It seems crazy that in a time of increasing obesity and poor nutrition that we still tax basic raw food. So people keep consuming highly processed junk which they claim is cheaper than good old fruit and vegetables.

A food researcher from Massey University has asked for GST to be removed from fruit and vegetables.  This is a step in the right direction at least. It will not cause a sudden shift in diet…let’s face it it’s hard to come off a high sugar and salt diet but at least it will start to compete on price terms.

How the government can continue to justify this tax is beyond me. But given that the whole tax system is dysfunctional that is hardly a surprise.

Another sensible policy proposal out of Wellington. I blame the weather myself. The sunshine must be sending rays of optimism and clarity of thought into the capitals’ thinking tanks.

First it was Arthur Grimes from Motu and now Adolf Stroombergen from Infometrics. Adolf raises the idea of a flat tax and a guaranteed minimum income (GMI). The concept of a GMI has been around for a long time but it’s good to see it mentioned alongside tax reform.

Last year Charles Murray, co-author of the Bell Curve, came out with a similar proposal based on a basic income and dismantling of the welfare state. There has been plenty of commentary around “In Our Hands” but it is a sign that policy analysts are starting to realise that our current fiscal arrangements are sorely in need of attention.

Coupled with the fact that monetarism is dead in the water it leads me to believe that we are on the cusp of a major evolution in our economic structures. Also it should be noted that none of these proposals are original in thought although perhaps in detail.

Students of financial history will know that many good ideas have fallen by the wayside or been ignored but eventually they will come to the fore. We have a land tax proposed, GST reform, income tax lowered or abolished and a universal income. Well hey now things are starting to come together.

What we need now is serious analysis into these types of proposals. Anyone interested?

Yesterday Arthur Grimes, the Reserve Bank Chairman, raised the possibility of a Land Tax to help lower Income Tax as well as a rise on GST.

I’m stunned. It’s rare that proposals like these ever see the light of day and even then receive due merit and attention. It’s a fabulous idea as those who have been advocating this for many years an attest to. It’s good to see it has been picked up on some local blogs.

The concept of taxing resources and consumption as opposed to labour is extremely sound and progressive. This approach has major benefits in several areas: social, economic and environmental.

It does not penalise work, it promotes it.

It is easy to collect and probably easier to monitor.

It focuses attention on consumption and management of resources which we know will be a challenge in the future.

It promotes the efficient allocation of land. A common tactic in many cities has been to sit on vacant land in order to drive rents higher. A Land Tax may deter this type of hoarding.

Whilst it is unlikely to make much headway now it is hopefully the start of a bigger debate on how we should raise revenue for the government.

Sooner or later people may realise that the government can simply raise revenue by issuing interest free money but that’s probably for another day

Any land tax reformers out there please make yourself known.