2 thoughts on “Six policies Prime Minister May should embrace to revitalise growth”

  1. Posted 12/07/2016 at 13:22 | Permalink

    OMG sensible policies. I do hope you write to Mrs May regarding this.

  2. Posted 14/07/2016 at 11:03 | Permalink

    1. Because it is fixed into bands, the incidence of Council Tax falls almost entirely onto land, making it the most efficient tax we have in the UK. While a tax on imputed rent would be more progressive, unless it is structured correctly it will also tax capital improvements. Far better a tax on imputed land rents, which would be even more “progressive”.

    It would therefore be best to modify Council Tax to make it reflect the underlying rental value of land. Quite simple to do in practice.

    Why stop at scrapping SDLT or CGT? Land rents can get rid of around £250bn of bad taxes right now, increasing as land rents absorb increases in the discretionary incomes of renters.

    2. High Corp Tax and low sales taxes seem to be of more benefit than the other way around ie North America vs Europe. It would be better to have one flat tax on all income/profit, whether that is from individuals or firms. Consumption/production/sales are the very life of an economy. If economists think taxing that is less harmful they may well have got another “theory” completely wrong.

    3. Planning is not to blame for affordability issues regarding housing for large parts of our society. Ryan Bourne’s colleague Dr Andrew Lilico showed we do not have a physical shortage of housing in the UK.

    http://capx.co/there-is-no-uk-

    What we do have is high demand for locations with the better wages and amenities. This is made worse by a tax system that massively distorts the economy in favour of London/SE by taxing wealth creation rather than using land rents as public revenue. Because of this, regions outside London/SE are currently overtaxed by around £100bn per year.

    A 100% tax on the rental value of land would reduce the selling price of an average UK home from £260K to £100K, meaning new buyers saving around £9K on mortgage interest on a property of that value.

    The redistributional effects in individuals would result in disposable income for typical working households rising by around £10K per year, making housing for both owner occupiers and renters 3-4 times more affordable as ratios of discretionary incomes.

    4. Totally agree. It’s not that Cap and Trade is less efficient, in theory its better. Only in practice it is a vehicle for rent extraction, fraud and bureaucracy.

    All costs for all energy sources should be internalized, and all subsidies ended. For fossil fuels a straight up carbon tax does the trick nicely.

    5. Ending agricultural subsidies would certainly be beneficial. We could also scrap foreign aid as a result. Countries (like regions outside London in the UK) just need a level playing field, the best hand up we can give.

    6. We could do with a radical simplification of our tax code and by shifting taxes off wealth creation, as the deadweight losses we suffer from this are truly massive.

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