify a subjective value. It's an empirical thesis about what most humans naturally feel - a naturally felt incentive. An intrinsic incentive to read. And his argument does not need to assume that everybody feels that feeling. His argument is that an economic incentive does not necessarily amplify an intrinsic incentive, and indeed it can diminish what was, originally, a naturally occurring incentive, thus disrupting/killing off the natural incentive that was originally intrinsically felt. The monetary incentive has the capacity to undermine the intrinsic one, and that cheaper incentive structure may be irreplaceable and lost when the market mechanism becomes the normal incentive mechanism.

And since the heart of his argument is an empirical thesis, he uses an example. And indeed, it seems quite plausible that his simple point is in many circumstances true. This, on its own, however, shouldn't threaten a Libertarian.

Even if Sandel's argument was hugely value laden (which I maintain I highly doubt, despite the topic that he's dealing with [markets corrupting values] which makes it a bit deceptive), the Libertarian is equally value laden when he/she prioritises certain values (such as the natural rights of man not to be sold by others). You still have strong values even if your list of values is narrow in extent.

This all said, Michael Sandel is a hugely overrated philosopher who, himself, misreads various contemporary political philosophers (largely liberal, rights-based philosophers). He's also does hold a lot value-laden assumption when arguing for his wider communitarian political philosophy (prioritising the 'good' over the 'right'), but his general argument here is limited in scope and does not necessitate the assumption of particular values. At least as far as I understand his argument here.

The spirit of his argument is: "markets* can tamper with incentive structures and intrinsically motivating values; if you deem these values to be important, then be careful with markets". A market society, unlike a market economy, is where most values are dictated by markets. Sandel is simply identifying a consequence of a market society.

And of course markets are passive and don't really do anything, but it should be common sense that 'markets' is used for shorthand as the legal status quo insofar as free legal trading is concerned - i.e. the act of not having restrictive laws, which permits the use of monetary incentives, can tamper with other natural incentive structures.

[chrisawhitmore]

(Original post by JPKC)


Liber response to the arguments raised in this, please.

His real world example simply showed an evolution of a service to better fit the customer, while ensuring that it remained profitable for that improvement to occur. Basically, there was a need for longer childcare, the centre begun to charge for that need, allowing it to become part of the normal operation. The service adapted to fit the needs of the consumers. Good.

[paperclip]

(Original post by internetguru)
What I got from that video was stop paying for stuff and they do it more often and for free. Therefore we should stop paying all public sector workers because they will just do it for free.

Not quite. The wording of that argument struck me as one based on psychology, http://youarenotsosmart.com/2011/12/...cation-effect/

(Original post by Melancholy)
snip

Given your comments, just thought you would find the above interesting

[Melancholy]

"Tom said to himself that it was not such a hollow world, after all. He had discovered a great law of human action, without knowing it – namely, that in order to make a man or a boy covet a thing, it is only necessary to make the thing difficult to attain. If he had been a great and wise philosopher, like the writer of this book, he would now have comprehended that Work consists of whatever a body is obliged to do, and that Play consists of whatever a body is not obliged to do. And this would help him to understand why constructing artificial flowers or performing on a tread-mill is work, while rolling ten-pins or climbing Mont Blanc is only amusement. There are wealthy gentlemen in England who drive four-horse passenger-coaches twenty or thirty miles on a daily line, in the summer, because the privilege costs them considerable money; but if they were offered wages for the service, that would turn it into work and then they would resign."

Chapter Two, The Adventures of Tom Sawyer by Mark Twain.