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Archives for: June 2005

The London Water Fiasco

by frowningstreet @ 2005-06-29 - 15:25:26

Isn't is remarkable, 2000 years after Roman rule we have our glorious Mayor of London telling us NOT to flush our toilets. One of the few things the Romans did was to provide running water and sanitation. Now we are told that to save water, not to use them.

And at the same time, new water meters to be installed. But most of us already have water-board meters, so do we sense another meter, for possibly another tier of charging?

There may well be a water shortage, and asking people to reduce their consumption is sensible, but folk should remember two things :

a) You already pay over the odds for your water, both direct to the water companies, and also to the council in the council tax.

b)The bulk of wasted water is due to the water companies themselves.

We need to better at fixing problems, rather than picking off easy targets and pretending they are solutions. It's not hard to imagine a culture of reporting your neighbour for using a hose-pipe, or excessive flushing. Maybe the famed GATSO cameras may be making an appearance in a new guise shortly.

Beware of environmental arguments that are little more than revenue generation strategies.

Tax this, tax that , tax the other

by frowningstreet @ 2005-06-19 - 12:43:08

Has anyone noticed the ludicrous amount of taxes that we seem to pay everywhere? I am not against the principle of taxation, but in today's world, we have become acustomed to expecting anything that might be taxable, to be taxable.

Taxes exist to redistribute wealth -- and originally, this purpose at national level was to ensure that a country could build and maintain an army. Essentially it's a protection scheme. As civilisation progressed, the 'state' undertakes more and more projects for the welfare of people, and these need to be funded.

This is all pretty good, as left unchecked, in a pure capitalist society, eventually someone ends up with the majority of resources, and then they achieve an effective monopoly. All of a sudden, our freeedom has gone, an overlord has arrived, and the differences between communism (state control) and capitalism become blurred. The state has simply become owned by the monopolist.

So taxes exist to redistribute wealth. Left to themselves, people wouldn't contribute enough money to the various causes that are required. It's essentially a feedback system. You tax someone a percentage of their income (or wealth) , and that money flows back into the system for the benefit of everyone. A dynamic stability is achieved.

But from the germ of a simple idea, comes the modern reality of taxing everything in a ferociously complicated way. And of course subsidies are negative taxes -- being negative doesn't make them any better either.

Taxes should be simple,efficient and equitable. Each new tax to be introduced and fiddled with represents an imperfection in an existing system. Yes we can fix it with a tax here, a subsidy there and an exemption over there. But it's probably worth looking a little deeper at the problem to find a better solution : maybe if we remove some other taxes, we can replace them all with something really simple?

The ancients studied astronomy with the aid of clockwork models of the planets and moons. As they discovered new problems with the observed motions, they simply added more gear wheels and elaborate engineering. New astronomers actually served their apprenticeship by studying the machinery, NOT the stars!

The reality was that we could replace all the clockwork with a much simpler system -- putting the sun at the centre.

But this was seen as heresy, it took ages to move to a better system. And the same I fear is true about taxes.

Goody, another tax !

by frowningstreet @ 2005-06-18 - 12:17:19

Isn't the new proposed road-pricing tax wonderful? What is amazing is the accuracy of the numbers they throw out -- from 2p on rural roads upto £1.34 for inner cities. Surely at this stage it is the concepts that are being discussed, but when you see numbers of such spurious accuracy, one wonders how much has already been decided...

But what is the purpose ? To reduce congestion or to raise revenue? I would argue that you have to focus on one of these issues, not both. You can only serve one god well.

The problem is that the Government raises an enormous amount of money from the existing wonderful petrol tax, and it's certainly not all spent on roads. So any new scheme is going to have to raise at least as much money to keep the money flowing in, otherwise we'll need more tax elsewhere.

And if congestion is genuninely reduced, then there will be less cars, so less money.

And of course, the new scheme would need special technology, which would have to be paid for by somebody -- that's us !

Suppose your car does on average 50mpg -- and there are plenty of cars out there that do.

Suppose you drive only on the '2p rural roads'.

For your gallon, you are going to pay 50x2 or £1 in road-pricing.

Lets say petrol costs 90p a litre, and there are 4.5 litres to a gallon. So to break even you need to see petrol reduced in price by 22p a litre , or 68p a litre...

Of course most of us will be on roads costing much more than the 2p rural rate. At 10p a mile and 50mpg, they would have to pay you 20p a litre as a subsidy!

For the more luxurious 20mpg gas guzzlers, 10p road pricing on average would need petrol at 46p a litre. Highly unlikely, it's not that cheap in France.

Two things are very clear :

a)This is about raising money.

b)It penalises people who drive economical cars.

Time for the government to decide which god to serve!

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