the thought gang

an attempted place

Month: January, 2014

Almost Accidentally Useful

The way to deal with falling social mobility is to bring down the quality of good schools by levying a tax on them, apparently.

Longrider points out the first thing that sprang to my mind:

And what does Dr Seldon think that progressive taxation actually does? Oh, yeah, it means that the more wealthy you are, the more taxes you pay

This is true, but the point of ‘progressive’ taxation is that those with more pay more, but we all get the same out. After all, if paying more tax entitles one to better services, then what’s progressive about it? (I should note, at this point, how much I despise use of the word ‘progressive’ in this context.. but that’s for another day.)

Anyway, the tax system is not how people pay to send their offspring to good state schools. It’s the property market that does that. People pay more for homes near good schools. I’ve seen maths, even, showing near-perfect correlations between the premium paid to live near certain schools, and the concurrent implied ‘saving’ on private schooling fees.

So would Dr Seldon’s daft plan have an unintended, but beneficial, consequence? Would it remove the school premium from the price of land? Would it appropriate the gain in house values from proximity to a good school for the state (which, after all, runs the school) instead of it going to the landowner? Would it remove the problem that us childless have if we want to live in those nice areas that have good schools.. namely that we have to pay the school premium too? In the long run, will those middle class patents asked to pay a free be no better or worse off, because their housing cost will fall to cover the fees (or, at least, 2.4 children’s worth).

There is little I’ve heard of Dr Seldon’s proposals that it intentionally right. Most crucially, it is oblivious to the fact that the main reason good schools are good is that good parents send good children to them.

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Thoughts on morality and wealth tax

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So I’m trying to work out if I agree with Frances or not.

I try not to be someone who thinks the world should be ordered in a manner that is convenient to me, so I argue with myself about the idea that wealth taxes like LVT and Inheritance* tax should be phased in/up to enable income taxes to be lower. I pay a relatively high level of income tax, and I neither own any property nor have any prospect of benefitting from a useful inheritance – so of course I think this way!

However, I aspire towards having the sorts of wealth that should be taxed. Notably, I intend to own property – that I don’t is a matter of choice, not affordability. In fact, I not only aspire to own somewhere nice to live, I aspire to have it entirely bought and paid for by the time I’m 40 so that I can live a life unencumbered by mortgage debt. I would like the option to move to a less financially attractive career, knowing that I can enjoy the property fruits of my previous efforts. In doing so I would also, as a by product, move to paying less tax.

LVT, therefore, puts a spanner in my life plan. Even if my property is bought and paid for, I must continue to pay my tax at a level commensurate with the property I bought with my income from more lucrative times. This is a feature, not a bug, of LVT. This is an inconvenience for someone with my particular plan, and it’s not an inconsiderable one. I would place significant value on the freedom to earn less money, doing something I find more rewarding.

But is this a moral issue? Is it immoral to prevent us from being free to pay less tax – albeit it’s a ‘soft’ prevention, in that we always retain the right to move somewhere without the LVT burden. We are currently taxed on things we do actively, but LVT is close to being a tax on existing. Someone who retires to a smallholding to live off the land, as removed from society as he is able, is still subject to LVT.

I think that my conclusion is that the tax itself is not immoral, but the implementation of it could be. The blindingly obvious solution to the ‘poor widows in mansions‘ objection is to allow LVT to be rolled up and paid on death. Why not the same for non-widows unable to meet their obligations from cash-flow? Even our man on his smallholding is a beneficiary of the state which enforces his property rights. Further, LVT combined with a Citizens Income ensures that all who pay LVT are also recipients of some of the proceeds, even though they may not cover the whole LVT bill (and if I personally wish to own an ‘above average’ property, we should assume that it will not cover all of mine).

We might also consider the moral dilemma of a transition from one mode of taxation to another. LVT is about replacing some of the rent collected by banks in the form of interest, with a rent paid to the society which gives the land it’s value. Those rents to banks are a sunk cost for all who’ve bought their property already – especially (in materiality terms) those of my generation who bought in the current century. A moral tax can have an immoral impact if it is disproportionately disadvantageous to people who just happened to be born in the wrong decade. If I were burdened with the high income taxes as I accumulated the money to buy property, then the high private rents to my bank, and then the LVT on top. then I might reasonably question the morality of that.

* I often hear IHT called a wealth tax, but I don’t personally see it as one. The person with the wealth is dead. It’s an income tax on the beneficiaries – and, with allowances for spouses and children, I would tax it as income.

Pragmatism, not Idealism

Why does the left ignore the true progressive party – the Greens?

.. asks The Guardian

Is it because most of ‘the left’ is only interested in hating the tories and, thus, pragmatically, throws all support behind the only party with a chance of beating them – even though that party offers nothing different? Isn’t it fun that tory voters have strong enough convictions about certain issues to risk a Labour government by voting Ukip, but Labour voters daren’t do similar*? Isn’t it even more fun that Ukip support is credited with dragging the tories further to the right on issues like immigration, but whilst Labour voters complain that Labour won’t move to the left, they sit back and watch it move in the same direction as the opposition because their only electoral strategy is to be ‘not the tories’.?

The Greens are on board with some things that I agree with (Citizens Income, for a start) and I’m in favour of minority parties crashing the cartel whatever they believe in. Unfortunately, their core aim is to regulate most of us to the agrarian age, so I’m not sure they have all the answers. However, they are prepared to challenge the mainstream centrist corpratist alliance and ‘the left’ should walk away from this bitter (and phoney) war with the tories and embrace real alternatives.

* Excluding, of course, the traditional Labour voters who vote for anti-immigration tickets. Because we’re not supposed to talk about that.

That Cameron PR stunt thing..

There’s been a twitstorm.

In summary, DCam did a photo-op to show how brilliant ‘help to buy’ is, and a blogger thought it smelled a bit fishy, did a bit of digging through social media, and showed that the whole thing was a bit of a sham as the poor single mother that DCam was parading about with was a married high powered BMW-toting ‘we-are-the-1%’ company director. HA! GOT YOU, DAVE!

Except that nobody was fact-checking the fact-checker.. and it was a load of rubbish. The woman in the article, having already had to put up with David Fucking Cameron coming to her house, then had to deal with a mob abusing her on twitter, her personal details and relationship history going viral, and being called a liar.

It was a bad piece of detective work by the blogger, and even though this has been pointed out by lots of people, and even though some of those who were spreading the muck have issued the due mea culpa’s, the original blogger (who enjoys the anonymity that the target of his piece does not) has not backed down or apologised. The owner/admin of the site isn’t much interested in correcting matters either:

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I’ve been in the comments at the original piece, and those of us trying to get some admission of error are just being accused of sock puppetry, and the ‘owner’ is trying to say that the piece was never about the homebuyer anyway, it was about Cameron and ‘help to buy’. I’m not sure why a piece about the Prime Minister and a flagship government policy needs details of when a single mother from Southampton last tweeted about decorating.

It did not take a lot of brain engagement to realise that the blog might not have hit the mark. A huge assumption was made based on the job title of the woman, and anyone who understands how job titles work these days (or, even, read the linkedin profile that the blogger published, which clearly listed her duties, which were clearly not the duties of a ‘director’ in the traditional sense) would have known that she’s probably not the fat-cat that the blogger assumed. From that false foundation, the blogger just went looking for dirt and, crucially, never bothered to ask the woman for comment. Whilst I don’t have any evidence for it, it’s hard not to assume that the blogger would be aghast if the Murdoch media were so cavalier. I wonder how many of the people who retweeted the article actually read it? How many of those engaged any scepticism when doing so?

The blogger probably thinks that he is ‘better’ than those nasty right-wingers who knowingly spread lies and half-truths about single mothers in order to fit their agenda, and who never seem to admit their mistakes, or give due prominence to their corrections. He’s exactly the same.

It’s always nice…

.. when someone else articulates something, so you don’t have to…

The slaughter of tens of thousands for the gains of a few feet of no man’s land was not worth the sacrifice. It was an appalling waste of life and should be remembered as such.