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Source link: http://archive.mises.org/4907/flat-tax-folly/

Flat Tax Folly

April 14, 2006 by

Steve Forbes’s plan for a flat tax seems good, writes, Laurence Vance. But there are major problems, among which that it will raise many taxes. Deductions, exemptions, credits, shelters, and loopholes all accomplish the same thing; albeit in different ways: they allow people to keep more of their money. Those would be gone under his proposal, and we would experience no increased freedom. The government wins, and we lose. FULL ARTICLE

{ 79 comments }

BillG (not Gates) April 17, 2006 at 11:38 am

George Gaskell wrote:

“The fact that all useful things are already owned by others before you arrived on earth doesn’t change anything. Land is no different from every other useful object in that regard.”

BillG reponds:

the it is not logical possible for libertarians to have as your fundamental tenet the right (not having to be purchased or gifted) of self-ownership.

land IS fundamentally different then every other useful object (along with other aspects of the natural commons) because you literally can not exist with occupying some space somewhere…there is no “useful” chice in the matter.

whereas most food (some grows wild in nature) is created via human labor land itself is not.

Paul Edwards April 17, 2006 at 12:33 pm

“Collective entities of all kinds are nothing but a pretense of authority, a form of supposed immunity from the normal rules of peaceful behavior.”

Bang on. Want to commit a crime and get accolades for it (or at least not go to jail)? Get into politics or state administration. You can steal and maybe even initiate a murder, and some people will even respect you for it. Where can you get a gig like that as a private citizen in the free market?

M E Hoffer April 17, 2006 at 1:18 pm

Isn’t all this energy expended discussing tax reform akin to “hacking at the branches” ?

Don’t we have a much more fundamental blight plaguing our productivity, that being the nature of our currency and its progenitor?

To the root is the cure, no?

R.P. McCosker April 17, 2006 at 1:30 pm

I want to take Cornelius van Vorst’s sage advice to ignore BillG’s detours from this thread, but I can’t resist noting George Gaskell’s comment:

“I have no idea how BillG can justify land taxes with the idea that he has to be somewhere. Well, you have to eat, too. You aren’t born with any food, either. Everything you eat has to belong to someone, too. To survive, you must obtain that food from the owner either by gift (e.g., a parent), or by earning it by trading something valuable for it on a mutually voluntary basis. All else is theft.”

Indeed, to be intellectually consistent, Georgists should declare that all food is held in common, and all people should pay rent to the government — er, *the owners in common* — for the possession and consumption thereof. How unfair that each individual doesn’t hold an in-common share of the foodstuffs of the world so essential to survival!

But why stop there? Nonsense is obviously essential to very identity of Georgists. Georgists should own all nonsense in common. For example, when somebody reads a nonsense poem by Lewis Carroll (say, “The Walrus and the Carpenter”), he should be forced to send an appropriate payment to the Nonsense In Common fund administered on behalf of the collective interests of all Georgists. BillG and his fellows are entitled, after all, to what’s collectively theirs.

BillG (not Gates) April 17, 2006 at 2:05 pm

RP wrote:

“Georgists should declare that all food is held in common”

BillG responds:

food is created via individual labor whereas land is not.

if you had direct access to the earth you could attempt to sustain oneself via your own labor.

you can’t labor to produce a location for yourself…

George Gaskell April 17, 2006 at 2:22 pm

if you had direct access to the earth you could attempt to sustain oneself via your own labor

No, you couldn’t.

Well, you could attempt it, but you’d die within a week or so.

BillG (not Gates) April 17, 2006 at 2:26 pm

George Gaskell wrote:

“No, you couldn’t.

Well, you could attempt it, but you’d die within a week or so. ”

BillG responds:

did our ancesters not survive?

if you had direct access to the earth itself you could freely trade your labor products for the labor products of others…

George Gaskell April 17, 2006 at 3:01 pm

did our ancesters not survive?

At the time our ancestors were building the civilization into which you were born, most of Europe was unoccupied.

Even as late as the time of the founding of the Cistercian monastic order (12th century), these men had plenty of work to do clearing unoccupied land, draining swamps, and (over the course of centuries) bringing that land into cultivation that had been unoccupied since the dawn of time. It was unclaimed, unowned and unused, because it was relatively uneconomic to do so. This is in the heart of what is modern day France. These organizations still own these lands to this day because they did the work of making it useful, as opposed to its natural state.

This happened then, but could not happen now, because of the rise of nation-states that have claimed territory that pretty much covers all of the earth. Were it not for them, you could go out to the large swaths of unoccupied “government-owned” land that still exist today, even in this 21st century with a human population of over 6 billion, and hack your livelihood out of the wilderness, were it not for the fact that some government somewhere claims the power to have you jailed or killed for attempting to do so.

So, yet again, government is the source of this problem (the lack of available land to on which to sustain yourself without trespassing). You are attempting to solve it by justifying the existence of government, and looking for new and better ways to help fund it.

BillG (not Gates) April 17, 2006 at 3:42 pm

George Gaskell wrote:

“So, yet again, government is the source of this problem (the lack of available land to on which to sustain yourself without trespassing). You are attempting to solve it by justifying the existence of government, and looking for new and better ways to help fund it.”

BillG responds:

it depends on what “problem” one is trying to address….

the source of the problem I am addressing is government granted privilege of the landowner’s monopolizing the economic rent at the expense of labor-based property rights of those being excluded.

if you make property rights to labor absolute then you must make property rights to land conditional beyond Locke’s proviso if you at all interested in the concept of equal liberty which provides the greatest amount of freedom for the greatest number of people.

George Gaskell April 17, 2006 at 3:50 pm

I am only addressing the “problem” you have presented.

the landowner’s monopolizing the economic rent at the expense of labor-based property rights of those being excluded

You can keep saying the same thing over and over, but it doesn’t mean that you are making an argument.

Also, you cannot expect to throw around a few scary terms like “monopoly” and expect them to carry the day for you. There is no land monopoly by a landowner, any more than I am the one monopolizing my car.

BillG (not Gates) April 17, 2006 at 4:20 pm

George Gaskell wrote:

“There is no land monopoly by a landowner, any more than I am the one monopolizing my car.”

BillG responds:

sorry that should have been landowners’ not landowner’s…I am referring to landowners as an economic class.

George Gaskell April 17, 2006 at 7:23 pm

I am referring to landowners as an economic class

That’s even worse. Economic classes do not exist. They are a fiction invented by people who design such concepts in order to justify the use of aggression, the most prominent proponent of the “economic class” idea, of course, being Karl Marx himself. They have no relevance in describing economic systems or processes.

Furthermore, private monopolies simply do not exist. The individual members, without resort to the kind of coercion that only the state can provide, always compete with one another, thus breaking any attempted cartel agreements. No one has ever been able to point to a single example of a monopoly that was not the creation of a government.

Mark April 17, 2006 at 7:37 pm

Forbes is another in a long line of wingnuts with more money than sense. His plan will not reduce governnment, but it may save people with complcated tax returns some time. Big deal!

I suggest a true flat tax. A head tax of $60 or so per person. This would provide the Feds with the same inflation adjusted revenue thay had in 1800.

BillG (not Gates) April 17, 2006 at 7:37 pm

George Gaskell wrote:

“No one has ever been able to point to a single example of a monopoly that was not the creation of a government.”

BillG responds:

no argument there…government granted privilege creates the landowners’ monopolization of the economic rent at the expense of the excluded’s labor-based property rights thus denying the right of self-ownership.

George Gaskell April 18, 2006 at 8:01 am

government granted privilege creates the landowners’ monopolization of the economic rent

As I have already explained, there is no monopoly, nor is there even a cartel, in this situation. Therefore, this proposition, which you seem to feel will become more persuasive the more often you repeat it, is based on false assumptions. Your conclusion must therefore be false as well.

billwald April 18, 2006 at 11:49 am

“Economic classes do not exist.”

Then what classes do exist?

BillG (not Gates) April 18, 2006 at 11:57 am

George Gaskell wrote:

“As I have already explained, there is no monopoly, nor is there even a cartel, in this situation”

BillG responds:

what you explained is that no one landowner has a monopoly on land…and I agree but that is not my claim.

I am claiming that our laws codify that the landowner is the rightful owner of the economic rent thus have been granted a monopoly by the state on this bundled right of land ownership to the detriment of the superior property rights claim to the fruits of one’s labor of those been excluded.

do you deny that the landowners as a class are entitled to the economic rent backed by the force of the state thus have a monopoly on this bundled right?

George Gaskell April 18, 2006 at 12:21 pm

do you deny that the landowners as a class are entitled to the economic rent backed by the force of the state thus have a monopoly on this bundled right?

There are so many errors in this statement, I don’t know where to begin.

First, landowners are not a class. The term ‘class’ has a very specific meaning, derived largely from Marxist and related lines of thought, and it has no relevance or significance in explaining or analyzing actual economic behavior. It is a political or rhetorical term, not an economic or scientific one.

Second, I do not think that anything should be “backed by the state.” The modern notion of the nation-state is simply a concept that was invented and used to rationalize theft and violence. I reject all forms of collectivism across the board.

Third, as I will say for the third and final time, what you are describing is not a monopoly, even as you are misusing and abusing the term. A monopoly is where there is only one seller for a particular type of good. There are over a hundred million landowners in America, not to mention the entire world. They each act in their own interests, thus ending any monopoly-type behavior. The good in question is bought and sold all the time, more so in a free market than under any other type of system, thus ending any idea that there is an artificial barrier to entry or other kind of exclusionary cartel at work. It is therefore ridiculous to metaphorically collectivize them all into a single, giant mass of The Landowner Class in an attempt to justify your proposal to take some measure of value from them by force.

Fourth, as for “bundled rights,” I believe that ownership in fee simple ought to be recognized for the absolute right that it is (subject only to the non-aggression principles that are applicable to everyone in a civilized society, that one cannot use one’s land in a manner that harms others or their property). And, no, keeping what has voluntarily been given to you is not a form of “harm.”

George Gaskell April 18, 2006 at 12:29 pm

Then what classes do exist?

Only the ones rattling around in your mind.

Here are a few quotes by Mises himself for your consideration:

“On the market it is not mankind, the state, or the corporative unit that acts, but individual men.”

“Only the individual thinks. Only the individual reasons. Only the individual acts.”

“In the unhampered market economy there are no privileges, no protection of vested interests, no barriers preventing anybody from striving after any prize.”

“Entrance into the ranks of the entrepreneurs in a market society, not sabotaged by the interference of government or other agencies resorting to violence, is open to everybody.”

“Under capitalism, everybody is the architect of his own fortune.”

BillG (not Gates) April 18, 2006 at 12:54 pm

George Gaskell wrote:

“what you are describing is not a monopoly”

BillG responds

monopolization – to dominate by excluding others.

landowners are entitled to a legal and monetary claim on the wages of those they exclude violating their rights of self-ownership.

George Gaskell wrote:

“to justify your proposal to take some measure of value from them by force.”

BillG responds:

the force is justified to prevent a theft of the superior property rights claim of those being excluded.

George Gaskell wrote:

“keeping what has voluntarily been given to you is not a form of “harm.” ”

BillG responds:

there are no examples in the plant or animal world were force is not used initially to establish dominion over a specific territory or subsequently for continued dominion…in the case of humans, beyond Locke’s proviso as the very act of continued enclosure FORCES a legal and monetary obligation on those being excluded which can only be realized by violating their rights to the fruits of their labor.

George Gaskell April 18, 2006 at 1:14 pm

monopolization – to dominate by excluding others

Uh, no. A monopoly is a market for a certain good containing a single producer or seller.

As for the rest of your comments, you have memorized your catechism quite well. I lost count after you repeated it for the twelfth time.

I’d mention that repeating a proposition does not make it any more true than the first time you said it, but I would then be repeating myself.

BillG (not Gates) April 18, 2006 at 1:20 pm

George Gaskell wrote:

“A monopoly is a market for a certain good containing a single producer or seller.”

BillG responds:

mine was a dictionary definition too…

Person April 18, 2006 at 1:21 pm

I think the funniest thing is that Henry George’s only legacy in America is the income tax, which today is essentially a payroll tax totally unrelated to land ownership. Even the original income tax, which Georgists sunk ALL their clout into, only taxed *income* derived from land ownership, rather than land ownership itself, and that was only a small part of it. So, thanks to “anti-labor-tax” Henry George, today we have huge taxes on labor — and capital!

BillG (not Gates) April 18, 2006 at 2:32 pm

how perverse indeed!

could you cite a link to this information for me?

Person April 18, 2006 at 7:09 pm

BillG: I read that on the website of the Robert Schalkenbach foundation. See here

Relevant section: “A Georgist, Congressman Warren Worth Bailey of Pennsylvania, drafted the first Federal personal income tax law on Georgist lines: falling mainly on very high incomes from property. … The federal income tax, which once targeted unearned income from land, now devolves steadily into a payroll tax.” In case your question was partly grounded in disbelief, recall that the Robert Schalkenbach foundation is a Georgist organization, so you can trust them on this; if they want to take credit for the origin of the federal income tax, let them.

BillG (not Gates) April 18, 2006 at 7:43 pm

very interesting – than you!

Person April 18, 2006 at 8:19 pm

Huh? I thought you would get angry and try to deny the Georgists’ role in bringing about high taxes on labor and capital.

BillG (not Gates) April 18, 2006 at 10:09 pm

I am an ideologue but not a jerk about it…

Person April 18, 2006 at 10:30 pm

Oh, okay. My apologies then. Glad I could be of help.

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