Commons-Based Taxation

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Proposed by James Robertson et al. in the paper: SHARING THE VALUE OF COMMON RESOURCES. Citizen's Income in a Wider Context

Which will appear in:

"Basic Income, Green Politics and Post-Productivism"; Special issue of the journal Basic Income Studies in December 2009

January 2009 Draft at http://www.jamesrobertson.com/article/citizensincome.pdf

Description

James Robertson:


“Existing taxes are becoming less viable.

For example:

• National economies in a competitive global economy have to reduce taxes on incomes, profits and capital in order to attract investment capital and highly qualified people - both being increasingly mobile.

• Ageing societies will be unable to support growing numbers of "economically inactive" people by taxing the work and enterprise of fewer people of working age.

• Internet trading makes it more difficult for governments to collect customs duties, value added tax and other taxes and levies on sales, and easier for companies and rich individuals to shift earnings and profits to low-tax regimes and tax havens.

• Tax avoidance by big corporations and rich individuals is already becoming increasingly damaging. The Tax Justice Movement estimated that in 2005 tax havens were costing £255bn annually to governments worldwide, holding assets of $11.5 trillion ($11,500bn), causing serious distortion of economic priorities, and encouraging criminal money laundering.


Shifting the tax burden on to the value of land and environmental resources which cannot be moved elsewhere will reduce these problems.


Existing taxes are not just under threat, they are actively perverse:

• By heavily taxing employment and rewards for work and enterprise and lightly taxing the use of common resources, they systematically encourage inefficiency in all kinds of resource use - under-use and under-development of human resources, and over-use of natural resources (including energy and the environment's capacity to absorb pollution); and

• By taxing the value added by the majority of people's positive contributions to society (VAT), and failing to tax the value subtracted by the rich and powerful minority who profit most from the value of common resources, they systematically skew the overall burden of tax in favour of the rich minority.

These facts all point to the need for a shift towards raising public revenue from the value of common resources. Common resources are resources whose value is due to nature and to the activities and demands of society as a whole, and not to the efforts or skill of individual people or organisations. Land is the most obvious example. The value of any landsite, excluding the value of what has been built on it, is almost wholly due to the activities and plans of society around it. For example, when the route of the London Underground Jubilee Line was published, properties along the route jumped in value. Access to them was going to be much improved. A public policy decision followed by investment of public money gave the owners of those properties a £13bn windfall financial gain. They had done nothing and paid nothing for it; it was a very large free lunch. By contrast, the Treasury's auction in 2000 of twenty-year licences to use the radio spectrum for the third generation of mobile phones raised £22.5bn for UK taxpayers, and governments of other European countries raised significant revenue that way too.

Among other common resources in addition to those already mentioned - land-sites, the electro-magnetic spectrum and the national money supply - are the environment’s limited capacity to absorb pollution and waste (including carbon emissions), many natural resources like water, and the limited space available for road traffic and airport landing slots. Their total annual value rises in step with economic growth. Collecting it as public revenue would reduce the need for many existing taxes.” (http://www.jamesrobertson.com/article/citizensincome.pdf)