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We asked the Carbon Coach, Dave Hampton, to give his take on systemic reform. Here's what he had to say.
What’s with this ‘SYSTEMIC FISCAL REFORM’ malarkey then?
What’s with this ‘SYSTEMIC FISCAL REFORM’ malarkey then?
Imagine:
Imagine:
Imagine it is a decade or so into the future. The rules of the UK game, the collected “that’s just the way it is round here” - have been completely refreshed - you wouldn’t recognise the place. We are talking about ‘post’ Reboot Britain. It all happened by consensus, without bloodshed, without any sudden losers, or sudden winners, but the shift had been radical, imaginative and decisive. Like all great inventions, it now seems so obvious – now it has happened. (Just like it had seemed utterly unthinkable and impossible before.)
The huge benefits enjoyed by SFR Britain
Cool Green Britannia!
Enterprise is natural, promoted, automatically, fairly, ecologically and systematically
Tax bureaucracy has been entirely eliminated at the level of individual and enterprise
The wicked witch of tax inspector and tax forms have gone
The ‘black economy’ and the criminal economy simply died off (without any tax advantage)
Labour intensive goods and services are affordable – there is more decent work
(High value-added products fall in their cost? Example??)
Fuel efficiency is rewarded and automatically pursued vigorously and creatively
Economic output has grown fast as real value and happiness is delivered
Waste is systematically reduced and eliminated
Property speculation has ended – those days are gone
Urban land value has fallen, but it did not collapse – change was calm and progressive
House price inflation is now similar to that of other goods – stable and predictable
A 'universal welfare payment' has pretty much eliminated poverty
Strong healthy government is both provider and beneficiary of public infrastructure
The carbon tax has reduced demand for fuel imports considerably. This has reduced the trade deficit. As other nations copied the carbon tax internationally, there were steady substantial falls in fuel prices on the international market, reducing profiteering from fossil extraction, and encouraging stringent carbon constraint.
The innovation of strong carbon taxation in UK created the mother of invention, forcing the UK to be highly creative innovative and ingenious. Although some had forecast that carbon taxes would kill the UK economy, the opposite had proved to be true. The taxes made UK stronger. It’s true that some of the old dead wood (or dead fossil) – the dinosaur carbon intensive industries were hospice to an early death, but the green shoots of industries of the future were given air, water, space and favourable conditions to thrive and excel. Britain overtook Germany, Japan, Scandinavia and Holland and became the low carbon economy that was envied and copied by the ROW.
Philosophical Arguments for SFR
Philosophical Arguments for SFR
In the 'state of nature', prior to invention of government, land was either in an unowned state, or implicitly, owned by all humanity. (The Commons.)
Appropriation is simply theft, either from the previous owners — or from society as a whole.
In a sense, landowners accrue some of the economic value of the labour of the community as a whole. Landowning can therefore be said to be appropriation of the labour of the community.
A healthy community will choose laws of justice that maximize the minimum income of individuals in the society.
How it Happened
Early on - a low level carbon price of approximately £10-20/tCO2 had been introduced across the economy, upstream - on all fossil fuel extraction and importation. This had enormously reduced paperwork and increased fairness.
Later a much higher carbon price had been adopted – a huge gamble. But this had greatly encouraged renewable electricity too, forcing UK to forge an indmitable competitive advantage in renewable energy – the only type of energy anyone still buys now!
When tax was imposed at £200/tCO2 this also raised about £2000/person/year, or £100bn initially. The low paid were protected by refunds based on historical usage for the introductory years. Border tax adjustments solved to any competitiveness impacts on any energy-intensive sectors deemed essential during the transition, such as old hospitals.
Of course it wasn’t that easy.
The two biggest Mafia’s of their time, of all time, had to be exposed and brought to book:
Big Oil (and Fossil), and
Land Owning
It had seemed unthinkable that either of these powerful, clever, insidious and ruthless elites – barony’s - could ever be held to account. But by repeated exposure of the truth and the injustice, eventually even those ‘inside’ the elite anachronisms agreed peacefully to phase out their restrictive practices.
The genius and the magic in how this happened was in the ‘armistice’ period – the transition years. Akin to an ‘Amnesty’ – those who had stolen land in the past were able to give it back – without losing everything – they were compensated for the loss of past (ill-gotten) privilege. Typically previous land barons said they knew it was wrong, knew it couldn’t last for ever, enjoyed it while it lasted, but were actually happier now it had come to an end.
The same applied to the old oil and gas barons.
Back to the Proper Function and Purpose of Taxation
Taxation has typically developed to raise money for fighting wars. SFR originated at the time of the start of the great human war against carbon! The war for our children’s future.
In ancient Egypt one purpose of taxation was to build grand monuments. The monument to SFR would be the ongoing health of the Earth itself – our legacy – that future generations would enjoy.
In the past tax systems had sometimes redistributed income as an ideological goal. This time equal shares and a level playing field was the only way to unite the people to fight a common just war.
With SFR all private incentives were aligned with the public good.
Taxation no longer interfered with the individual.
The tax protected the welfare of children and supported autonomous forms of social organization.
The financial incentives embodied protected public property and the environment - and promoted intergenerational equity.
SFR created economic stabilising forces for climate and ecology.
The taxation of labour used to encourage the 'black' economy.
SFR gave rise to the new ‘Green and Grey’ and ultimately the Bright Green Economy.
Economics has to change
'When a discipline is in crisis, attempts are made to change or supplement its theses within the terms of its basic framework - a procedure one might call 'Ptolemization' ... the true 'Copernican' revolution takes place when, instead of just addiding complications and changing minor premises, the basic framework itself undergoes a transformation. (Zizek 2008: vii)
LAND = our Home planet - sub-divided unfairly and historically stolen
Where we were:
We thought that in order to reduce the fiscal deficit to sustainable levels and stabilize the national debt, the UK government would need to drastically cut spending and/or increase taxes and/or increase the growth rate of (nominal) GDP.
Or... Good Green Growth.
The breakthrough was the decision to tackle head on the two biggest institutionalised misappropriations:
Of land.
Of fossil rights underground. Why should anyone own past lives – graves.
Of air space in which to store pollution?
The Commons
Everyone and no one owns the land, the water, the air, resources. Everyone must pay for pollution and ecological damages... dilapidations?
Rent
"No generation has a freehold on this Earth. All we have is a life-tenancy—with a full repairing lease." Rt Hon Margaret Thatcher MP
The idea of the GOOD ENOUGH PARENT
Optimum taxation – minimal stick, max carrot. Simple fair rules enforced on all.
In the old regime BIG POLLUTERS were excused, small polluters were caned.
Landlord Tenant was extortion and debt slavery.
The word Mortgage means BOUND until DEATH
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