Taxation and the common law are strangers. Taxation is not part of property law. It is the raising of an unsecured debt by the Crown against a contributor who is deemed to have given his consent through his representatives in the Commons. Pitt the Elder's speech on the American Revolution explains this. As for capitalising pension rights funded by taxes, this is unworkable since people can decide not to have babies to pay for other people's pensions or move their capital or labour out of the jurisdiction. What does matter is the deadweight loss of taxes on labour and capital. There is no deadweight loss if adult children voluntarily support their aged parents or relatives. That was the "pay as you go" plan of Nature before Bismarck. It would be sensible to allow unlimited income transfers and means test people out of the aged pension accordingly. The tax system fails to recognise voluntary income redistribution and thereby substitutes inefficient public redistribution far more than is really needed. So people having babies are producing taxpayers for others and meanwhile being taxed to keep pensioners in asset test free homes they themselves can't afford to buy to house their growing families. There is actually perverse redistribution in the current pay as you go tax-funded age pension.
I do not think “ownership” is a very useful way to evaluate the different kind of retirement income systems. One important dimension is how progressive the distribution scheme is wrt working life income. The other is, does the income distributed come from less consumption or less investment. One might praise/criticize the redistributive aspect of a pay-as-you-go system while criticizing/pausing it for taxing consumption/ income(part of which would have been saved)
Dear Cameron
Taxation and the common law are strangers. Taxation is not part of property law. It is the raising of an unsecured debt by the Crown against a contributor who is deemed to have given his consent through his representatives in the Commons. Pitt the Elder's speech on the American Revolution explains this. As for capitalising pension rights funded by taxes, this is unworkable since people can decide not to have babies to pay for other people's pensions or move their capital or labour out of the jurisdiction. What does matter is the deadweight loss of taxes on labour and capital. There is no deadweight loss if adult children voluntarily support their aged parents or relatives. That was the "pay as you go" plan of Nature before Bismarck. It would be sensible to allow unlimited income transfers and means test people out of the aged pension accordingly. The tax system fails to recognise voluntary income redistribution and thereby substitutes inefficient public redistribution far more than is really needed. So people having babies are producing taxpayers for others and meanwhile being taxed to keep pensioners in asset test free homes they themselves can't afford to buy to house their growing families. There is actually perverse redistribution in the current pay as you go tax-funded age pension.
Kind regards
Terry Dwyer
If you're updating the working paper, the URL on the Myer (2021) reference is incorrect.
Thank you. I've updated it.
I do not think “ownership” is a very useful way to evaluate the different kind of retirement income systems. One important dimension is how progressive the distribution scheme is wrt working life income. The other is, does the income distributed come from less consumption or less investment. One might praise/criticize the redistributive aspect of a pay-as-you-go system while criticizing/pausing it for taxing consumption/ income(part of which would have been saved)