conceptualizer

October 24, 2007

Unpaid police

Why should the ISPs have to take on an unpaid policing role? It is for government to arrange policing. Laws exist on copyright and patent, but they are not effectively policed by the public sector. I think the ISPs should be paid for checking and again for each infringement they find. Lawyers are also required to act as unpaid police. They must apply money laundering checks to their clients.
The UK government is increasingly making business carry the costs of policing laws. This effectively makes services and products more expensive and is yet another stealth tax. It also makes those products and services less affordable to the lower income members of society and so discriminates against them. However, in principle I like the shift of policing to the private sector, as they will doubtless do a better job of it than the public sector. So to make it work well and discriminate less against the economically poorer members of society, there need to be incentives to catch law breakers. The current approach is to penalise the unpaid enforcer for any failure. If there is some benefit to this kind of work then it should be reflected in compensation for doing it. Payment is also likely to encourage a better enforcement process. The well known carrot and stick approach!
Ultimately we must decide if policing laws should be funded by public taxation or fees applied to those who seek the protection afforded by them. Clearly some enforcement is for the good of us all, where some is only for the good of a few. I would suggest for example that enforcement of fraud laws be publically funded, where copyright of music be privately funded. The latter need not be mandatory, but non-payment = no protection.

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October 10, 2007

Taxation Simplification

Filed under: Concepts, Economics, Ideas, Observations — Tags: , , , , — conceptualizer @ 12:02 pm

Although only a small improvement, it’s nonetheless good to see some simplification of taxation. Complexity increases the costs inherent in collection and administration, adding no value to the economy while adding opportunities for avoidance and evasion. The honest tax payer is pursued relentlessly, while the difficult target reduces their tax burden. Simplification can be a blunt tool, but by reducing avoidance and evasion it can also be more even-handed. Taxation should be funding the public sector of the economy, but in part has become a tool of the moralist. Differential taxation is used to punish success, hard work and spending on what a few have decided is not good for us. Taxation should be refocused on its purpose and needs to become simpler, less bespoke.
There is a strong case for drastic simplification in taxation. I suggest a gradual migration to zero personal taxation with all tax revenue raised from business. The simplification would produce huge benefits for the economy, but the total tax burden on the economy would remain the same, less the saving in administration costs. It would also encourage a dynamic economy as spending patterns would not be stymied and it would encourage people with money to move to our economy. Business would benefit from simplification of taxation and as a whole be no worse off, because the extra tax they pay will be offset by reductions in wage bills. There will be those businesses that come off better and worse. Those at the extreme ends of the ratio of taxable revenue to employee pay, but it would also tend to encourage reinvestment in research and development as companies seek to minimise their tax bill.

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