Taxation is essentially the only state revenue. It is the only cash inflow on which almost all the cash outflows of the government are based. The potential gap between (smaller) inflows and (larger) outflows is covered either by internal or external borrowing. Significant detail: it is very often the imposition of extraordinary taxation in order to serve this loan.
This report shows the technical nature of taxation within the existing national macroeconomic circuit. The other characteristic is associated with the theoretical realizations of how it works. Thus, in a liberal model, taxes are extremely limited, just like the size of the state they are called to serve. On the contrary, a centrally designed economic system covers an extraordinary space within the economic activity, with an unavoidable result of high tax rates at the same time as it widens the tax base within its limits.
Our history learned two things about taxes: First, in terms of economic theory, it has now been shown that large taxes on many different bases on either the chap la chloride, either on the input the d or but Tosh, leading to a fall of revenue and hence a reduction in economic activity. The State “enters” a claim against all these overdue debts, but of course it is not an asset, simply because it is not a divisible size. At the same time, with the money of the (unincorporated) taxes waiting to feed a mechanism that has been brilliantly baptized as Leviathan. The second feature is in treatment of political theory: Some people believe that taxes can be internal lever redistribution within the economic circuit. And so a policy tool. Yet even the Marxists separate the term “Economic Policy” from the science of “Political Economy”. If one takes the necessity of pursuing “Economic Policy” then he will have to accept that a whole series of mechanisms will be dismantled, resulting in the “Economy” dysfunction . For example, if a grant is to be awarded to a specific group of professionals (eg a low tax rate), it is highly likely that the revenue gap will have to be covered by an extraordinary fee on the remaining enterprises (which of course are not subsidized). The simple consequence of this plan is to increase the supply of non-demanded products (subsidized) and to increase prices on demanded (and non-subsidized) goods to which the extra taxation has been passed.
Conclusion: The international experience of the decades from the early 1960s to the late 90s has taught us how dangerous and ineffective it is, first of all, to impose high taxation and secondly to “master” the specifications and basic parameterization of the tax system. But is that exactly the case?
Since the 18th century, both the Classical and the Neoclassical School both have argued. When the economic crisis of the interwar period was later followed and followed by the Keynesian approach to finance, a little confusion was created, as some thought that “General Theory” was a modernized and socializing view in Marx’s writings. The social state flourished, but shortly after the mid-1960s, a number of regional and non-factors shattered the illusion, forcing the entire Western world to coexist for over 15 years with recession and stagnation. The logic came back and became extremely convincing through the enormous recovery that followed up to the middle of the first decade of 2000. This experience has been taught to us. But our experience has taught us yet another: How to move the economy needs Capital. And how this Capital should be cheap. So what happens when, for some reasons, Capital is dormant?
In the first place, we must all accept that here we are talking about venture capital in the form of immovable property, financial guarantees, equipment, etc. In any case, the reason is for assets that are clearly valued. Secondly, we also have to accept that nothing is idle (as well as nothing moves) unnecessarily. Obviously, immobility gives profit or expectation of profit. However, the Economy as a single organization is deprived of resources when they are inactive. This immobility creates a productive vacuum. The production gap in turn threatens companies with potential losses, mainly through short-term increases in production costs. Final product values are proactively priced in order to immediately cover the lost profits. And so the Market is lost.
Is there a way to give impetus to dormant capital? Given that nature abhors the gaps and given the above-mentioned “productive gap”, yes, there is a way and is “violent” according to the writings of Classical Economic Orthodoxy: Taxation of dormant capital. Does the phrase “hare” remind you of something?
And here comes the big debate about (new or old) real estate tax. It would be immense naivety to speculate on tax evasion to avoid the “productive vacuum”. The Greek Economy suffers from such quality and quantity distortions, that such problems are almost marginal. Nevertheless, it is worth considering that seven years ago, a simple and uncomplicated apartment on the western margins of the region was being marketed at prices above € 1.500 per square. Even today, when the recession requires first of all liquidity, the prices of such properties are well kept. Yes, I agree, in Kolonaki a professional property has lost a huge piece of its old value. But what kind of demand does it have against an apartment of 80 sqm in Peristeri? And why does the owner pretend (with great protest) to keep this triennial, paying taxes and fees instead of lowering his claims?
Capital taxes over time – provided they are used as a development tool rather than as a backing for the perpetuation of a blatant warp – have provided solutions to economies found in a quagmire. It is one of the few cases in which the State can contribute to private initiative. It is worth remembering, that George’s first moves W. Bush as president was the reduction in inheritance tax. The former US President has the impression that he was conservative. That is, not the Liberal. His stakes were a sterile charter for relatives and friends, not the substantial promotion of competition rules. On the other hand, Scandinavian Social Democrats are dramatically taxing non-distributed profits (only) when they are not reinvested. These are, rather , Liberals.
Finally, are capital taxes useful? Yes, I would answer. There are, however, two very important parameters, which must be met constantly: On the one hand, taxation should be targeted by a developmental viewfinder rather than trying to patch holes or meet temporary needs. In the context of such a policy, taxing criteria (eg years of use of the item, income status of the holder, possession or co-ownership of other assets, etc.) should be established. On the other hand, the philosophy of the measure should be limited to the technical nature of its role within the economic circuit. The measure can offer in the sense of the tool, which if not useful simply replay it in the toolbox. Taxing a property is not the rumble that will yield social justice. Instead, it is a revenue-generating mechanism for the benefit of the economy. The “Capital Tax” should not result in “Capital Tax”.
It is worth noting that the theory of land taxation has as a father an ignorant physiognomy of Economic Theory: the American Henry George (1839-1897) . George had proposed this “single tax” from the middle of the 19th century as a basic condition (and a unique parameter) of the economic model he proposed. His idea was lost with the passage of Historical Time precisely because his own inspirer, he promoted it as the result of a way celestial faculty . By attributing it beyond its financial content, it condemned it to obscurity, inactivity and graphicness – of course, which impede the whole rationale of theory. Nevertheless, look at what is possible to catch in the scientific waste of history .