Titled Capital in the 21st Century, the book by French economic historian Thomas Piketty is a versatile and useful tome. Author Thomas Piketty came to pay his inaugural visit to Beirut and a repeat visit to Cairo last month as part of a promotional tour for his book’s Arabic translation, available in soft cover but with the same distinctive look as the English-language hardcover edition that became such a surprise bestseller. He noted in numerous presentations and interviews during his tour (as he had said already in interviews in previous years) that the Middle East is probably the world region with the greatest economic inequality and that the deficiencies in data collection and verification make this region difficult to assess from the point of view of an economic historian. Executive sat down with Thomas Piketty on the occasion of his visit – which unexpectedly entailed three lectures in a single
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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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.
Comments are closed.