The Tax Collectors Alliance recently invented, or resurected like a zombie, the term "Dry Taxes". Its a pearler.
It suggests that assets that are not liquid should not be taxed because that is unfair to the asset owner, particularly if their liquid income is low. This great theory is based on, and cooperates with, another beauty - ability to pay.
The asset rich and cash poor, ahhhh, poor things. Clearly its unfair if by producing nothing useful for society but receiving huge unearned incomes, they should be taxed right?
So we must tax the more liquid earnings of labour and capital even more instead. That is, the hard work, skill and enterprise of the producer of goods and services. Not the owners of land and property who do no work for that part of their income. That's fair isn't it?
Yet if we take some time to think carefully about this we can see that the ONLY assets that are liquid are the results of work and capital investment - wages, salaries, capital yields. And the ONLY things that are not liquid are land assets and other monopoly profits.
This pearl of wisdom must surely go down in the economics hall of fame. Here is why:
How about we ask owners of property in Mayfair and Chelsea why I can't afford to rent or buy a house there? Seems like landlords and sellers there are not considering my ability to pay! *
Either the Tax Payers Alliance know all this and are deliberately protecting the parasites of society. Or they do not understand the fundamental nature of taxation, which would be quite a surprise given their title.
Then again we get the same pearls of wisdom from the Tax inJustice Network too. Both institutions seem to really badly want high taxation and high property prices. Neither seem to want high wages and high returns to capital investment instead. What does this observed fact tell us?
I spoke in person to their leader several years ago, a jolly nice bloke, and his chief economist, explaining this all to them very gracefully and clearly. The latter called me a commie in a fit of rage and packed us off in a big hurry.
Always a tell tale sign I've hit the spot. A lifetime invested in the wrong idea. Their funders would fire them for even thinking about this.
* Thanks to KJ for this Killer Argument...
