An Inconvenient Tax

There seems to be a new film about the income tax. I’ve looked at its website, and the list of contributors. Among them, there don’t seem to be any who seem likely to have breathed a mention of what I think is the only logical, just, fair, efficient revenue base: the value of nonrenewable natural resources and the land within our borders.

Apparently they are content to permit those values to be privatized by those who hold title to them.

It is difficult to fault anyone for not considering an idea to which they’ve not been exposed, but no examination of taxation can be considered particularly useful (to the vast majority of us – I’m not speaking of the elite wealthholders, the 10% who have over 72% of net worth – yes, 72% – see http://lvtfan.typepad.com/lvtfans_blog/2010/04/americas-wealth-distribution-2007-wealth-concentration-part-1-of-3.html, below, which shows this same 10% has 41% of the income) without considering:

  • the justness of each tax base;
  • the efficiency of same;
  • the incentives – perverse and desirable;
  • the administrability of each tax base.

I wonder which of the film’s experts provide the viewer with some basic familiarity with Adam Smith’s “canons of taxation.” And I’m referring to the classical economist Adam Smith, author of The Wealth of Nations, not the fellow who writes on economics under his name.

Henry George expressed it this way:

The increasing need for public revenues with social advance, being a natural, God-ordained need, there must be a right way of raising them — some way that we can truly say is the way intended by God. It is clear that this right way of raising public revenues must accord with the moral law.Hence:It must not take from individuals what rightfully belongs to individuals.It must not give some an advantage over others, as by increasing the prices of what some have to sell and others must buy.It must not lead men into temptation, by requiring trivial oaths, by making it profitable to lie, to swear falsely, to bribe or to take bribes.It must not confuse the distinctions of right and wrong, and weaken the sanctions of religion and the state by creating crimes that are not sins, and punishing men for doing what in itself they have an undoubted right to do.It must not repress industry. It must not check commerce. It must not punish thrift. It must offer no impediment to the largest production and the fairest division of wealth.

I’ll bet that “An Inconvenient Tax” doesn’t spend much time on these issues. But I could be wrong.

Readers of this blog will know that I am not a fan of the income tax. But the other solutions commonly proposed are little better.

What’s better? Read Fred Foldvary’s The Ultimate Tax Reform for starters.