.. is at the root ...
.. of *lots* of sheer evil ...
.. time to dump all such error
Musing: Before opining, start by self-informing/refreshing.
From my archives, 1st 'other' mention:
March 26 2003
« ... comes from the Government's little-noticed "petroleum resource rent tax", imposed on Bass Strait and other oil. The cost of extracting Australian oil from the ground doesn't change when the world price of oil rises so, since the oil really belongs to all Australians, the feds have long used their resource rent tax to grab 40 per cent of any windfall gains.»
[smh/Gittins, no URL]
Comment: It's not only the AusBC who deploys inappropriate language; note 'grab' and 'windfall.' IF we need taxes THEN they have to come from somewhere; taxes are levied. Under a properly functioning democracy with an honestly informed and fully engaged electorate etc., tax sources would be democratically determined. Further, taxing resource rent is not a 'windfall gain,' it is a *necessary* justice.
From my archives, 1st blog mention:
Monday, 19 July 2004
« ... Economics distinguishes between two types of profit. The first is normal profit, defined as the opportunity cost of a business, the minimum amount necessary to attract a business to an activity, and to induce the business to remain in it. Normal profit is defined ... as the level of profit (giving some 'acceptable' return on capital.) Any profit over that amount is defined as excess profit, or economic rent.»
[quoted by self; possibly some wiki at time of writing]
Comment: An alternate name for 'excess' profit is 'super,' yet another: 'abnormal,' finally 'unearned income.'
Now, some recently reviewed wikis (aka some DIY activity):
A good way to illustrate 'resource rent' is to look at Iraq; it has long been accepted, that the 'production cost' of a barrel of Iraqi oil is about $US1, and one assumes that that's the all-up cost including exploration, drilling, pumping & a 'reasonable' profit on the whole lot. In contrast, the current selling price for oil being (say) $US81, the 'resource rent' is 81 - 1 = 80. *It's a lot*, and by definition, all 'unearned' income. (n. income from investments etc. rather than from working [POD]) Q: What 'investment,' here? A: War, aka US, UK & Aus illegal invasion, now morphed into brutal occupation.
One question is Q: Whose (bloody!) oil is it; one A: It's Iraq's 'patrimony' (GWBush, aka the devil himself). Sooo, if all are agreed - and that is the thrust of all the above 'theory' - that (now in general), IF any minerals belong to the sovereign people (they do), THEN next Q: Who should benefit from the resulting resource rent?
A: Silly question, but if any doubt still remains:
«Hartwick's rule - often abbreviated as "invest resource rents" - requires that a nation invest all rent earned from exhaustible resources currently extracted, where "rent" is defined along paths that maximize returns to owners of the resource stock. ... A positive value for a nation's genuine savings has been linked to the possibility of long-run economic sustainability.»
Comment: Note that if dividends arising from resource rent somehow go missing and/or o/s, then Hartwick's rule will have to be satisfied by some other source/process (yet *another* tax?)
Two other items of interest:
Petroleum Resource Rent Tax (PRRT) and Crude Oil Excise and Royalties; note the target audience those items were constructed for.
A penultimate quote:
«"I am prepared to concede that all taxes, with the exception of those on economic rent have some [adverse] effects on employment and economic growth." John Howard, 10/12/1991 – p15 AFR»
[(.pdf) URL is (almost) irrelevant; the quote is 'real.']
Comment: My own archive copy does not have the [square brackets] around 'adverse.' Whatever and in any case, for 'pedantic accuracy,' note that Howard effectively said:
"taxes ... on economic rent have *NO* effects on employment and economic growth."
Now, for something completely different:
«Opposition Leader Tony Abbott says he cannot see how the Coalition could back the Government's move to put a 40 per cent tax on mining profits.
Mr Abbott has given his strongest indication so far that the Opposition will block the tax after meeting with senior mining executives in Canberra today.»
Comment: The reader may evaluate the 'master/apprentice' collision.
Fazit: Of course most miners and some shareholders will squeal. But both might reflect that a) there's no such thing as a 'free lunch,' and b) the Aussie people should benefit 101% from their own resources - Oh, always assuming we're interested in justice, that is.
PS As a take it or leave it BTW; disclosure: I am *not* a professional economist (nor am I a paedophile priest; the statements could be considered in some ways equivalent...)
erring ideology ...
(that resisting resource rent taxes, say)
.. is at the root ...