“If science is defined by its ability to forecast the future, the failure of much of the economics profession to see the crisis coming should be a cause for great concern”
Governments still rely on economists steeped in orthodox thinking for advice. If things are to change, a clearer understanding of how the economy works is needed, not just by economists and policy-makers, but also by the wider general public – a voter who votes in ignorance forges the chains that bind him. Economists have erected round their subject an intimidating barrier of jargon and maths, but this site and the books in our catalogue are intended to give the layman, the voter, a grasp of the basic principles.
Anthony Werner, Publisher
Governments around the world are wrestling with the problems of enormous debts, low growth, high unemployment and a gap between the demands of public expenditure and what can be raised through taxation. This problem has been acute since the financial crisis, but has been a hallmark of western economies for decades.
ISBN 9780856835070 | Price: £14.95
The case for taxing land has been raised in a number of articles recently. For example, The Economist leader (4th April) argued that ‘governments should impose higher taxes on the value of land’, pointing out that ‘land taxes are efficient’ and ‘difficult to dodge’. It also noted the important distinction between property taxes, such as the Council Tax, which values the building and the land on which it stands, whereas a land-value tax values the land only. The former discourages investment because it would push up the tax payable. A land-value tax does not have that negative effect, on the contrary a land-value tax ‘creates an incentive to develop unused sites’. A land-value tax is also a means of automatically recovering for the public purse expenditure on infrastructure through the uplift in land values consequent upon the investment.
In the June issue of Prospect, Philip Collins argues that ‘the UK taxes labour and endeavour too much, and labour and property too little’. He suggests that ‘the compulsory seizure of money [by the taxman] deserves a more principled defence … The best principle for taxation can be found in Herbert Asquith’s Budget of 1907’ which were then ‘embodied in David Lloyd George’s “People’s Budget” of 1909’. He concludes that this shift is ‘no small measure, either. A tax of 1 per cent on the £5tn of British land would raise £50bn. That would be enough to cut income tax by a third or abolish corporation tax entirely.’
The term ‘land’ to most people tends to convey the idea of green fields, but the authors of Our Land, Our Rent, Our Jobs point out that a land-value tax would raise far more revenue from urban than rural land (a square metre of land in the financial centre of Johannesburg is worth about one million times more than a square metre of the poorest grazing land). Thus, the burden of current taxation would be lifted off rural areas, making these sub-marginal areas viable again, reducing the pressure to migrate to the shanty towns of the big cities in search of work.
The high concentration of land ownership in the hands of the white population, who now comprise less than 10% of the population, is a sensitive political issue, but the concentration of landownership is not confined to South Africa. The New Statesman (24th June) pointed out that ‘with the exception of Spain, Britain has the most unequal concentration of land ownership in Europe … 69% of the 60 million acres in the UK are owned by 0.6% of the population’. The article points out that the Scottish National Party has resurrected the issue of land reform and urges the other political parties to do so as well. ‘In 2010, when he first stood for the Labour leadership, Andy Burham advocated a land value tax and the Liberal Democrats proposed the same in their general election manifesto. As both parties seek to resolve their crises, they should make land reform a defining cause once again.’ Read full article.
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“How do 52 million South Africans share equitably in their 122 million hectares, especially when those hectares vary so enormously in value?” asks the Johannesburg Star.
The danger of not getting the answer right was revealed in the Mail and Guardian in an open letter to Richard Branson from Andile Mngxitama, the Economic Freedom Fighters’ (EFF’s) commissar for land and agrarian revolution. He accuses Branson of having bought stolen property: “The consequence of your witting or unwitting participation in this illegal transaction is that the EFF policy of land expropriation without compensation may, in the near future, affect your investment adversely”. Read the full article here.
In their new book, Our Land, Our Rent, Our Jobs, Stephen Meintjes and the late Michael Jacques show how a reform of taxation can lead to a more equitable distribution of land, while at the same time stimulating the economy and job growth.
As the veteran anti-apartheid campaigner, Peter Hain, comments, it provides “Lateral ideas on tax raising to generate social justice for all South Africans whilst maintaining international investor confidence”.
In the Foreword, Nobantu Mbeki writes “This book is, in a sense, immediate and topical and in another, universal and timeless”.
Our Land, Our Rent, Our Jobs will be published in July 2015.
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