The UK Chancellor Alistair Darling is facing a growing problem as he tries to prevent large companies from pulling up their tent pegs and fleeing to less arduous tax regimes. The Times today in Business News has Richard Lambert Director-General of the CBI saying that boards of FTSE 100 companies are increasingly near to saying ‘shouldn’t we be discussing this?’
Who will be left to pay UK taxes, when large numbers of businesses decamp to Dublin, Jersey or Bermuda, etc? The answer is to tax things or people who cannot move abroad. This includes the mass of residents for whom no such choice is available – their tax is likely to be raised as businesses flee. But an ideal tax source is the value of land. This would be an amazing source of revenue year on year. It could rapidly replace the tax on goods and work (VAT, income tax and corporation tax) leaving a lower tax burden especially on the poorer citizen who may not own their own home. It could make the UK a tax haven for world businesses. This enlightened tax reform could bring 'The Economics of Abundance' (search for that term!).
The book The Free Lunch - Fairness with Freedom investigates the practicalities of implementing this reform. See also this Blog for 8 April 2007.