The Campaign for Asset Based Taxation is a not-for-profit organisation arguing for a fundamental change to the way we operate and think about tax. It is non party-political and welcomes constructive participation in developing its ideas, strategy and outreach.
The key aim is to persuade legislators to unite behind the idea of using taxation to protect global wealth and well-being. The justification for any proposed tax must be grounded on this principle.
We believe that the taxes that meet these criteria are eco-taxes and taxes on the ownership of assets.
The nature of ownership is such that it limits the enjoyment of an asset according to the conditions set by its lawful owner. By exercising the rights of ownership an individual necessarily imposes restrictions on its enjoyment and thus depletes the commons.
Individuals will have their own opinions on whether or to what extent ownership presents a problem to society in general. This organisation simply argues that taxing the ownership of assets conforms with the principles of protecting global wealth and well-being.
There is no place for taxes on income or profit in our core philosophy. We believe financing so large a share of public revenue from these sources requires we maintain a velocity of activity that is essentially destructive and ultimately wealth-depleting.
Seven Roads to Asset Based Taxation
I’m curious to know more about this. If it’s about the idea of taxing unearned income from control of assets e.g. rent, capital gains, dividends and perhaps interest, then I agree in principle. The hard thing is to do so without putting large numbers of home owners into negative equity. And given that many are relying on house price inflation to provide them with a pension, then taxing this would need offsetting with an increased state pension. So a gradual approach would presumably be required.
Thanks Andrew,
It’s about challenging the presumption that we should tax income rather than wealth. Of course, part of the problem we are looking to solve is that much wealth comes unearned, either because it is inherited or because an owned asset value increases without the owner contributing significantly to that increase.
For ‘Negative equity’ to occur the asset value would have to drop below the amount borrowed to secure it. The imposition of tax could make that occur, but I’m not sure for how long that would be the case as the demand for housing is driven significantly by the shortage of affordable stock. The addition of tax may make some of this stock less affordable, but it would only logically drive prices down so far before the additional tax costs were offset by the falling borrowing costs. Falling prices would bring new entrants coming into the market and would be likely to hold prices steady.
The converse is also possible: one’s house price inflates such that it makes any tax payable on it unaffordable. Do have a look at the ‘Seven roads’ document on the ‘papers’ tab, where I outline how Personal Provident Funds can be used to support this proposal. The key thing here is that taxes are paid from this fund and overdrafts are in principle permissible. So, if we take the hypothetical case of someone whose house value increases disproportionately as a result of a new railway station being built within five minutes walk, the first thing to recognise is that this person has got richer! They may not have wished it, but if s**t happens this particular stool does at least smell of roses! If the owners are fit and well then they need to examine whether they can continue to live here with the associated heightened costs. If not, they can take their capital gain and move to somewhere they can more easily afford, but the capital gain means that they are at least compensated financially for the inconvenience.
If, however, they are elderly or infirm then it may be more appropriate to let them incur a PPF overdraft that gets paid from their estate after they have died.