Liberty Alone

I’ve seen little about this.

The German government is annoyed that some of its citizens avoid the high taxes it imposes by putting money in banks in Liechtenstein. So annoyed is the German government that they illegally paid for account details stolen by a Liechtenstein bank employee.

As Crown Prince Alois declared:

Germany will not solve its problems with its taxpayers by attacking Liechtenstein.

Guy Herbert has a good article here about how timid the proposed regulatory cuts are and the massive increase in government spending on bureaucracy this country has suffered under Labour.

Added with the fact that regulatory compliance costs have not been measured these cuts in regulation are not that big.

Given that there is no cut in spending, there is no cut in taxation and there’s no cut in tax revenues as well as this being a report from a working group not party policy why is the world aflame with ‘Tory lurch to the right’ stories? It looks like everyone has fallen for the Government and its media line…

It looks to me that there are some sensible proposals here. What the LibDems should have done is stood up and said ‘good try guys, there’s some good ideas, but these bits don’t work and its a bit timid’ and suggested our own set of bureaucratic spending cuts.
We are meant to be liberals, that means in this country wanting to limit the size of government. Even if we support the current welfare state, there’s still a huge number of places to cut the state back.

In tonights ‘London Lite’, one of the free papers which litter the tube network, I see a report that the LibDems are to announce a new tax policy which reduces the base income tax rate (which is welcome, although its not being reduced to zero) and ’stinging taxes on the rich’.

This sort of language and policy is not only unhelpful but it is simply wrong. We should be seeking to be liberal and no liberal would ever seek to use that sort of language. We desperately need to reassess our policies and look where we can reduce the tax burden not simply shift it around and penalise the rich for being rich (or having a high income).

Is this rhetoric to try and placate the grumblers of the ‘red bookers’* who complain monthly in the pages of Liberator? That’s the only explanation I can see for this turn away from what was developing into a far more sensible tax policy.

I also notice the local income tax is back. When can we give up flogging that dead horse? At least council tax vaguely taxes wealth, yes pensioners sitting on a pile of wealth are penalised, but with income tax its the productive who are penalised, is that any more fair? (thus the nature of tax as fundamentally unfair is revealed).

(* yes I’ve just made that up but it seems appropriate to describe them as such given their pureile slur upon anyone who dares to be economically liberal as an ‘orange booker’)

The latest suggested expansion of state power is the desire of the Inland Revenue and Customs to be able to take money directly from your bank account if they decide you havn’t paid enough tax.

This was discussed on the Today Program, without any discussion of the effects on the rule of law or civil liberties of course. They interviewed some accountants who were not opposed, they just said that safeguards are needed. Well, that’s what the courts are for you morons. They are the safeguards. Before they can take money the tax collector must get a court order. This is there as a safeguard against abuse. Its also a form of the idea that a person should be presumed innocent until found guilty. This change would reverse that, you would have to prove your innocence, you’d have to spend your money defending yourself against the money grab and sometimes that’s all it will be, grabbing money. Mistakes will happen, no matter what ’safeguards’ you put in place. Rather than simply asking you to correct what will often be an honest mistake, they will default to just taking it.

Of course, accountants would support this, it will mean more work for them as those rich enough seek to avoid taxation in other ways.

Perhaps its shockingly liberal, but perhaps we should think about not taking so much money in the first place. Perhaps we should simplify our tax system so its simply not worth it to try and hide money or to avoid taxation. Countries which have done this, and have a lower tax rate, have discovered that tax revenues increase as well as their economy being boosted.

A thought just occurred to me - an aim for liberals should be for every person to be able to live independently of the state, without state handouts, without state subsidy of health care or education. How can you be free if you depend on the state for your income, health or education?

Rather than aiming for a welfare state, we should aim to have no need for one. Rather than supporting the NHS we should be aiming for a situation where everyone can afford personal private health insurance. Rather than supporting the status quo in education we should be aiming for a system of private education which everyone can afford.

Such aims are far away, but there are some steps which can easily be made - reduce taxation, especially on the poor, giving them more disposable income.
Education could easily be moved in the right direction by switching to a full voucher system with the opportunity for individual state sector schools to go private or independent of their LEA.
Benefits should be simplified, reduced to a few, based on income for the most part.
Health is far more difficult to transition and indeed to find a solution which will ween people off the state whilst not leaving people stranded (although the NHS is not universal anyway). First step would be to dismantle the behemoth and pass power to the local areas and to have local funding.

Along with these we of course need a healthy competitive economy so naturally free trade and lower regulation are required.

Whether its totally achievable to have everyone living independently of the state is debatable (some argue that mutual societies and charities would allow this - perhaps they would, perhaps they wouldn’t) but I certainly think that a large majority of people could live without state subsidy and almost everyone today could live with a lower level of subsidy.

Just some thoughts, but I stand by the idea that to be free we should be as independent of the state as possible, and that’s a lot more independent than we are today (I’m sure holes can be picked in my other ideas though ;) )

If there is one area where regulation abounds, it is in the protection of the environment. Whether this is because the powers that be don’t believe that individuals will not or cannot act in an environmentally good manner I don’t know, but regulation and schemes to protect the environment abound.

Some of these regulations simply cost money without any actual benefit, but many cause worse environmental impact that if they had not existed, the most obvious example being the Common Fisheries Policy which is responsible for decimating fish stocks in the North Sea, the CAP as well is touted as promoting the environment but leads to more intensive and environmentally damaging farming techniques. Other regulations could have unexpected consequences - recycling targets mean councils may collect recyclable waste separately but then just dispose of it as normal. If you look you can find many examples.

Its in this light that I stumbled across what was described as ‘Free Market Environmentalism’ but I think is more laissez-faire than free market. It was described as having existed in the US before the US government decided to try and enhance industrialisation to catch up with Britain by protecting industry and giving it extra rights.
The system worked like so: If your property (or person) suffers harmful effects from property then you could go to court and get compensation and an injunction against the perpetrator. So, if your washing was made dirty by a local factory, you could get them to clean up their emissions. Or if your haystack caught fire from a spark emanating from a passing train you could get compensation.
This has two effects - firstly it encourages polluters to ensure they pollute less and develop new technology to solve the pollution problem, secondly it creates an industry of environmental forensics which works to determine the actual cause of problems claimed to be caused by pollution (to correctly attribute blame and discover fraud) and identifies more types of pollution.
This system fell apart when government decided that business was too important for the country to have to deal with this sort of thing so brought in regulations to protect business. That is when environmental regulation came in. The smokestack height laws which sought to assuage people living closer to businesses by ensuring chimneys were of a certain height, but that simply spread the problems out, rather than preventing them.

This is very attractive, but it rests on two things and has one major problem.
The two prerequisites are:

• Strong private property rights - if you don’t own something then why bother trying to preserve it
• Easy access to the judicial system for all

The first is easy in a liberal society, in fact a liberal society is based upon property rights. The second is more problematic, and with our current arrangements is not true - and I have no idea how to make it true, although, groups like Greenpeace and Friends of the Earth could fund access to the legal system for this purpose (although they’re too political to do this in a fair and equitable manner at the moment).

The major problem is that some pollution is not directly attributable to one entity or the damage is subtle or effects everyone. Car exhaust is an obvious case, or pollution from coal fires is another. Of course the biggest example today is greenhouse gas emissions. For the most part no single person suffers large amounts of damage, but in the long run it seems that everyone suffers.

This is where some sort of intervention is needed. I naturally support pigouvian taxation over ham-fisted regulation as it enables people to make value judgments about their actions and avoids the command-control structures so beloved of regulators as well as ill thought out regulation.

The Register has an article about the way technology advance has decreased energy usage by data centres.

The most instructive part of the article is that the technology wasn’t developed to be environmentally friendly but to save costs. Blade servers do this in two ways, firstly by saving space - you use less space in a data centre you spend less on rental. Secondly reducing energy requirements. If you have lower energy appliances they cost less to run, and in data centres this saving in added to with the cooler temperatures of low energy use leading to less cooling being needed.

This really does illustrate the point about environmental taxation. Money is easy to think in and we all like to save it. If we can get the costs of pollution in this form then we can reason about it much more and choose to spend our limited money in the best ways for us, which will very often end up reducing those polluting activities that we have to pay for.

This will work much much better than any exhortations from the great and the good, or being castigated for daring to want to attend a child’s wedding in another country.

There are many reasons people dislike the council tax, not least the absurdity of paying tax twice for improvements you make to your own home and the intrusion of the government into your home which this necessitates.

Tim Worstall has come up with another reason the council tax is ill thought out, one which affects us all.

Taxing improvements on our homes is not simply a tax on luxury, but a tax on improving the environmental impact of your home. Especially given the very high number of old buildings in the UK this has a very bad effect on our efforts to reduce our environmental impact.

So, there you have another reason to abolish the council tax and replace it with a sensible tax (which of course should be locally determined)