Monday, 6 June 2011

Get rich quick - Trade Property. Collect Rent. Avoid Tax.

To explain the graph, what do we mean by Earnings, Tax and Rent exactly?
  • Earnings are the share of total production that go to workers and enterprises, as wages, salaries and the return to created and invested capital. Earned incomes. Money and credit are not capital in the economic sense. Nor are shares, bonds or any other pieces of paper created as IOU's. They are obligations to transfer existing wealth from one to another and add nothing to the common stock. We like money its a very useful labour saving device, its just not capital. Understand this and find yourself soon on the narrow path
  • Tax should be self explanatory. What is taken from total production, work and enterprise, to fund government. Most tax is used to pay welfare and welfare is an unearned income or windfall. We're not saying we should abolish it. We are saying it is unearned and an unnatural distortion.
  • Rent, specifically economic rent, is the share of total production that goes to the ownership of non productive assets. Things that have value and command wealth but have zero cost of production. Unearned incomes or monopoly profits. Such as the location value of property(mainly 'interest' on mortgage assets), the unearned profit from cornering a market, natural resource rents and other smaller scale monopoly profits such as can be gotten from intellectual property monopolies. We like rent. Remember that its not capital either and find yourself even further along the path. We want rent to increase in quantity, because that is the primary indicator of a society in advance
  1. Census Reveals Australians Have Mortgages, Not Homes
  2. GDP as Earned and Unearned Incomes, based upon and extended from Dwyer, T.
  3. Mark Wadsworth: Rents and Taxes as a Share of UK GDP
  4. LVRG and Terry Dwyer - The Taxable Capacity of Australian Land and Resources
  5. Mark Wadsworth - Chart 8: Rental costs have also risen
  6. Business Insider:Here's What The Wall Street Protesters Are So Angry About..
  7. Our irrational distribution of wealth (1908) - Byron Collins Matthews
  8. New York Times  - Real Wages Fail to Match a Rise in Productivity
  9. The Independent - Stewart Lansley: The unreported cause of the financial crisis is shrinking wages
  10. Wikipedia  - Standard of living and GDP
  11. Truthout, Twelve Charts That Will Make Your Blood Boil
  12. Henry George, David Ricardo, Adam Smith et al. The Effect of Material Progress on the Distribution of Wealth
  13. The High Pay Commission - The Cause of High Pay: the role of land value
  14. The Robin Smith Institute - Why Do Your Earnings never Rise?
  15. US wealth gap between young and old is widest ever
  16. 23 Mind-Blowing Facts About Inequality In America