Dr Chapman's Work-Speading Tax will be redistributive in relative
terms at least. It will increase the demand for labour at the bottom
of the labour market and so increase low-end wage rates.
There are arguments based on the notion of "market failures" that would
support redistribution. For example the affluent are causing much more
than their "fair share" of pollution. But when the polluter does not
pay the full cost of pollution there is a market failure. Such
considerations support IPPR's proposals for green taxes.
Mainly I see our proposals on VAT as another possibility for using
strong market based mechanisms to create employment. And as such very
much part of the Employment-Through-Market-Mechanisms club that
includes Dr Chapman's WST and IPPR's green taxes.
I would also include Citizen's Income as a member of this club, even
though it's emphasis appears to be more on human rights than on
markets: It does, after all, allow the low-paid to work for less and
increase the demand for their labour.
I have no very great preference for any of the ETMM Club members - they
all have great advantages over the market failure that is unemployment.
Our particular proposal was formulated partly because it was capable of
some economic analysis and partly because there may be some political
advantage in using an expenditure tax. We think we can truthfully say
the following: "This scheme increases employment, and so reduces the
cost of unemployment benefit, there is a reduction in overall tax. So
the introduction of this scheme would simultaneously increase
employment and reduce taxation."
A fuller version of our proposals can be found on http://www.faxfn.org/
under "Taxation and Jobs".
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