Re: The Great Stimulus Debate: Round I
by Macrocompassion
The only economic stimulus worthhy of its name is one that would stop the huge loss to the country of the effects of our present taxation system, that discourages the production and consumption process of the nation's wealth. This most anti-macroeconomic success is in the control of the factors of production of which the use of land and other natural resources far out-weighs any limited control it may apply to the capital investment or of the labor involved. The current falling of the stock-market indices is not indicative of the true state although it is usually thought to be a symptom of it. All that it shows is the present speculative losses in second-hand shares or pieces of paper, not the actual capital durables nor our enterprise nor our potential to effectively make goods and to supply services. Thus by introduction of an incentive tax to replace the present dis-incentive ones, does the nation stand any sincere chance of making progress by the complete use of its actual potential to make and enjoy the results of its working effort. The speculation in land value, and its withholding from use which is the current and significant reason for the depression into which we are entering, could be lifted by the use of this form of taxion to reduce the high cost of production and similar monopolisation of its means of investment, by the encouragement of a large number of smaller entepreneurs who would be able to operate with deminished costs due to the cheeper and more readily available land and its more competitive and lower rent. We should tax what the land-monopolist takes from the community, namely the opportunity to produce, and not tax what the worker/comsumer makes and necessarily buys.
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