A Clean Sheet for Tax and WelfareOur initial work was inspired by James Robertson, who in a briefing "Transforming Economic Life" proposed a radical alternative to our current tax system. We have taken this as the influence for our baseline of systemic fiscal reform as the evidence we have found supports the claims that it solves economic cycles ('boom and bust') and provides a fair and real solution to the challenges of poverty and welfare.
Please read our SFR Policy Briefing for an overview. The simple question someone in the UK could ask yourself is: "Would you like to give the UK a £100bn a year boost to the economy while simultaneously tackling climate change and poverty?"
Policy Pathways: Practical Steps
There is an insane gulf between our current economic system and the alternative above that has so much to offer, yet we are still with the inferior system. We asked "why?". The answer can be put quite simply as: "a mix of convenience, clumsy implementation, good intentions and vested interests".
The good news is that now that we understand both the benefits of transformation and how the system has so far worked, we can formulate some innovative "game changers" to deliver the benefits without the pain and, most importantly, without a large proportion of the population being out of pocket.
Land Value Covenants (revenue neutral going positive)
During our research, we discovered a plethora of examples of the use property value and levies, such as S106 payments, as a way to finance (usually inadequately) items ranging from infrastructure and community facilities (S106, plus council tax, plus central government grants), to retirement income (equity release) and general tax revenue (inheritance tax and stamp duty).
Most proposals to deal with this bluntly add Land Value Tax into the system but without causing a massive upheaval which, as happened in 1909, will have many winners and losers.
Instead, we have an elegant approach using Land Value Covenants which is revenue positive to both the government and the tax payer!
Local Mortgages (revenue positive: up to £50bn today)
Another, currently being worked on looks at another 'captured' public right, the right to create money. We have discovered that most mortgage interest is supranormal profits due to this privilege, and is what has enabled many banks to return to massive profit so quickly. We are investigating policy options for re-capturing revenues in the region of £50bn per annum, for public benefit instead of massive sponsorship deals!
Phasing out VAT (revenue neutral, flexible level)
VAT is one of the 'trans-taxes': a highly bureaucratic drag on enterprise as a clumsy way of collecting revenue, which creates massive administrative and enforcement costs. It is best replaced with resource taxes, primarily by a revenue neutral switch to carbon tax.
We have assessed the tax incidence (as opposed to the prevailing "flypaper theory of tax incidence" and the "newspaper theory" of tax incidence), to propose practical ways to eliminate VAT and the Climate Change Levy from the energy markets. We believe it is highly practical to follow Ireland and France in implementing a moderate carbon tax, with two key benefits:
- reduced administration and compliance
- improved prospects for green investment by creating a far more stable market than current trading schemes such as ROCs and ETS permits.
For more information please contact us.
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The SFR Group. Who Are We?
The Systemic Fiscal Reform Group (SFR
Group) is a Cambridge based Think Tank studying
existing and alternative tax and welfare structures, their impact on
the efficiency and stability of the economy, and practical ways of
implementing them.
It was founded in 2008 by:
- Neale Upstone - Software Engineer and LibDem Councillor
- Robin Smith - Social Entrepreneur. Conservative
Councillor, Engineer
- Dr. Adrian
Wrigley - Inventor, writer and market trader
It is operated on a voluntary basis without any
external funding.
Our Blogs Only our personal views, not necessarily our group views. Robin Smith - Single Taxism
SFR Articles NEF's Green New Deal In Houston We've Had a Problem, Neale Upstone discusses why a Green New Deal is not the long-term answer to our problems. What to do about the property crash In a (soon to be published) new article, What To Do About The Property Crash, Neale Upstone argues for a systemic, future-looking solution to our housing difficulties. A look at how the unreal economy has usurped natures ability to supply all
Robin Smith offers a Proposal for Economic Reform, the real economy in the necessities of life and how out thinking has allowed us to take for granted the land, without which no wealth can be created The Law of Privilege What happens when you place state granted privileges before justice. Robin Smith asks if Economic Privileges Are Crippling the Economy
How SFR addresses housing and social mobility In a speech in Sept 2008, Dr Adrian Wrigley set out Systemic Fiscal Reform and how it addresses Housing and Social Mobility.
Read the full text of his speech here:
Taxation, Housing and Social Mobility at LibDem Conference Liberal Themes of Systemic Fiscal Reform
SFR - A Policy for Liberal Democrats?
News
Strategy Options for Implementing LVT
What are the options and their related issues
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