From: fofp@castle.ed.ac.uk (M Holmes)
Newsgroups: uk.misc
Subject: Re: Transport subsidies - Was: Car Parking
Date: 21 Dec 92 12:39:05 GMT
Distribution: uk
Organization: Edinburgh University

snail@lsl.co.uk writes:
>> 
>> Since the government subsidises buying a house through mortgage tax
>> relief. Or to put it more accurately, people like me who don't own a
>> house subsidise house owbers through mortgage tax relief, houses became
>> the most tax-efficient way to save that extra lolly. Add to that some
>> further government interference by discounting some house prices and
>> they had a fine asset-bubble going. The results of which are the current
>> recession. I blame homeowners and government in about equal proportions
>> for this one.

>Ah ah, you blame people for taking advantage of a system that is available to
>all, that is made available by the government. If you dislike the system, blame
>the government for providign the system, not the people who take advantage of
>that system, unless those same people actually put the system in place, which
>in this case they did not do.

As I said, I blame both. One of the problems with the nanny state is
that people blame the government even when they have responsibility
themselves and also expect government to provide solutions instead of
making a start themselves. People were buying houses as speculation and
this speculative boom brought the bust that we've been experiencing.
Those people were concerned with their own finances and ignored the
inevitable consequences. Consequences which affected everyone, not just
those involved.

>> And this has to be a tricky example for all you people who attempt to
>> make government seem like some sort of rotary club benevolent
>> organisation. Let's look at how mortgage tax relief works:
>> 
>> * Government says to everyone: "pay me money or you go to jail."
>> 
>> * Government says "but if you own a house, you can pay me less."

>Actually the government says, in your simplified speech:

>	"pay me money or go to jail" to everyone

OK.

>and it also says, because it wants to encourage everyone to own their own home

>        "if you take on a mortgage, we will help pay some of the interest up
>         to but not above a certain amount, to qualify for this you have to
>         make an investment (ie: purchase a house/building/etc)"

We can call it help with the mortgage, or we can call it what the
government does: "tax relief" (ie *less* taxes). It still amounts to
non-homeowners being forced to subsidise homeowners once you look at how
cash goes in and how it goes out.

>I still pay the same taxes. The difference is they then choose to help me
>purchase a house. The people who need no help purchasing a house are the well
>off, not the poor, as you suggest later in this article. The poor need help
>buying a house and that is mortgage subsidy is about.

Everyone with a mortgage gets tax relief, there's no stipulation that
they be poor. The most poor can't afford a deposit on a house but they
still pay taxes to help the well off pay their mortgages.

>> * Because of the tax advantages, a lot of British wealth is tied up in
>>   housing (which sits there producing exactly nothing) rather than
>>   industry (which produces real wealth for the economy).

>Ah you serious?

Yes. Check how much capital is tied up in housing.

>> Industry, being
>>   starved for cash,

>Because the government has no intention of helping industry, not because of the
>housing market!

Industry is helped by people investing in it. That means buying shares
rather than buying property. The government *could* buy those shares for
us I guess, but it'd then have tpo take more tax from us to do so. It
amounts to much the same thing except that then people wouldn't get to
choose which industries to invest in. However it goes, money now tied up
in housing is denied to industry and that's been a problem in the uk for
a long time. If you want references to economics papers on this problem,
I'll get 'em.

>> has to pay more for it and this both makes it
>>   uncompatitive and reduces the time-horizon for an expected return on
>>   investment. Short-termism becomes prevalent.

>Which is a result of the government economic policy, not because of the
>housing market!

Government policy puts the housing market out of kilter. That attracts
capital which is therefore denied to industry. Agreed though, if we
could change government policy on MIR, we could make a start at fixing
the problem.

>> We've argued transport and health into the ground. Let's see some
>> statists defend this one.

>Having lost both arguments and refused to answer some of the questions about
>what happens to the poor

In what way "lost"? I've said that what happens to the poor in a free
economy is whatever people want to happen. They have their money and
they can choose.

, we suggest we move on to new ground and argue on the
>side of the poor! 

I'm arguing on the side of the economy here. The fact that the poor get
shafted by the mortgage relief system is just a bonus in pointing out
the stupidity of it.

>>>> However, the bus fare will no longer include road tax, petrol tax or VAT. 
>>>> You have to look at the whole picture.
>> 
>>>Well I'm glad you're abolishing VAT, thats a tax on the poor anyway.
>> 
>> Interesting that we agree on abolishing taxes whenever *your* favourite
>> group is concerned but not when it is advocated for everyone. This
>> doesn't sound like democratic fairness to me. Care to explain it?

>VAT is not my favuorite group.

I meant the poor were your favourite group. You appear to be in favour
of abolishing tax for them, but not for everyone else. Some
inconsistency here surely?

>> But in your arguments you support a tax system that *jails* people if
>> they don't have the money to pay the government's "fare".
>       ^^^^^
>No I don't. That is not the way the tax system works, and you know that.

Yes it does. People have been jailed for precisely this reason.
>> 
>> Money is only power if you can *buy* political influence. When the only
>> political influence to be had is the right to protect you, I doubt the
>> companies will be buying.

>Or bribe people, or pay people to muscle in on people, or pay people to 
>bully people, frighten people, intimidate people, or buy the police to
>look the other way

All illegal, and I've said that I believe that it is the job of a
government to prevent this.

> or pay for expensiev drug/gun smuggling operations,

In a free market, smuggling would be unnecessary.

>for someone who says they are afraid of the police state/big brother watching 
>you syndrome, you seem very able to set up a situation where just this
>sort of thing is easier to do. Once you have toll roads set up, you know
>the basic area that a car is in, and thus you know roughly where poeple are.
>Big brother through libertarianism!

Agreed there's some worry there, and I'd prefer anonymous methods of
toll collection. The best solution to the Big Brother scenario though is
limit the government as much as possible. You are under much more threat
when they have the right to confiscate your property or liberty (such as
in a tax system) than you are when they just know ehere you've been.

>> On the idea of a monopolies commission. Arguments here have convinced me
>> that it's a tricky point. Monopolies could be dangerous, but a
>> monopolies commision would give government too much control. I need to
>> think about that one.

>You'd need a super mega all incredibly monstrously powerful monopolies
>comission or equivalent to sort this out under your free market, and of course
>with all that money flowing about, it'd be wide open to abuse.

Abuse would be illegal. I don't see that there'd obcviously be any more
abuse than there could be at present.


>Your assertion that because there'd be no government, politics wouldn't come 
>into the equation falls down here, since politics is not just about political
>beliefs, it about who you know, how much you can bribe/buy people etc, and
>any control/standards/enforcement (include the police here) are open to abuse
>(as they are now) and with more money to abuse them with, they are even more
>open to abuse.

Still not getting through am I? I DO NOT ADVOCATE ANARCHY!!!!!!

read that a few times please because I'm tired of typing it.

Right, bribery is against the law and can get folks arrested. More money
does not equal more abuse. If law enforcement was the only real task of
government, perhaps the simple concentration of its efforts there would
improve things. In any case, there's no reason to expect it to get worse
just because the government isn't doing all the other stuff.

>snail@lsl.co.uk      

FoFP

>"Washing one's hands of the conflict between the powerful and the powerless
> means to side with the powerful, not to be Neutral."
>                                                     Quote by Freire.
>                                                     Poster by OXFAM.


But that's precisely what was advovcated by the statists here in the
Nestle case! The argument was that "it's too big a problem for me, the
government should fix it."

Maybe a corollary could be inserted into your sig: "and relying on the
government to do something *is* washing your hands of the issue."
Newsgroups: uk.misc,soc.culture.british