Land Value Taxation will solve many of the 21st century's most serious social, economic and environmental problems, and promote justice, fairness and sustainability. We CAN have a world in which all can prosper.
Progress and Poverty, by Henry George Here are links to online editions of George's landmark book, Progress & Poverty, including audio and a number of abridgments -- the shortest is 30 words! I commend this book to your attention, if you are concerned about economic justice, poverty, sprawl, energy use, pollution, wages, housing affordability. Its observations will change how you approach all these problems. A mind-opening experience!
Henry George: Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy This is perhaps the most important book ever written on the subjects of poverty, political economy, how we might live together in a society dedicated to the ideals Americans claim to believe are self-evident. It will provide you new lenses through which to view many of our most serious problems and how we might go about solving them: poverty, sprawl, long commutes, despoilation of the environment, housing affordability, wealth concentration, income concentration, concentration of power, low wages, etc. Read it online, or in hardcopy.
Bob Drake's abridgement of Henry George's original: Progress and Poverty: Why There Are Recessions and Poverty Amid Plenty -- And What To Do About It! This is a very readable thought-by-thought updating of Henry George's longer book, written in the language of a newsweekly. A fine way to get to know Henry George's ideas. Available online at progressandpoverty.org and http://www.henrygeorge.org/pcontents.htm
Where Else Might You Look?
Wealth and Want The URL comes from the subtitle to Progress & Poverty -- and the goal is widely shared prosperity in the 21st century. How do we get there from here? A roadmap and a reference source.
Reforming the Property Tax for the Common Good I'm a tax reform activist who seeks to promote fairness and reduce poverty. Let's start with the enabling legislation and state requirements for the property tax. There are opportunities for great good!
"The Lord's Prayer says, Give us this day our daily bread. Our
daily bread comes from the land. No man made the land. It is God's
gift to mankind. It belongs to all men. Therefore individual
ownership of land is wrong. Individual control of the fruits of the
land is wrong."
The only point where I do not find myself in complete accord (and
that is perhaps more due to your comparative silence than anything
else) is that I attach relatively more importance to the initial
injustice done by the permitted monopoly of raw material in a few
hands. It seems to me that individualism, in order to be just, must
strive hard for an equalisation of original conditions by the
removal of all artificial advantages. The great reservoir of natural
wealth that we sum up as land (including mines, etc.) ought, it
seems to me, to be nationalised before we can say that the
individual is allowed fair play. While he is thwarted in obtaining
his fair share of the raw material, he is being put at a
disadvantage by artificial laws.
—Grant Allen, Letter to Herbert Spencer, 1886, in "Grant Allen, A
Memoir," by Edward Clodd.
Duke of Suffolk (reading petition): What's here? "Against the
Duke of Suffolk for enclosing the commons of Hebford." How now, sir
Petitioner: Alas, sir, I am but a poor petitioner of our whole
—Shakspere, Henry VI., Second Part, Act 1, Scene 3.
The soil was given to rich and poor in common. Wherefore, O ye
rich, do you unjustly claim it for yourselves alone?
—Hildebrand, Pope Gregory the Great.
(See also March 11)
Hmmm. Googling this, it appears to be from St. Ambrose. (See December 21 for another):
Upton Sinclair, ed. (1878–1968). The Cry for Justice: An Anthology of the Literature of Social Protest. 1915.
The Voice of the Early Church. V.
By St. Ambrose
HOW far, O rich, do you extend your senseless avarice? Do you intend to be the sole inhabitants of the earth? Why do you drive out the fellow sharers of nature, and claim it all for yourselves? The earth was made for all, rich and poor, in common. Why do you rich claim it as your exclusive right? The soil was given to the rich and poor in common—wherefore, oh, ye rich, do you unjustly claim it for yourselves alone? Nature gave all things in common for the use of all; usurpation created private rights. Property hath no rights. The earth is the Lord’s, and we are his offspring. The pagans hold earth as property. They do blaspheme God.
If, then, successive generations of men cannot have their fractional
share of the actual soil (including mines, etc.) how can the
division of the advantages of the natural earth be effected? By the
division of its annual value or rent; that is, by making the rent of
the soil the common property of the nation. That is (as the taxation
is the common property of the State), by taking the whole of the
taxes out of the rents of the soil, and thereby abolishing all other
kinds of taxation whatever. And thus all industry would be
absolutely emancipated from every burden.
— PATRICK EDWARD DOVE, Theory of
Human Progression (1850), Chap. III., Sec. 3.
"Yes, ah yes, there is frightful misery in the world," answered
Gabriel tenderly and sadly. "Yes, many of the poor, cut off
from all joy, all hope, are cold and hungry and in want of shelter
and raiment, in the midst of the immense riches which the Creator
has provided, not for the happiness of a few, but for the happiness
of all, for his wish was that they should be equitably divided — but
a few have acquired the common inheritance by fraud and violence."
— EUGENE SUE, The Wandering Jew,
Part XVI., Chap. 34.
God has ordered all things to be produced, so that there should be
food in common to all, and that the earth should be a common
possession to all. Nature therefore has produced a common right for
all, but greed has made it a right for a few.
— ST. AMBROSE, On the Duties of
the Clergy (A. D. 391), Chap. XXVIII., Sec. 132. Nicene and
Post-Nicene Fathers, Vol. X., p. 23.
The Creator has made ample provision for all men in the storehouse
of nature and in the faculties and powers of man. To do God's will,
we must make room at the Father's table for all His children.
— FATHER EDWARD McGLYNN, Lecture
on the Fatherhood of God and Brotherhood of Man.
The ground was in common and no part of it was the permanent
property of any man in particular; yet whoever was in occupation of
any determined spot of it, for rest, for shade or the like, acquired
for the time a sort of ownership, from which it would have been
unjust and contrary to the law of nature to have driven him by
force; but the instant that he quitted the use or occupation of it
another might seize it without injustice.
— SIR WILLIAM BLACKSTONE,
Commentaries, Book II., Chap. I, p. 3.
He may, and often he does, engross the first necessity of labor,
land, and neither use it himself or allow anyone else to use it, and
though it is clear that . . . he is injuring the community, the law
is sternly on his side.
— WILLIAM MORRIS, Signs of Change,
Land should be given to those who can use it.
— JOHN RUSKIN, Fors Clavigera,
Part II., Letter ii, p. 96.
A sig-file on a listserv brought to my attention a quote from St. Ambrose, which, to my surprise, Ernest Crosbydidn't include in his Earth-for-All Calendar:
"You are not making a gift of what is yours to the poor man, but you are giving him back what is his. You have been appropriating things that are meant to be for the common use of everyone. The earth belongs to everyone, not to the rich."
In the very first pages of Scripture we read these words: "Fill the
earth and subdue it."(19) This teaches us that the whole of creation is
for man, that he has been charged to give it meaning by his intelligent
activity, to complete and perfect it by his own efforts and to his own
Now if the earth truly was created to provide man with
the necessities of life and the tools for his own progress, it follows
that every man has the right to glean what he needs from the earth. The
recent Council reiterated this truth: "God intended the earth and
everything in it for the use of all human beings and peoples. Thus,
under the leadership of justice and in the company of charity, created
goods should flow fairly to all." (20)
All other rights, whatever
they may be, including the rights of property and free trade, are to be
subordinated to this principle. They should in no way hinder it; in
fact, they should actively facilitate its implementation. Redirecting
these rights back to their original purpose must be regarded as an
important and urgent social duty.
The Use of Private Property
"He who has the goods of this world and sees his brother in need and
closes his heart to him, how does the love of God abide in him?" (21)
Everyone knows that the Fathers of the Church laid down the duty of the
rich toward the poor in no uncertain terms. As St. Ambrose put it: "You
are not making a gift of what is yours to the poor man, but you are
giving him back what is his. You have been appropriating things that are
meant to be for the common use of everyone. The earth belongs to
everyone, not to the rich." (22) These words indicate that the right to
private property is not absolute and unconditional.
No one may
appropriate surplus goods solely for his own private use when others
lack the bare necessities of life. In short, "as the Fathers of the
Church and other eminent theologians tell us, the right of private
property may never be exercised to the detriment of the common good."
When "private gain and basic community needs conflict with one another,"
it is for the public authorities "to seek a solution to these
questions, with the active involvement of individual citizens and social
The Common Good
certain landed estates impede the general prosperity because they are
extensive, unused or poorly used, or because they bring hardship to
peoples or are detrimental to the interests of the country, the common
good sometimes demands their expropriation.
Vatican II affirms
this emphatically. (24) At the same time it clearly teaches that income
thus derived is not for man's capricious use, and that the exclusive
pursuit of personal gain is prohibited. Consequently, it is not
permissible for citizens who have garnered sizeable income from the
resources and activities of their own nation to deposit a large portion
of their income in foreign countries for the sake of their own private
gain alone, taking no account of their country's interests; in doing
this, they clearly wrong their country. (25)
Those interested in Catholic Social Thought should look for a new book which came out of a 2007 conference held at the University of Scranton, and edited by Professor Kenneth R. Lord of UScranton, entitled "Two Views of Social Justice: A Catholic/Georgist Dialogue." The version I've seen is the October, 2012, issue of The American Journal of Economics and Sociology, and I understand that it will be made available in other forms as well.
The abstract for the book:
Sixteen scholars have come together in this issue to examine eight social-justice themses from the perspectives of Catholic Social Thought and the philosophy of Henry George. The themes they address are natural law, human nature, the nature of work, the nineteenth-century papal encyclical Rerum Novarum, causes of war, immigration, development, and wealth, and neighborhood revitalization. While they sometimes wrangle with each other, their common aspiration is the same as their nineteenth-century predecessors,: to find solutions to the human suffering caused by injustice.
The use of a certain area of the earth's surface is a primary
condition of anything that man can do; it gives him room for his own
actions, with the enjoyment of the heat and the light, the air and
the rain which nature assigns to the area; and it determines
his distance from, and in a great measure his relations to, other
things and other persons. We shall find that it is this
property of "land" which, though as yet insufficient prominence has
been given to it, is the ultimate cause of the distinction which all
writers on economics are compelled to make between land and other
— PROF. ALFRED MARSHALL, of the
University of Cambridge,
Principles of Economics, Vol. I., Book 4,
Chap. 2, Sec. I.
The doctrine that land can become the private property of one is a
doctrine morally repugnant to the Bantu. The idea which is today
beginning to haunt Europe, that, as the one possible salve for our
social wounds and diseases, it might be well if the land should
become again the property of the nation at large, is no ideal to the
Bantu, but a realistic actuality. He finds it difficult, if not
impossible, to reconcile his sense of justice with any other form of
— OLIVE SCHREINER, Stray Thoughts
on South Africa, Fortnightly Review, July, 1896, p. 6.
The accompanying map says, "Around Grand Central Terminal, towers could be up to twice the size now permitted. Development could also take place along the Park Avenue corridor, where towers could be more than 40% larger. Elsewhere in the district, towers could be 20% larger."
New York’s premier district, the 70-block area around Grand Central
Terminal, has lagged, Bloomberg officials say, hampered by zoning rules,
decades old, that have limited the height of buildings.
Mayor Michael R. Bloomberg wants
to overhaul these rules so that buildings in Midtown Manhattan can soar
as high as those elsewhere. New towers could eventually cast shadows
over landmarks across the area, including St. Patrick’s Cathedral and
the Waldorf-Astoria Hotel. They could rise above the 59-story MetLife
Building and even the 77-story Chrysler Building.
Mr. Bloomberg’s proposal reflects
his effort to put his stamp on the city well after his tenure ends in
December 2013. Moving swiftly, he wants the City Council to adopt the
new zoning, for what is being called Midtown East, by October 2013, with
the first permits for new buildings granted four years later.
administration says that without the changes, the neighborhood around
Grand Central will not retain its reputation as “the best business
address in the world” because 300 of its roughly 400 buildings are more
than 50 years old. These structures also lack the large column-free
spaces, tall ceilings and environmental features now sought by corporate
rezoning — from 39th Street to 57th Street on the East Side — would
make it easier to demolish aging buildings in order to make way for
state of-the-art towers.
it, “the top Class A tenants who have been attracted to the area in the
past would begin to look elsewhere for space,” the administration says
in its proposal.
plan has stirred criticism from some urban planners, community boards
and City Council members, who have contended that the mayor has acted
hastily. They said they were concerned about the impact of taller towers
in an already dense district where buildings, public spaces, streets,
sidewalks and subways have long remained unchanged.
Mr. Bloomberg has encouraged high-rise development in industrial neighborhoods, including the Far West Side of Manhattan,
the waterfront in Williamsburg, Brooklyn, and in Long Island City,
Queens. But with the proposal for Midtown, which is working its way
through environmental and public reviews, he is tackling the city’s
the development potential in this area will generate historic
opportunities for investment in New York City,” Deputy Mayor Robert K.
The initiative would, in some cases, allow developers to build towers twice the size now permitted in the Grand Central area. The
owner of the 19-story Roosevelt Hotel at Madison and 45th Street could
replace it with a 58-story tower under the proposed rules. Current
regulations permit no more than 30 floors.
When zoning changes increase the value of land, who should reap the benefit? The current landholder, or the community? What did the landholder do to earn that windfall? Do you think it comes out of thin air? Do you think it is paid him by other rich people?
Or do you recognize that it is part of the structure which enriches a few and impoverishes the many?
It is easy to fix this one. One just has to recognize the structure, and value the land correctly, and start collecting the lion's share of the land rent for the community. If it is more than NYC can put to use -- and it will be -- then apply the excess to reducing our federal taxes on productive effort. Use it to fund Social Security, or Medicare, or universal health insurance, or something else that will benefit the vast majority of us instead of an undeserving tiny privileged minority. Don't throw it in the ocean, and don't leave it in private pockets, be they American or not.
Collect the land rent. Repeat next year, and the next, and the next. Natural Public Revenue.
The common ownership of mines necessarily followed, with an
allotment of lands to anyone who wished to live by tilling the land;
but not a foot of the land was remitted to private hands for
purposes of selfish pleasure or the exclusion of any other from the
— W. D. HOWELLS, A Traveler from
Altruria, Chap. XI., p. 271.
His next task, and indeed the most hazardous he ever undertook, was
the making a new division of their lands. For there was an
extreme inequality among them, and their State was overloaded with a
multitude of indigent and necessitous persons, while its whole
wealth had centered upon a very few.
Well, not quite. The film's a little older than I am.
Watched that film last night ... great quote:
Billie: Because when ya steal from the government, you're stealing from yourself, ya dumb ass.
And when we allow others to steal from the commons what rightly belongs to the community, what are we? Some of that theft we all recognize as theft, and other kinds are perfectly legal, even honored, under our current laws. I find the latter even more troubling than the former.
And when neither our economists nor our leaders even SEE it, it is fair to call that a corruption of what their businesses are supposed to be.
But there is a higher law than the Constitution, which regulates our authority over the domain, and devotes it to the same noble purpose.
The territory is a part of the common heritage of mankind, bestowed
upon them by the Creator of the Universe.
— WILLIAM H. SEWARD, Speech in the
United States Senate, March 11, 1850.
We now speak of property in land; and there is a difficulty in
explaining the origin of this property consistently with the law of
nature; for the land was once, no doubt, common; and the question
is, how any particular part of it could justly be taken out of the
common and so appropriated to the first owner as to give him a
better right to it than others; and what is more, a right to exclude
others from it. Moralists have given many different accounts of this
matter, which diversity alone, perhaps, is a proof that none of them
— ARCHDEACON PALEY, Moral and
Political Philosophy (1785), Book III., Part I., Chap 4.
See also January 28 and 29, and Kate Kennedy's "Paley's Pigeons."
All that natural law does is to suggest the establishment of
property when the welfare of human society demands it, leaving it to
the wisdom of men to determine whether they should allow private
property in all things or only in some, and whether they should hold
those which they appropriate separately or in common, leaving the
rest to the first occupant, so that no one can assume the right to
enjoy them alone.
— PUFENDORF, Law of Nature and
Nations (1672), Book IV., Chap. 4, Sec. 4.
Equity, therefore, does not permit property in land. For if
one portion of the earth's surface may justly become the
possession of an individual and may be held by him for his sole use
and benefit as a thing to which he has an exclusive right, then
other portions of the earth's surface may be so held; and eventually
the whole of the earth's surface may be so held; and our planet may
thus lapse into private hands.
— HERBERT SPENCER, in 1850, Social
Statics, Chap. IX.
In the early ages of society it would have been impossible to
maintain the exclusive ownership of a few persons in what seems at
first sight an equal gift to all (the land) — a thing to which
everyone has the same claim.
— WALTER BAGEHOT (1826-1877),
Economic Studies, Essay I., Part I., p. 31.
Let us suppose that a people is excluded from the ownership of the
land. I say that this exclusion, even if followed by no other
injustice (which I think impossible), by making a man a stranger to
the commonwealth, makes him indifferent to the existence of the
— MARMONTEL, Address in Favor of
the Peasants of the North (1757), Oeuvres, Vol X., p. 72.
That any human being should dare to apply to another the epithet
"pauper" is, to me, the greatest, the vilest, the most unpardonable
crime that could be committed. Each human being by mere birth
has a birthright in this earth and all its productions; and if they
do not receive it, then it is they who are injured, and it is not
the "pauper," oh, inexpressibly wicked word! — it is the well-to-do
who are the criminal classes.
— RICHARD JEFFERIES, The Story of
My Heart, Chap. X., p. 122.
Any settlement of the land of a country that would exclude the
humblest man in that country from his share of the common
inheritance would be not only an injustice and a wrong to that man,
but moreover would be an impious resistance to the benevolent
intentions of the Creator.
Land is not, and cannot be, property in the sense in which movable
things are property. Every human being born into this planet
must live upon the land if he lives at all. He did not ask to
be born, and, being born, room must be found for him. The land in
any country is really the property of the nation which occupies it.
— J. A. FROUDE, Ireland,
Nineteenth Century, September, 1880, p. 362.
That which is yet wanting on your part to be done is this, to see
that the oppressor's power be cast out with his person; and to see
that the free possession of the land and liberties be put into the
hands of the oppressed commoners of England.
— JERRARD WINSTANLEY,
Epistle Dedicatory to Oliver Cromwell, in
The Law of Freedom in a
Platform, or True Magistracy Restored.
"But how is it that you allow these chiefs — landlords, don't you call them? — to taboo the
soil, and prevent you all from even walking on it? Don't you see
that if you choose to combine in a body, and insist upon the
recognition of your natural rights — if you determined to make the landlords give up
their taboo, and cease from injustice, they'd have to yield to you?
And then you could exercise your natural right of going where you
pleased, and cultivate the land in common for the public benefit,
instead of leaving it as now, to be cultivated anyhow, or turned
into waste, for the benefit of the tabooers?"
— GRANT ALLEN, The British
Barbarians (Words spoken by Bertram).
The nobility and gentry and even those holy men, the abbots, not
content with the old rents that their farms yielded, nor thinking it
enough that they, living at their ease, do no good to the public,
resolve to do it hurt instead of good. . . . As if
forest and parks had swallowed up too little of the land, those
worthy countrymen turn the best inhabited places into solitude.
A great landholder may legally convert his whole property into a
forest or hunting ground, and expel every human being who has lived
upon it. In a thickly populated country like England, where
almost every acre has its owner and occupier, this is a power of
legally destroying his fellow-creatures; and that such a power
should exist, and be exercised by individuals, in however small a
degree, indicates that as regards true social science, we are still
in a state of barbarism.
— ALFRED RUSSEL WALLACE,The Malay
Archipelago, Chap. 40. Final Note to the book. (1869)
The post below this one, "Mitt Romney's 'Fair Share' " refers to his fair share of the costs of providing public goods.
But perhaps an equally important question is the nature of one's fair share of the output of our economy and the output of the earth. Some of the former output is the result of individual efforts, and one ought to be able to keep that portion. But at the same time we must recognize how much comes from the division of labor, from drawing down on the non-infinite supply of non-renewable natural resources on which all of us today must depend and on which future generations of human beings must rely. Those who draw down more than their legitimate share owe something to the rest of the community. Our wealthiest tend, we suspect, to use many, many times their legitimate share, and the median American likely draws far more than their share, when one considers the planet as a whole.
Perhaps "legitimate" is not the right word here. It refers to what is permissible under current law. (The word gets misused a lot -- see the discussion on "legitimate rape," which seemed to be about the circumstances under which a woman has a right to make a specific very personal, decision, and when it is considered by some to not be left to her and is the province of government, legislators or others.)
What is one's "fair share" of natural resources? America is using a hugely disproportionate share of the world's resources. Are we entitled to it because we're somehow "exceptional"? Because "our" God is somehow better than other nation's Gods? Or do we genuinely believe that all people are created equal, and intend to live our lives accordingly?
Our output of greenhouse gases exceeds our share of the world's population. This is not without consequences for the world, and for peace on earth.
We ought to be re-examining our incentives so that they move us in the direction we ought to be going, which is, to my mind, using less. We can build transportation infrastructure which will permit many more of us to move around with less impact on the environment. We can fund that through collecting the increases in land value that infrastructure creates. We can correct the incentives which cause us to use today's inferior technologies to extract natural resources from the earth in ways which damage the environment, as if ours was the final generation, or the only one worth serious consideration.
Better incentives could reduce, eliminate, even reverse urban sprawl. I refer specifically to land value taxation as a replacement for the existing property tax, particularly in places where assessments are for one reason or another not consistent with current property values -- e.g., California and Florida, parts of Delaware and Pennsylvania which currently use assessments from the 1970s, and many other places where assessments are simply out of whack with current reality!) We should be replacing sales taxes, wage taxes, building taxes with taxes on land value and on natural resources. Most of that value is flowing generously into private or corporate pockets, to our detriment. It concentrates wealth, income, and, of course, political power.
Collecting the rent, instead of leaving the lion's share of it to be pocketed by the rent-seekers, would go a long way to making our society and our economy healthier. Eliminating the privilege of privatizing that which in a wisely designed society would be our common treasure would make our society a better place in which to live, a place in which all could thrive and prosper without victimizing their fellow human beings.
A major theme of the underlying political debate in the United States is the role of the state and the need for collective action. The private sector, while central in a modern economy, cannot ensure its success alone. For example, the financial crisis that began in 2008 demonstrated the need for adequate regulation.
Moreover, beyond effective regulation (including ensuring a level playing field for competition), modern economies are founded on technological innovation, which in turn presupposes basic research funded by government. This is an example of a public good – things from which we all benefit, but that would be undersupplied (or not supplied at all) were we to rely on the private sector.
Conservative politicians in the US underestimate the importance of publicly provided education, technology, and infrastructure. Economies in which government provides these public goods perform far better than those in which it does not.
But public goods must be paid for, and it is imperative that everyone pays their fair share. While there may be disagreement about what that entails, those at the top of the income distribution who pay 15% of their reported income (money accruing in tax shelters in the Cayman Islands and other tax havens may not be reported to US authorities) clearly are not paying their fair share. ...
I have to disagree with the second sentence of this next paragraph. And I think Stiglitz knows better, if he stops to think about it:
Democracies rely on a spirit of trust and cooperation in paying taxes. If every individual devoted as much energy and resources as the rich do to avoiding their fair share of taxes, the tax system either would collapse, or would have to be replaced by a far more intrusive and coercive scheme. Both alternatives are unacceptable.
We don't need intrusive or coercive; we just need to start collecting the lion's share of the rent! Well, I suppose some rent-seekers would find this extremely intrusive -- it intrudes on their habit of self-enrichment by privatizing of what is rightly and logically our PUBLIC treasure, the logical way of financing PUBLIC goods. And Professor Stiglitz is quite aware of the value of natural resources; he may not be quite as conscious of the value of urban and other well-situated land.
Our national recordkeeping doesn't even collect the valuations of land and natural resources on any consistent basis! (One could reasonably argue that this failure-to-measure is a form of corruption!) What we don't measure we can't do anything about. And the powers that be are quite content with how we do things; the benefits accrue to them! And several generations of college-educated people know nothing about the issue, which was well known and widely discussed 100 years ago. (Look into the extensive Single Tax literature and the ideas of Henry George.)
Some more excerpts:
The billionaire investor Warren Buffett argues that he should pay only the taxes that he must, but that there is something fundamentally wrong with a system that taxes his income at a lower rate than his secretary is required to pay. He is right. Romney might be forgiven were he to take a similar position. Indeed, it might be a Nixon-in-China moment: a wealthy politician at the pinnacle of power advocating higher taxes for the rich could change the course of history.
But Romney has not chosen to do so. He evidently does not recognize that a system that taxes speculation at a lower rate than hard work distorts the economy. Indeed, much of the money that accrues to those at the top is what economists call rents, which arise not from increasing the size of the economic pie, but from grabbing a larger slice of the existing pie.
Those at the top include a disproportionate number of monopolists who increase their income by restricting production and engaging in anti-competitive practices; CEOs who exploit deficiencies in corporate-governance laws to grab a larger share of corporate revenues for themselves (leaving less for workers); and bankers who have engaged in predatory lending and abusive credit-card practices (often targeting poor and middle-class households). It is perhaps no accident that rent-seeking and inequality have increased as top tax rates have fallen, regulations have been eviscerated, and enforcement of existing rules has been weakened: the opportunity and returns from rent-seeking have increased.
Today, a deficiency of aggregate demand afflicts almost all advanced countries, leading to high unemployment, lower wages, greater inequality, and – coming full, vicious circle – constrained consumption. There is now a growing recognition of the link between inequality and economic instability and weakness.
There is another vicious circle: Economic inequality translates into political inequality, which in turn reinforces the former, including through a tax system that allows people like Romney – who insists that he has been subject to an income-tax rate of “at least 13%” for the last ten years – not to pay their fair share. The resulting economic inequality – a result of politics as much as market forces – contributes to today’s overall economic weakness.
For they account it a very just cause of war for a nation to hinder
others from possessing a part of the soil, of which they make no
use, but which is suffered to lie idle and uncultivated; since every
man has by the law of Nature a right to such waste portion of the
earth as is necessary for his subsistence.
— SIR THOMAS MORE, Utopia (1516),
Book II., tit. Of Their Traffic.
The vacant land belongs to the landless. The simple fact that
the one is vacant and the other landless is of itself the highest
proof that they should be allowed to come together. Alas, what
a crime against nature that they should be kept apart.
— GERRIT SMITH, Smith's Speeches
in the U. S. Congress, p. 247 (1854).
The earth in its natural uncultivated state was, and ever would
have continued to be, the common property of the human race.
It was in vain anyone repeated, "I built this well; I gained this spot by my industry." Who gave you the boundaries? it might be objected, and what right have you to demand payment of us for doing what we did not require of you? Are you ignorant that numbers of your fellow-creatures are starving for want of what you possess in superfluity?
— J. J. ROUSSEAU, Essay on the Origin of Inequality Among Men, Part II., p. 20.
We occupy an island, on which we live by the fruits of our labor; a shipwrecked sailor is cast up on it; what is his right? May he say: "I, too, am a man; I, too, have a natural right to cultivate the soil. I may, therefore, on the same title as you, occupy a corner of the land to support myself by my labor?"
— EMILE DE LAVELEYE, Primitive Property, Chap. XXVII., p. 351
If you know how to defend your rights, if you accomplish your duty,
this frightful disorder will cease, the human race, lifted up after
its long downfall, will no longer be the property of a few tyrants,
neither will the earth be their exclusive heritage. All will
share in the good things destined by Providence for all.
— ABBE LAMENNAIS, The Book of the
People, Chap. XVI.
Then he says: "If I am born into the earth, where is my part? Have the goodness, gentlemen of this world, to show me my wood lot, where I may fell my wood, my field where to plant my corn, my pleasant ground where to build my cabin."
"Touch any wood or field or house-lot on your peril," cry all the gentlemen of this world; "but you may come and work in ours for us, and we will give you a piece of bread."
In love of home the love of country has its rise, and who are the truer patriots or the better in time of need — those who venerate the land, owning its woods and streams and earth and all that they produce, or those who love their country, boasting not a foot of ground in all its wide domain?
— CHARLES DICKENS, Old Curiosity Shop, Chap. XXXVIII.
The wood of the forest, the grass of the field, and all the natural fruits of the earth, which when land was in common, cost the laborer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them. He must then pay for the license to gather them, and must give up to the landlord a portion of what his labor either collects or produces. This portion, or what comes to the same thing, the price of this portion, constitutes the rent of the land.
— ADAM SMITH, The Wealth of Nations, Book I., Chap. 6.
The social problem of the future we consider to be, how to unite the greatest individual liberty of action with a common ownership in the raw material of the globe, and an equal participation of all in the benefits of combined labor.
— JOHN STUART MILL, Autobiography, Chap. VII., p. 232.
ON Sunday, the best climate policy in the world got even better: British Columbia’s carbon tax — a tax on the carbon content of all fossil fuels burned in the province — increased from $25 to $30 per metric ton of carbon dioxide, making it more expensive to pollute.
This was good news not only for the environment but for nearly everyone who pays taxes in British Columbia, because the carbon tax is used to reduce taxes for individuals and businesses. Thanks to this tax swap, British Columbia has lowered its corporate income tax rate to 10 percent from 12 percent, a rate that is among the lowest in the Group of 8 wealthy nations. Personal income taxes for people earning less than $119,000 per year are now the lowest in Canada, and there are targeted rebates for low-income and rural households.
The only bad news is that this is the last increase scheduled in British Columbia. In our view, the reason is simple: the province is waiting for the rest of North America to catch up so that its tax system will not become unbalanced or put energy-intensive industries at a competitive disadvantage.
Over dinner tonight, Milton Friedman's name came up, and I commented that in about 1978 and again in 2006, a few weeks before his death, Milton Friedman called land value taxation the "least bad" tax, but never lifted a finger in the intervening years to help promote it.
The carbon tax is another good, and wise, and just, tax.
How many economists will put their shoulder to getting it enacted?
How many will simply hang out in their ivory towers?
Let’s start with the economics. Substituting a carbon tax for some of our current taxes — on payroll, on investment, on businesses and on workers — is a no-brainer. Why tax good things when you can tax bad things, like emissions? The idea has support from economists across the political spectrum, from Arthur B. Laffer and N. Gregory Mankiw on the right to Peter Orszag and Joseph E. Stiglitz on the left. That’s because economists know that a carbon tax swap can reduce the economic drag created by our current tax system and increase long-run growth by nudging the economy away from consumption and borrowing and toward saving and investment.
What would a British Columbia-style carbon tax look like in the United States? According to our calculations, a British Columbia-style $30 carbon tax would generate about $145 billion a year in the United States. That could be used to reduce individual and corporate income taxes by 10 percent, and afterward there would still be $35 billion left over.
Why on earth should the privilege to pollute OUR air be be given away for free, or for less than the social costs it imposes on us? Who benefits from such a system?
A carbon tax makes sense whether you are a Republican or a Democrat, a climate change skeptic or a believer, a conservative or a conservationist (or both). We can move past the partisan fireworks over global warming by turning British Columbia’s carbon tax into a made-in-America solution.
The doctrine that the soil is of natural right the common property of the human race, and that each individual should be allowed to enjoy his share, is now tacitly admitted by many eminent economists in England and France.
— PROF. SIMON NEWCOMB, The Labor Question, North American Review, July, 1870, p. 151.
In principle I do not see why the sea should be dispensed from serving our need and comfort, any more than the land. However . . . men were left free to make private property of the sea as well as of the land, or to leave it in its primitive state, common to all, so that it should not belong to one more than to another.
— PUFENDORF, Law of Nature and Nations (1672), Book IV., Chap. 5, Sec. 5.