
Thomas Schellen
Thomas Schellen is Executive's editor-at-large. He has been reporting on Middle Eastern business and economy for over 20 years. Send mail
Thomas Schellen is Executive's editor-at-large. He has been reporting on Middle Eastern business and economy for over 20 years. Send mail
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Pikettys comment regarding Land Taxes shows a breathtaking level of ignorance. Given the vast amount of data we have regarding selling prices and rents, it’s very easy to compare like for like building types in different locations to get the underlying site values. To a large extent this isn’t even important, as with the correct tax structure the incidence can be made to only fall on Land. For example because the Council Tax in the UK is fixed into bands, it acts as a lump sum tax attached to a title deed rather than an individual or firm.
The point is because land by value is more highly concentrated than income or capital, than any attempt to shift taxes way from produced factors on to land will reduce inequality. An imperfect Land Tax is still going to do the job better than a flat property tax, which is better than taxing sales or income.
And because a LVT is optimally efficient we not only get a more equal share of the cake, but the cake gets bigger too. A win-win.
I suspect Piketty really interested that the State owns a large part of what people have earned, rather than reducing inequality. That is, he is first and foremost a control freak.
So, of course he doesn’t like Land Taxes, as they produce fair property rights that not only reduces inequality, but turns our neo-feudal economic system into a true free market Capitalist one. Leading to a vastly shrunken State apparatus.
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