The world according to GRP

tag:blogger.com,1999:blog-196165922008-07-04T13:27:41.674+10:00The world according to GRPGRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comBlogger52125tag:blogger.com,1999:blog-19616592.post-21227513435176893972008-07-04T13:13:00.002+10:002008-07-04T13:27:41.716+10:00Land tax myth persists

[Letter rejected by the Age, July 1, 2008.] When David Imber ("Low-income renters suffer most from government inaction", July 1) complains that "even rising rental returns and generous land tax cuts are not sufficient for landlords to enter the market," he reveals that he thinks land tax reductions help. They don't. As land is not a product of human effort, its price is determined entirely on

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-51718451415001818722008-06-23T09:37:00.001+10:002008-06-23T09:37:55.894+10:00It's the loop, stoopid

Connex chief executive Bruce Hughes warns that the centre of Melbourne will soon be unable to take any more trains. Yes, Mr Hughes. That's because you insist on sending so many trains around the loop instead of out along the next radial line. This makes the loop a bottleneck, which in turn provides a convenient excuse not to buy more rolling stock and run more services. [Letter submitted to

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-90985609192695997332008-04-21T18:31:00.001+10:002008-04-21T18:31:18.675+10:00When $4 million for nothing isn't enough

[Letter rejected by THE AGE, April 15, 2008.]Now let me get this straight. The Property Council of Australia is complaining that if the value of your land has risen from $6 million to $10 million since 2005, your land tax bill has not fallen in spite of cuts in the top marginal rate ("Land tax cuts won't bring savings", THE AGE, April 15).Oh. So it's not good enough that you have grown $4m

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-5475344718040697822008-04-07T13:46:00.004+10:002008-04-24T00:53:01.369+10:00Still on the mountaintop: Economically rational racism

[First published at OpEdNews on April 3, 2008.] Forty years ago, as Martin Luther King Jr. spoke of the Promised Land and prophesied "I may not get there with you," a quiet revolution in economic theory was beginning, which would ensure that Dr. King's hearers, except perhaps the occasional Caleb or Joshua, wouldn't get there either. The architects of the revolution didn't plan it that way, but

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-90000654357360955662008-04-06T23:53:00.004+10:002008-04-10T18:06:01.394+10:00How to dodge stamp duty

Buy the house you want to invest in, not the one you want to live in. Rent the one you want to live in, and don't sell the one you've invested in until you retire. That way, you don't pay stamp duty every time you change your address. Stamp duty: An avoidable tax on an unavoidable event Face it: sometimes you need to move house. Usually the need is employment-related. As employment becomes

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-57777149008181002552008-03-12T17:39:00.003+11:002008-03-18T18:43:50.812+11:00Amazon should buy WordPress.com!

Amazon is both an advertiser and a retailer. Google, in contrast, is essentially an advertiser; it doesn't have many revenue-earning products except ads. In terms of vertical integration, Amazon's weakness is that it doesn't have an ad-delivery platform whose reach compares with that of Google's search engine or video hosting service (YouTube) or blog hosting service (Blogger). As a solution,

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-35502394346874550382008-03-12T16:12:00.005+11:002008-03-17T10:57:28.195+11:00Amazon needs ad widget with whitelist product selection

I used to carry Amazon Omakase ads (see https://widgets.amazon.com). But I got rid of them because they kept advertising ... ahem ... inappropriate products, in spite of my category selections, and in spite of the lack of any warrant in the content of my web pages. In that sense product categories are too permissive. But in another sense they are too restrictive: what if I am willing to

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-17452891158061887632008-03-12T13:44:00.002+11:002008-03-27T16:32:36.598+11:00Apply your razor to the FHOG — surgically

Dear Mr Tanner, I respectfully submit that the First Home Owners' Grant (FHOG) should be available only for new homes. Such a reform would fight inflation not only by reducing public expenditure, but also by easing the shortage of housing. A shortage of housing is inflationary because it raises rents (which feed directly into the CPI), and because it forces employers to offer higher wages so

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-43652809447658245932008-03-05T11:23:00.000+11:002008-03-05T17:40:15.995+11:00The fiscal equalization myth

[Letter submitted to THE AGE (Melbourne), March 5, 2008.] Contrary to the parochial prattle of Victorian Treasurer John Lenders, the carve-up of GST revenue between the States does NOT constrain their ability to build infrastructure. The benefit of an infrastructure project (net of user charges such as fares and tolls) is location-specific and therefore is reflected as an uplift in land values in

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-15888340865781117702008-02-29T15:48:00.001+11:002008-02-29T15:48:16.936+11:00100 words for the Australia 2020 Summit

Benefits of ECONOMIC GROWTH mostly disappear into land values. Benefits of INFRASTRUCTURE, including that which contributes to ecological SUSTAINABILITY or the viability of RURAL COMMUNITIES, are manifested as uplifts in land values in the serviced locations, as are some benefits of FAMILY SUPPORT services, HEALTH services, CULTURAL facilities, and even NATIONAL SECURITY (largely the security of

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-92167377242407976502008-02-28T00:58:00.010+11:002008-02-28T19:20:31.453+11:00Alternative Economic Review No. 5

The global economic crisis from a non-neoclassical viewpoint Final Edition — February 2008 Editorial: The myth of progressive taxation By "progressive" income taxation and "means-tested" welfare, governments make a great show of taking from the rich and giving to the poor. Of course this pretense conveniently ignores such things as "business" deductions, concessional taxation of capital

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-72752136402384814572008-02-25T02:17:00.006+11:002008-04-01T17:10:19.722+11:00Can you stop paying the mortgage and keep the house?

As falling U.S. home prices leave mortgage borrowers owing more than their homes are worth, borrowers are encouraged to stop paying the mortgage, move out of the house, and send the keys to the bank ("jingle mail"). That much is well known. But, as this Bloomberg story explains, the practice of selling and reselling mortgage loans, packaging them into securities and selling them again, and so

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-30469189346479445812008-02-22T11:54:00.001+11:002008-02-22T11:54:14.756+11:00Here we go again: Land tax doesn't raise rents

[Posted to www.news.com.au/comments/0,23600,23257069-14327,00.html (cc: Greg Hunt MP).] Land tax REDUCES rents. It is payable regardless of whether the land is built on or let to tenants. So the owner, in order to generate income to cover the land tax, must build a dwelling (if one does not already exist) and offer it to tenants. This increases the supply of rental accommodation and therefore

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-24754566520058050162008-02-18T18:10:00.000+11:002008-02-18T18:11:04.472+11:00Gifts disguised as incentives

[Letter submitted to THE AGE, Melbourne, Feb.18, 2008.] THE AGE reports that while lending to property investors buying EXISTING homes rose 18% last year, lending to investors building NEW homes fell again, and only one in 12 dollars lent to investors was used to build something ("Investors' housing splurge", Feb.18). These figures demolish claims that the most prominent tax concessions for

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-44190898023825878202008-02-11T22:48:00.001+11:002008-02-17T16:13:01.810+11:00How the Left could learn to love a retail tax

Conventional wisdom holds that replacing income tax with a consumption tax would be regressive, and that it would devalue past savings by raising prices. Both objections assume that gross wages and salaries would stay the same. If, instead, net wages and salaries stay the same, both objections disappear. [Note: This proposal is simpler than the one in Raising Australia's Market Share, and more

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-49138474202452388352008-02-08T21:44:00.000+11:002008-02-08T21:45:01.189+11:00Google Earth shows two whales

The image is a cropped screen capture from Google Earth (http://earth.google.com/) at location 24 deg 37'20" S, 153 deg 17'29" E -- that is, outside the sandbar north of Sandy Cape, Fraser Island, eastern Australia. North is up. The two dark shapes are at least 12 metres (39 feet) in length. [Access date: Jan.20, 2008. Photography date: Unknown.]

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-33662421096712457562008-02-08T19:11:00.001+11:002008-02-12T23:08:21.009+11:00Building slump is inflationary

[Letter submitted to www.crikey.com.au, Feb.8, 2008 (published Feb.11).] The Reserve Bank raises interest rates in response to inflationary pressure. A major cause of that pressure is scarcity of accommodation in suitable locations. A shortage of commercial/industrial accommodation is a "capacity constraint", limiting the supply of goods & services and raising prices. A shortage of housing

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-29624983175036180452008-02-07T20:57:00.000+11:002008-02-07T20:58:36.831+11:00Tax property bludgers

In the teeth of a worsening shortage of housing, rebounding house prices and soaring rents, why are building approvals falling? Because the tax system makes it too easy for developers to hoard residential land without developing it, too easy for owners of vacant lots to leave them vacant, and too easy for owners of derelict buildings to board them up instead of repairing them and offering them

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-90277066599609212732008-01-31T00:59:00.000+11:002008-01-31T16:24:31.273+11:00Alternative Economic Review No. 4

The global economic crisisfrom a non-neoclassical viewpoint January 2008 Editorial: Will we all be Keynesians again? As a U.S. recession looks more and more like a done deal, many will argue that this is a great time for America to invest in public infrastructure: railways, bus services, roads, water supplies, underground electrical and communications cables, sewerage, drainage, schools

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-79157903938773704562008-01-26T00:35:00.000+11:002008-01-26T01:16:33.256+11:00Neutralizing stamp duty and development levies

It is appropriate that the surge in Melbourne home prices has rekindled debate on conveyancing stamp duty, but not so appropriate that the discussion has focused on the size of the duty instead of its base. Reducing the size of the duty must have a budgetary impact, but changing its base need not. Stamp duty is a transfer tax on the total value of a property including the building(s) and the

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-86375194109596561882008-01-23T19:50:00.001+11:002008-04-01T17:15:31.611+11:00Right and wrong ways to abolish taxation

One Salient Oversight has proposed a "Zero Tax Economic System", which he explains as follows: All taxes are removed... The government creates the money it needs via seigniorage (printing money). The Central bank then controls inflation by increasing the Reserve requirement of bank deposits... The proposal was picked up and debated at Angry Bear and later at Megan McArdle, where both

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-67126365317644998042008-01-22T11:42:00.000+11:002008-01-22T11:55:41.839+11:00Flesh on the anti-inflation bones

G'day, Prime Minister. The first thing I noticed about your 5-point anti-inflation plan is that you need to turn off the autocue and leave it off. The second thing I noticed is that the plan is light on detail. Perhaps I can flesh it out a bit. (1) Compliance costs feed into prices. To reduce compliance costs, you could (a) turn the GST into a retail tax, and (b) replace the 9%

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-28711644556534505332008-01-21T13:18:00.002+11:002008-03-17T00:16:06.646+11:00Mutual obligation for property bludgers

Responding to Demographia's unflattering survey on housing affordability ("High prices end Australian dream", the Age, Jan.21), the Property Council of Australia repeats the usual demands that State governments cut developer taxes, release more land and reduce red tape. No amount of tax-cutting will stop developers from reaping the uplifts in land values caused by permission to develop and by

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-21025553919289291692008-01-20T01:47:00.001+11:002008-01-20T01:51:24.013+11:00Housing as a capacity constraint

The Treasury's response to the alleged labour shortages in Queensland and Western Australia ("Reforms to extend boom", Weekend Australian, Jan.19) understates the significance of housing affordability. Workers who move to Qld and WA not only fill job vacancies but also drive up rents and prices of housing. Moreover, as the additional workers will themselves create jobs, the movement of workers

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.comtag:blogger.com,1999:blog-19616592.post-37031337842409991012008-01-17T02:01:00.000+11:002008-01-17T02:02:31.335+11:00Trade deficit requires reform of tax and super

If Trade Minister Simon Crean wants to end Australia's trade deficit ("Crean vows to act on trade deficit", The Age, Jan.11), he will need help from the Treasury, Finance and Health portfolios. One cause of the trade deficit is the 9% employer-funded superannuation contribution, which feeds into export prices but has little effect on import prices. A 9% employer-funded contribution is equivalent

GRPhttp://www.blogger.com/profile/03082356634804690840noreply@blogger.com