Wealth and Want
... because democracy alone is not enough to produce widely shared prosperity.
Home Essential Documents Themes All Documents Authors Glossary Links Contact Us


Tax Evasion

Our current system of taxes has led to a huge business in tax evasion. People pay hundreds of thousands of dollars to law firms and accountants for "opinions" that a particular tax shelter (with code names like Bart and Homer) are legal. Corporations shift mailboxes offshore and thereby avoid paying taxes on huge amounts of income, while their competitors are too honest to do so. Wealthy people pay others to find them loopholes, or, in the case of their elected representatives, to create loopholes.

Land, unlike income, is impossible to hide or to move offshore. Land is not driven away if we decide to tax its value, not one square inch. When we lower the tax on land value, we drive the price of land upwards, making it increasingly unaffordable (see California and Proposition 13). When we increase the tax on land value, we drive the price of land downwards, serving the triple goals of collecting tax revenue and making land affordable, while making it possible to lift taxes off wages and sales. Which of these goals doesn't serve the common good?

Karl Williams:  Social Justice In Australia: ADVANCED KIT

Unemployment for all
Not just the rich
    - (a protest banner spotted in Melbourne recently)

Wherever land monopolists can gain fabulous wealth without lifting a finger, the ultimate insult to their resource-poor fellow humans is the fact that they, with the assistance of their creative accountants and cunning lawyers, can get away with paying little or no tax.

As a general rule, those with the resources to pay, don't pay. Family trusts, dodgy charities, anonymous offshore funds, widespread rorts such as the bottom-of-the-harbour tax schemes, tax havens, the underground cash economy and more exist all over the world because no amount of tax legislation has ever been able to keep up with the widespread means to evade tax. We've had endless tax reforms and promises from governments to make everyone pay their fair share but, if anything, tax evasion is steadily getting worse. The rise of globalisation and its concomitant transfer pricing to companies set up in low-tax or zero-tax countries considerably lessens the ability of sovereign governments to levy taxes from companies and corporations. Governments then look to the softest source from which to extract taxes, through Pay-As-You-Earn schemes and Point-Of-Sale or Service taxes, all of which are to a greater or lesser degree regressive and therefore inequitable.

In the Third World, tax collection is usually an utterly different ball game. There, ordinary people cannot or will not keep financial records for tax purposes, like those demanded of us. Instead, businesses are "assessed" most rudimentarily. A retailer will have his stock roughly valued or a café owner's seats will be counted, and some guesstimate will be made as to the annual income and capacity to pay tax. This method goes back to biblical days, and tax assessors have the same notorious reputation for corruption now as tax assessor-collectors had then. The process is simple: the businessman will grease an assessor's palm and his assessment suddenly becomes much more "reasonable". This is the basic springboard for the Third World's endemic corruption, and it will definitely remain this way until Geonomics is implemented.

The contrast with Geonomics is total. It's not that LVT, as we propose it, cannot largely be evaded - it's that it cannot be evaded at all! Land is unique in that it can't be disguised, shifted offshore, or hidden under a tree, a building or a rug.

There is a variety of tools to ensure that LVT assessments are fair, reasonable and free of corruption such as software-assisted crosschecks and comparisons, as well as laid-down formulae covering various assessment factors. But the really important anti-evasion and anti-corruption measure upon which Geonomists insist is that all assessments should be completely open to scrutiny. Thus you will be able to visit the nearest office (or website) of the Valuer General and scrutinise your neighbours' assessments and how they were calculated. And also Kerry Packer's. Here lies another reason why plutocrats and the mega-wealthy fought so hard to discredit Henry George, finally deciding to instead silence him by bankrolling the introduction of neoclassical economics and the virtual removal of Geonomics from economics curricula. ...   Read the entire article

To share this page with a friend: right click, choose "send," and add your comments.

Red links have not been visited; .
Green links are pages you've seen

Essential Documents pertinent to this theme:

Top of page
Essential Documents
to email this page to a friend: right click, choose "send"
Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper