Corrections to “Miners moan, but we need our fair share”

Review of Ross Gittins, “Miners moan, but we need our fair share,” Sydney Morning Herald, August 14, 2010. The key message of the piece is:

It’s not hard to see why miners would object to paying more tax, but the tax was recommended by the Henry tax review and it is hard to see why these eminent economists would advocate a tax that could damage the economy.

The very reason for levying a tax on the “economic rent” derived from mining (that is, on the “super-normal profit” earned in excess of the “normal profit” needed to keep the mining companies’ resources employed in the mining business) is to ensure the tax does not discourage mining activity.

The three main errors are:

  1. Eminent “economists” often advocate damaging policies due to economic ignorance. A glimpse through history will tell you that, no matter your ideological position.
  2. No attempt is made to establish how taxation is justified from a property rights point of view. Are you really claiming that all land is government land, and they just licence it to the people? If so, please explain how government originally acquired that right.
  3. There is no such thing as neutral taxation, as Murray Rothbard explained brilliantly and briefly here (pp. 919-27 and, even shorter, pp. 1244-45), and, at length, here.
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