Manifesto, edition 66.

Alison’s Manifesto, January 2017.

I wrote the first edition of this manifesto in 1988, as a draft for a party manifesto. I decided to keep it as a summary of my own opinions. This is the current British edition. The last New Zealand one, edition 50, is at ammpol.wordpress.com/ammamz.

1.  Environmental protection as top priority
ahead of full employment, low inflation, or economic growth.  Green taxes or quotas should be used to include the costs of resources and pollution in prices. Nuclear power and weapons and genetic engineering are potentially devastating technologies which should be severely restricted.  Genetically modified crops are incompatible with organic farming.

2.  Full employment.

Work should be allocated by self-selection not compulsion. If work doesn’t pay, there isn’t much self-selection. If it does, then wages could be allowed to adjust to the level at which the supply of labour matched the demand.

The total amount withdrawn from an individual’s benefits plus their income tax should ideally not add up to an effective marginal tax rate which is higher than the top tax rate paid by people with high incomes. The most efficient way of keeping effective marginal tax rates down to the same level as the top tax rate is to have Citizens Incomes which are not income tested, and to tax all income at the same rate.

3.  Citizens Incomes for all adult citizens and some children
for more effective sharing of wealth, and to support voluntary unemployment, economic independence for women, and childcare including the work of full-time mothers at home.  To restore the incentive to work and save, the Citizens Income should be paid regardless of other income, as negative tax to wage and salary earners, and to replace most benefits for non-earners.

Two children per mother should be entitled to these Citizens Incomes.  Any further children would not be eligible for Citizens Incomes until they reach school-leaving age.

4.  Intervention to ensure that adequate housing, education, and health care are available to all.

5.  Tax reform: resource taxes.

Either VAT or income tax should be abolished and replaced with revenue from resource taxes or quotas.  It is an unnecessary duplication of administrative effort to have both income tax and VAT.  Citizens incomes can be used, as negative tax, to make the tax system progressive.

The potential market price of scarce natural resources should be taxed at a rate at least as high as income tax or VAT, after subtracting the cost of extraction and processing.  The potential market price is the actual market price including the resource tax, or the marginal cost, whichever is greater. The marginal cost per unit of resource is the cost per unit of increasing extraction or imports of that resource or the preferred substitute.

If scarce resources are taxed there is a stronger incentive for users to reduce consumption, or a weaker incentive for suppliers to promote it, and taxpayers get a share of the profits.  Suppliers and consumers still have an incentive to use the cheapest sources if the tax rate is flat and less than 100%.

6.  Tax reform: land value tax.

Land, like other scarce natural resources, should be taxed. As a percentage of the capital value of the land, land tax should be kept within the same range as interest rates, so that no more than half of the annual value is collected as tax.

This increase in land tax should be phased in over a period of 10 years or more, so that its effect is to reduce future capital gains rather than current land prices. There should be exemptions from land tax for ancient woodland and wetlands.

An assets tax like this is time-consuming and costly to administer, and may only be worthwhile for irreplaceable essential assets, such as land.  Manufactured goods are usually sold at cost-plus prices and have limited speculative potential.  There may be speculation in luxury assets, but only connoisseurs and gamblers need be involved.

7. Price stability.

Monetary policy should aim for long-term price stability, while allowing for inflation when an increased money supply or negative real interest rates are needed to maintain adequate demand, with compensatory deflation at other times, with real interest rates high enough to keep nominal interest rates positive.

Inflation targeting should distinguish between different forms of inflation, in imports, asset prices, or other domestic inflation.

The inflation component of interest should not be taxed.  High interest rates have caused a lot of trouble, and it has been unfair and illogical that some income has been taxed heavily, while many capital gains have been tax-free.  Saving and investment have been discouraged, and speculation has been favoured.

8.  International relations.

International co-operation is necessary to prevent excessive concentration of wealth, and every nation should aim to be a reluctant follower rather than a leader when paying subsidies, reducing taxes or making other concessions to favour business.

9.  Electoral reform.

I prefer the single transferable vote (STV) system, which gives power to voters, rather than the mixed member proportional (MMP) or first past the post (FPP) systems, which give power to political parties.  Party lists can be included as options on the STV voting paper, as a compromise between Irish STV, which doesn’t have party lists, and German MMP, in which they are unavoidable.

Further Reading:

Environment.
1. Ross Gelbspan, The Heat is Online.
2. “Genetic modification”, ammpol.wordpress.com/gm.
3. “Environment”, ammpol.wordpress.com.

Economy.
1. “Boom and bust” and “Monetary policy”, ammpol.wordpress.com.

Basic (Citizens) Incomes.
1. Basic Income Earth Network, basicincome.org.
2. “Welfare reform for the 21st century”,
ammpol.wordpress.com/ammwr/.

International relations, trade, and defence.
1. “Protectionism”, in ammpol.wordpress.com/ammsec.
2. P. Grim, T. Kokalis, A. Tafti, and N. Kilb, “Imperfection and Cooperation”, in “Evolution of Communication in Perfect and Imperfect Worlds”, from World Futures: The Journal of General Evolution 56 (2000), www.pgrim.org/pgrim/evolution.htm.