LVTFan's Blog

So is the Woodstock Generation going to fix America's most serious problems?

I was a rising senior in high school when Woodstock took place. A fellow waitress in the local deli in which I worked -- Max for Snacks, in King of Prussia, PA -- took off for Woodstock, and the rest of us dreamed of doing so. 

We thought we could change the world.  Many had a vision of a society in which all could prosper, all could succeed.  We sang, we danced, we applauded, we protested.  Gradually we worked our way up.  We educated ourselves, we bought homes, we had children -- not always in that order -- and we became part of the establishment.  We bent the establishment, a bit, perhaps, to our advantage.

But we didn't correct the problems, and arguably, we let them grow worse.  We watched as the benefits of public investment -- local, muncipal, county, state, federal -- accrued not to all of us but to those who own our land and claim title to our natural resources.  We permitted corporations and individuals to lay claim to our common resources, we who grew up hearing about Jed Clampett being somehow entitled to the oil revenue, to the exclusion of the rest of us.

We're so used to the way this aspect of the world was handed to us that few of us think to question it.  And yet the privatization of the economic value of urban land and the privilege of collecting the revenue on non-renewable natural resources on which all of us are dependent together produce some of our most serious social, economic, environmental, poverty and justice problems.  Most wars are fought over these two things.

And until we come to recognize this, all we can do is put bandaids on those problems -- locally, nationally and globally.

These two things are what someone wisely referred to as "Natural Public Revenue" sources.  Yet we largely ignore them, and use taxes which set up perverse incentives -- and wonder why we can't seem to solve any of our biggest problems.

NRDC: Ranking States’ Oil Vulnerability and Solutions for Change

Ranking States’ Oil Vulnerability and Solutions for Change
http://www.nrdc.org/energy/states/files/states.pdf

A few lifts from an interesting paper.  It speaks only to oil usage related to cars, putting aside heating oil and other uses of oil.

What it misses is the fact that our incentives are aligned to create sprawl, and that until we realign them, we aren't going to get smart growth.  Readers of this blog know that the first realignment -- necessary, if not sufficient -- is a reform of the conventional property tax, shifting taxation off buildings and onto land value, followed by a shifting of more of the tax burden off sales and wages and onto land value.  When we tax land value heavily, only good things happen --

• from the point of view of the environment,
• from the point of view of efficiency,
• from the point of view of the economy,
• from the point of view of encouraging smart growth,
• from the point of view of job creation and affordable housing,
• from the point of view of dense cities and walkable cities and effective public transit which people want to use and are willing and able to rely on, day in and day out.

The NRDC is not going to achieve its goals without the tool of land value taxation.   "Targets" and "funding" are all well and good, but they don't counteract the current disincentives that our system of taxation creates.  I'd be happy to provide the NRDC folks with material which will help them understand the needed change.

Good public transit systems can be fully funded by the increased land value they create.

From their paper:

America’s dependence on oil is problematic in several ways, including the following:

• The United States has less than 2 percent of the world’s oil supplies but is responsible for about one-quarter of the world’s oil consumption.2 We import almost two-thirds of our crude oil supply from foreign countries, and more and more of the world’s future supply will come from regions that are either politically unstable or unfriendly to U.S. interests.3
• Our unstable supply of oil threatens our national economy, particularly since about 96 percent of our transportation system relies on oil.4
• Oil consumption is a leading contributor to the greenhouse gas (GHG) emissions that cause global warming. In the United States, the oil-based transportation system is responsible for roughly one-third of our global warming pollution

...

Smart growth and public transit. States can reduce oil dependence by integrating land use and transportation policies and designing them to reduce vehicle-miles traveled and promote alternatives to driving. Nineteen states, including Hawaii, Georgia, Tennessee, and Maine, have adopted smart growth measures intended to curb sprawl and reduce the associated traffic and vehicle-miles traveled. Fourteen states have created an agency or other mechanism to develop and coordinate land use policies. Six states have set targets for reducing vehicle-miles traveled. In addition, some states — led this year by New York, New Jersey, and Washington — have prioritized the funding of public transit through the allocation of state funds and/or by transferring portions of their federal highway dollars.

...

• Nineteen states have growth management acts. Among the most comprehensive ways of promoting smart growth is growth management legislation, such as Washington’s Growth Management Act (GMA). This GMA affects 29 counties (95 percent of Washington’s population) and requires, among other things, policies covering sprawl reduction, affordable housing, open space and recreation, environmental protection, natural resource industries, permit processing, concentrated urban growth, regional transportation, historic lands and buildings, and public facilities and services.13 Despite Florida Governor Crist’s weakening of his state’s growth management laws this year, growth management legislation was still one of the areas of greatest improvement from last year, when only 12 states had such laws.
• Only six states have set targets for reducing vehicle-miles traveled. For instance, the state of Washington amended its GMA to make it even more effective at lowering oil consumption, calling for reductions in per capita vehicle-miles traveled (VMT) of 18 percent by 2020, 30 percent by 2025, and 50 percent by 2050.14
• Fourteen states have an agency or other mechanism to coordinate development. Many states have recognized that several different state entities influence development, sometimes in potentially contradictory ways, and have created mechanisms to coordinate public investment that supports development. In 2003, Massachusetts established a powerful Executive Office of Commonwealth Development.15 Such coordination is a vital first step toward smart development, enabling a state to take into account the wide range of relevant influences. We encourage states to use coordinating mechanisms to promote smart growth.
• Some states have prioritized the funding of public transit. Public transit systems, such as bus, commuter rail, subway, and light rail programs, are important components in state efforts to promote smart growth and reduce oil dependence. By creating or expanding reliable and accessible public transit programs, states can reduce the number of single-passenger cars on the road, consequently lowering average VMT. And strong public transit provides a critical transportation alternative as gas prices rise. A case in point: Americans drove 1.4 billion fewer highway miles in April 2008 than in April 2007 because of soaring fuel prices; many took trains or buses instead, leading to a surge in transit ridership.16 In 2008, public transportation saw its highest level of ridership in 52 years.17

States have the ability to “flex” certain federal funds that ordinarily would be spent on highway projects and use them to pay for public transit programs. States that choose not to transfer federal funds to transit programs are not necessarily neglecting transit funding, however, as they may be spending more state dollars on transit. The best way to understand state transit prioritization is to compare the amount of total state spending (including flexed federal funds) on mass transit with the total spent on highway programs, as shown in the far right column of Table 3. By this measure, the top five states prioritizing public transit spending are New York, New Jersey, Washington, Massachusetts, and Utah.

Council of Georgist Organizations Conference: Cleveland 2009

Council of Georgist Organizations Conference: Cleveland 2009.

The schedule for the annual gathering of Georgists (that is, people who are persuaded that the economist and social philosopher Henry George (b. 1839, Philadelphia; d.1897, NYC), author of "Progress & Poverty" and a book of essays entitled "Social Problems," among others, pretty much had it right) is now online.  It is in downtown Cleveland in early August.

Looking over the schedule, I see a lot of familiar names -- people I've come to know since I attended my first CGO meeting in 2001 -- and some people I've not yet met face to face but know online.  I'm happy that we have few sessions running side by side, because virtually all of the programs are of interest to me.

My last visit to Cleveland was with 600 delightful women, and included a great and noisy party at the Rock 'n' Roll Hall of Fame. (I just had the pleasure of being on the host committee for the same group's 2009 Annual Meeting!)  At that time, I didn't know the significance of the larger-than-life statue nearby of Cleveland mayor Tom L. Johnson.  The book he holds in his hand is P&P.

• If you would like to see an end to poverty, come join us.
• If sprawl and its concomitants concern you, come join us; we know how to slow it and reverse it and channel it into reusing the land already well served by taxpayer-provided infrastructure. 
• If long commutes -- and the fuel, pollution, spending and time loss involved -- worry you, come join us.  
• If you would like to see a more stable economy, without the booms and busts which cause such widespread pain and ruin, we have answers. 
• If you would like to see healthier cities and a more vibrant economy, come listen to what some of these people have to offer. 
• If unaffordable housing troubles you, come talk to us. 
• If the extreme concentrations of income and wealth -- particularly of natural resource wealth -- trouble you, we know how to correct it gently and justly.
• If you hate the income tax and recognize that sales and consumption taxes damage the economy, but still believe that there are some things government can do better than the private sector, we know how to finance that spending justly.

We come from all over the political spectrum, and share little except a major commitment to creating a better and more sustainable world and society and economy for all. (That's a lot actually!)  It is a joy to spend a few days with people so passionate about social and economic justice and with a clear vision of how to get there.

If you're curious about Henry George, you might start where I started, with four of his speeches.  I found these as pamphlets in the files of my late grandparents when I took possession of their library and file cabinets and some sentimental treasures.  My first pass was for genealogical information.  Shortly after that, I started reading a speech entitled "Thou Shalt Not Steal," and it clicked. My paternal grandparents (three of them, actually: my own grandparents, and my step-grandmother, whose first husband was a dear family friend, too, in the 1940s and 50s) were all Georgists.  For every landmark occasion in my young life, their gifts included a lovingly inscribed copy of Progress & Poverty (just in case I'd misplaced the previous ones!)  But I'd not done more than thumb through it.   When I first did get around to reading it, I was in my late 40s; my grandparents were quicker studies, and devoted the second half of their lives to promoting these ideas.  My first read of P&P was a slow slog; a friend shocked me when she said she found it a page-turner, a mystery whose solution she was anxious to get to.  Now I admit I read it for, and with, pleasure.

Another piece you might read is my grandfather's "An Introduction to Henry George" or my grandmother's more humorous article, "My Introduction to Henry George;" she went on to write delightful short stories for Ladies Home Journal, Colliers, the Saturday Evening Post and many other magazines in the 40s.  Things have come full circle -- I'm on the board of two Georgist foundations, including the one my grandfather worked for and with for over 30 years, the Robert Schalkenbach Foundation.  And following in the example of my late stepgrandmother, who tried to write an activist letter every day, I try to post comments on either my blog or other blogs or articles online every day.  I mostly succeed, though in the past month or two, I've fallen short.   And I've created a website to make Henry George's ideas accessible to people coming from a wide range of interests and points of view: http://www.wealthandwant.com/

Michael Kinsley - The Senate's Estate Tax Debate

Michael Kinsley - The Senate's Estate Tax Debate - washingtonpost.com.

The online article is titled "Democrats for Rich Heirs?":

But why the populist fury over those AIG bonuses of a few million dollars while no one seems to care much about billions being transferred through inherited wealth? The obvious answer -- that there's a difference between what people do with our hard-earned money and what they do with their own hard-earned money -- isn't actually as persuasive as it seems.

Perusing the Forbes 400 list of America's richest people, it's striking how few of them made the list by building the proverbial better mousetrap. The most common route to gargantuan wealth, like the route to smaller piles, remains inheritance. The ability to pass money along to your kids may motivate many a successful executive or investor to work harder, but it can't possibly motivate those kids to inherit harder in order to pass it along once again.

Dozens of Forbes 400 fortunes derive from the rising value of land or other natural resources. These businesses are fundamentally different from mousetrap building. Land does not need to become "better" to increase in value, and that value increase doesn't produce more land. Yet other fortunes depend directly on the government. The large fortunes based on health care and pharmaceuticals would not exist if not for Medicare and Medicaid. The government hands out large fortunes even more directly in forms as varied as

• cable-TV franchises;
• cellphone licenses;
• drilling, mining and mineral rights;
• minority small-business loans; and
• other special treatment.

LVTfan here: The privilege of calling OUR natural resources MINE is a major one, and we're so used to it that we don't even notice it.

The oil revenue  (and other like revenue -- see Mason Gaffney's article, The Hidden Taxable Capacity of Land for a listing of some of the things which the classical economists would recognize as land), that currently flows to individuals -- be they Jed Clampetts, or large property owners rural or just choice-land owners urban -- or corporations (ditto!) should be treated as OURS.  Then we wouldn't need to tax wages so much -- and maybe not at all.

And we'd all have an equal opportunity under such a scenario.

About Land Value Taxation

If you spend some time reading this blog, you might come away thinking that I believe that land value taxation is a cure-all, a panacea. (See the "topic cloud" in the left sidebar.)  But that isn't the case. 

However, I have come around to the point of view that many of our most serious social, environmental, economic and justice problems are not going to be solved -- cannot be solved! -- without the enactment of land value taxation.

That sounds extreme, particularly to those who have never heard of LVT or who have read little about it.  

So many of our most serious problems ultimately find their root in the privatization of the natural creation -- that which the classical economists called land, including things that the classical economists would have known nothing about, but would immediately recognize: electromagnetic spectrum, geosynchronous orbits, landing rights at LaGuardia (particularly at rush hour), etc..

Let me be more specific.  It isn't the privatization of land, or oil resources, or minerals, or geosynchronous orbits, or water rights themselves that is the problem.  Secure title is necessary and important.  Rather, the problem is that the economic value of these common resources is currently treated as private treasure rather than as our common asset.   But we need revenue for public purposes, so we then tax sales and wages and interest.  But those who need land pay others for it (unless they inherited the rights to it) either in the form of rent or in the form of a lump sum, and then are burdened with the sorts of taxes which depress the economy and steal from them that which they produced (in addition to the significant costs of servicing the debt related to that lump sum payment).

Land, in all its forms, is not of human creation.  We can't create more of it in response to an increase in demand.  In particular, we can't create more land downtown, where it is served by awesomely important infrastructure that took decades and millions or billions to build.  We can't create more water, or more frequencies on FM or AM radio. Yet we permit the privatization of the economic value of these and other like vital and fabulously valuable common assets.

Were we to shift our taxes off productive effort, off sales, off buildings, and onto all these things called "land value," we would be on our way to solving many of our environmental problems, our social problems, our economic problems, urban sprawl and its concommitants, and many of our justice problems. We'd have a more efficient economy, a more vibrant one, without the excess burden (deadweight loss) our current system creates.  We'd have opportunity, jobs, a growing pie, and lose the boom-bust cycle which plagues us.

Grocery Store Parking Lot: Sprawl in Microcosm

When I seek a parking spot near my local grocery store, I am brought face to face with a form of sprawl.  While I am not one to drive around for long looking for a parking spot (it seems a waste of time and energy), I find myself dealing with a simple form of sprawl: parking spots occupied or blocked by shopping carts.  The parking spots can't serve their intended purpose because someone has left behind an underuse.   

How much land does a family need? What are the implications for our country?

A friend's comment that for most people, a lot of 15,000 to 20,000 square feet is about all we could put to use (for a home), got me thinking. That's 0.33 to 0.46 acre.  Certainly some of us need more, particularly if we are market farming or are growing all our own food.  Many of us live on far less land, particularly in or near cities.  In Manhattan, a lot 25' wide and 100' deep, or 0.57 acres, is standard, and might bring $7 million or more; it might house a single family, quite generously, in 3 or more stories.

At 2.5 persons per household, 0.33 acre average lot size works out to 2.5*3*640 = 4800 people per square mile.  To accommodate all 300 million of us would require a circle with a radius of 141 miles.  (Calculation: 300,000,000, divided by 4,800, divided by pi; take the square root.) That's a circle whose opposite edges are in

• Los Angeles and Las Vegas (272 miles); or
• Pittsburgh and Cincinnati (285 miles); or
• Albany and Buffalo (288 miles); or
• Chicago and Cincinnati (291 miles); or
• Philadelphia and Pittsburgh (297 miles); or
• St. Louis and Nashville (304 miles); or
• New Orleans and Montgomery (310 miles); or
• Boston and Philadelphia (317 miles); or
• Atlanta and Charleston (SC) (320 miles).

A 0.50 acre lot size works out to 2.5*2*640 = 3200 people per square mile.  To accommodate all 300 million of us at that density would require a circle with a radius of 173 miles.  That's a circle whose opposite edges are in

• New Orleans and Birmingham (339 miles); or
• Kansas City and Oklahoma City (343 miles); or
• New Orleans and Houston (346 miles); or
• Chicago and Columbus (351 miles); or
• Baltimore and Cleveland (361 miles); or
• New York and Pittsburgh (362 miles); or
• Albany and Washington D.C. (366 miles); or 
• Los Angeles and Phoenix (372 miles); or
• Atlanta and Memphis (387 miles); or
• Minneapolis and Chicago (403 miles).

If we were all content with a single-family home on that Manhattan 25x100 lot, the calculation would be 2.5x17x640 = 27,200 people per square more.  To accommodate all 300 million of us would of require a circle with a radius of 105 miles ... diameter of 210 miles.  No we haven't even talked about any multi-family housing!  This is all single-family. 

Not everyone wants as much as 0.33 acres. If we return to the 0.33 acre assumption per family, but assume that half of the single-person households would prefer 0.05 acres, and that 25% of the remainder of households would prefer 0.10 acres.

1-person households represent about 52 million people.  If half of those households would choose to live on 0.05 acres, and the other half would still want to be on .33 acre, the "central core" of 26 million people would live on 26 million*.05 acres/640 = 2,031 square miles; that's a radius of 25.4 miles.  If the rest of us, 248 million, chose to live at .33 acre per household, with an average household size of 3.0 (pulled from thin air!) that would be 248 million, divided by 3 per household equals 83 million hh at .33 acre is 42,800 square miles; add that to the 2,031 sq miles occupied by the .05 acre group.  That's 44,831 square miles.  Divide by 3.14, and take the square root: the circle would need to have a radius of 119 miles.  A 240-mile circle would be the area between Dallas and Houston (239 miles), or Chicago and Detroit (275 miles), or St. Louis and Indianapolis (244 miles) or St. Louis and Kansas City (244 miles).

Of course none of these calculations allows any room for places to work, so let's say that we need to devote, say, 30% of our land to places that would employ us (and simultaneously provide for our shopping needs).  Let's further say that beyond that we need to allow 20% more for streets, railroads, parks, rivers, airports, schools.  That 44,831 square miles grows to just about 70,000 square miles. 

So how big an area is that?  Divide it by pi (3.14) ... 22,300 and take the square root: 149 miles.  That's a 300 mile circle, to contain all 300 million of us!  

And if, instead of a single urban area 300 miles across, we instead looked at 50 cities, they would need to be 1,400 square miles each, with a radius of 21 miles (and a population of 6 million people each). 

Some of us don't care about being within a commuting distance of what a city has to offer, and prefer to live in the wide open spaces.  That's fine, as long as they cover the costs themselves.  And they shouldn't be asked to pay for the infrastructure of the cities, except to the extent that they make use of them.  

"Miles Per Gallon" is the wrong measuring stick!

A few weeks ago there was a brief piece in the NYT Magazine entitled "Gallons Per Mile."  It got me thinking; my noodlings follow the article itself:

As gas prices rose earlier this year, consumers started paying a lot more attention to their cars’ miles per gallon. Good luck with that. The apparently simple unit of measurement is a highly misleading one, as two Duke management professors demonstrated in a June issue of Science. They favor an alternative measure of fuel economy: gallons consumed per 10,000 miles.

The problem with m.p.g., argues Richard Larrick, who wrote the article with his business-school colleague (and carpooling partner) Jack Soll, is that it leads consumers to significantly underestimate the gains in fuel efficiency that can be achieved by trading in very low m.p.g. vehicles — even for one that gets only a few more miles per gallon. Less detrimentally, m.p.g. also misleads people about the fuel savings achieved by moving from an ordinary family sedan into a Prius.

Change.gov

The new administration is seeking comments.   I'd like to believe they'll be read.  Here's what I posted at http://change.gov/ under "economy":

We need to shift taxes OFF productive effort and ONTO land value and natural resources.    Doing so will have a wide range of benefits.

Michael Kinsley on "Progress & Poverty"

This isn't the first time Michael Kinsley has shared his appreciation of Henry George and his landmark book, Progress & Poverty, but I thought it worth sharing nonetheless.  In the newest issue of The Week, Kinsley shares 7 favorite books.  The rest are novels, and here is what he has to say about P&P:

Progress and Poverty by Henry George (Cosimo, $15). Once a famous book by a famous author, now almost forgotten. George was a self-trained economist of the late 19th century. In Progress and Poverty, he explains to his own satisfaction — and pretty much to mine — how all the world’s evils are attributable to real estate. He overstates his case, but he does so with wit and excess that make the book fun to read. And it leaves you thinking …

Well, it isn't quite accurate to say "attributable to real estate."  I'd rephrase that to say something like "attributable to our failure to treat part of real estate -- the economic value of the land part -- as our common treasure."

I'm glad Kinsley sees Henry George's wit and vision.  I can't say I found P&P fun on the first reading -- I struggled through it the first time, though I now read it for pleasure.  May I offer you a number of options for dipping a toe into the water?

1. The first is the shortest version.  It comes from J. W. Bengough, a Canadian journalist, cartoonist and commentator.

All Boasted Charitable Doles Ever Futile.
God Hates Injustice.
Justice Knows Land May Not be Owned.
Poverty Quickly Remedied by Single Tax Upon Value, Work-value Excepted.
Yours Zealously, The Author)

(a little short for my tastes, but admirable nonetheless.)

2. A synopsis by Al Katzenberger
3. A 1928 abridgment by Harry Gunnison Brown, of the University of Missouri, Columbia ... including John Dewey's appreciation of Henry George.  Yes -- that John Dewey.  The book runs about 75 pages.
4. A. W. Madsen's abridgment (240 pages)
5. Bob Drake's 2006 thought-by-thought updating of P&P.  Bob first updated P&P into contemporary language -- roughly the language of Time or Newsweek -- and then abridged it, shortening some of HG's awesomely long and poetic sentences ... some of the excess to which Kinsley refers ... and providing a very readable version.  Those who know the original will find it ringing in their ears.   Those who do not will find a very readable book on the cause of some of our most serious -- and otherwise intractable -- problems, and the remedy we need if we are ever to solve them.   You can read it online here (with a course!) and here, listen to it as MP3s here, and buy it from Amazon or Schalkenbach.

6 The unabridged, available online and in hardcopy (look also at Amazon and, often, on ebay. (It was, after all, the #2 bestseller of the 1880s, and within 20 or so years, 6 million copies had been sold, so it is not surprising to find many of those copies still available.  6 million would be a blockbuster today.  Think of it over 100 years ago!  According to Wikipedia, The Cat in the Hat, published in 1957, has sold 10 million copies.)

(I've left out some others; e.g., there was an abridgment called More Progress, Less Poverty.) 

hear, read, mark, learn, and inwardly digest

This phrase comes from an Anglican prayer book, but it came to my mind when I was writing to a foundation which claims to be in favor of a just society.  Examining their website, I could see no sign of any familiarity with Henry George's ideas, and this phrase, whose origins I could not bring to mind, popped into my head. 

Hear ..., read, mark, learn, and inwardly digest ...  The reference is to scripture, but I think it might apply nearly as well to Henry George's ideas, if you regard any of these as important:

• ending poverty
• improving wages
• sharing nature's bounty more evenly among us
• protecting the environment from despoilment
• reducing, even reversing, sprawl
• making housing affordable
• making cities more vibrant
• creating jobs
• making effective public transportation systems realistic 

(I'd be happy to see any one of those ... and thrilled to see all of them.  Dayenu!)

 Well, Henry George has been called "The Prophet of San Francisco" -- that's where he wrote Progress & Poverty -- and many people consider him to have answers to problems that most people think are completely intractable.

Hear, read, mark, learn and inwardly digest ... and then get to work creating a more just society, for yourself, your neighbors, and all our children and future generations.

Change Needed to End Boom-Bust Cycles

John Fisher wrote an excellent Letter to the Editor, published in the Chatham Daily News, which I think worth sharing:

Sir:
Re: Boom and Bust Cycles.

No matter how many billion-dollar crutches (bailouts, stimulus) are thrown at the current economic downturn, up-and-down cycles will continue until the "experts" get back to Economics 101.

Adam Smith, David Ricardo, Henry George and other classical economists correctly defined land (free gift of nature), labour and capital as the three factors of production. Land or nature, not being created by labour, is not capital. Unlike privately created wealth, nature only gets value from the presence and activity of the community as a whole.

The economy is often compared to a house or a ship, but usually without reference to the lot or water upon which they absolutely depend. All the good things the experts now suggest to improve the house or ship will ultimately determine the value of the underlying natural base, depending of course on human pollution, over and restricted use, etc.

Giving nature a value like we do now for land and then capturing it for the social good would reduce urban sprawl and waste of resources, while rewarding quality and quantity in the production process.

Many classical economists, including Henry George, would shift taxes from private wealth (the house) to public wealth (the land). In other words, pay for what you take from nature and not what you make privately. With little cost to government, this simple tax shift would remove unearned income from resource speculation and enable tax reductions on wages and business.

Until economic justice and reason prevail with a major tax shift from production (jobs, houses, trade) to resource values (raw land, water, oil) the world will continue to suffer from monopolies of nature and economic turmoil.

If you'd like to know more about these subjects, from a Georgist point of view, you might explore these pages:

boom-bust cycles  | Adam Smith |  David Ricardo  |  Henry George | classical economists  | land  | labor |  capital | factors of production | well-provisioned ship  |  all benefits go to the landholder | growing rich in one's sleep  | technological progress | population growth  |  he who produces | pollution  |  pay for what you take |  unearned increment | land speculation  | privatization  | commons  |  enclosure  | sprawl

John packed a lot into a single letter, and I'm glad the editor had the sense to print it.  Now, if only more of us understood what John does.

On a well-provisioned ship, how is it that 6% of us consume ~25% of the resources?

As we, perhaps, become somewhat more appealing to the other 94% of the globe's residents as a result of the choice the voters made on Tuesday, we still need to consider the question of the rightness and the sustainability of a country which has 6% of the world's people consuming about 25% of the world's resources.

There is the theory of American exceptionalism. A Google search provides the Wikipedia definition of American exceptionalism; The second thing Google brings up is a recent book review from The American magazine:

Understanding American Exceptionalism

By Karlyn Bowman Monday, April 28, 2008

An ambitious new book explains how and why the U.S. is so different from other countries around the world.

“America is indeed exceptional by any plausible definition of the term and actually has grown increasingly exceptional [over] time.” This is the conclusion of the editors of a new volume, Understanding America: The Anatomy of an Exceptional Nation (PublicAffairs, $35). At an American Enterprise Institute conference on April 22, Peter H. Schuck and James Q. Wilson introduced the collection of essays, which is designed to probe Alexis de Tocqueville’s observation that America is “exceptional,” or qualitatively different from other countries. The book, which examines 19 different areas, marshals the best and most current social science evidence to examine America’s unique institutions, culture, and public policies.

During his introductory remarks, AEI president Christopher DeMuth said that no effort to understand the meaning of American exceptionalism had been “more ambitious and far-reaching” than this book. Not only does it describe the ways — both good and bad — in which Americans differ from people in other nations, DeMuth said, it also considers whether American exceptionalism is likely to continue, and how it matters to the world. DeMuth noted that Americans are more individualistic, self-reliant, anti-state, and pro-immigration than people in many other countries. They work harder, are more philanthropic, and participate more in civic activities. On the negative side, America also has a higher murder rate than some other countries. 

Wilson noted that one of the best ways to understand American exceptionalism is to look at polls. Three-quarters of Americans say they are proud to be Americans; only one-third of the people in France, Italy, Germany, and Japan give that response about their own countries. Two-thirds of Americans believe that success in life depends on one’s own efforts; only one-third of Europeans say that. Half of Americans, compared to one-third of Europeans, say belief in God is essential to living a moral life. 

Three-quarters of Americans say they are proud to be Americans; only one-third of the people in France, Italy, Germany, and Japan say that about their own countries.

Negative views of America in polls today have been shaped by the Iraq war and by the response to President Bush, Wilson noted, but criticism of America has a long history, particularly among elites. He quoted Sigmund Freud as saying, “America is a great mistake.” “Anti-Americanism was an elite view,” Wilson continued, “but it has spread deeper to publics here and abroad.” 

Schuck said that Understanding America casts a new light on American exceptionalism by examining it at a micro level. He identified seven overarching themes that connect the essays. 

(1). American culture is different. Its patriotism, individualism, religiosity, and spirit of enterprise make it different. The United States, Schuck said, “is more different from other democracies than they are from one another.” 

(2). American constitutionalism is unique in its emphasis on individual rights, decentralization, and suspicion of government authority. 

(3). Our uniquely competitive, flexible, and decentralized economy has produced a high standard of living for a long time, even though it now generates greater inequality. 

(4). America has been diverse throughout its history. Schuck cited research by historian Jill Lepore, who found that the percentage of non-native English speakers in the United States was actually greater in 1790 than it was in 1990. The thirst for immigration, he said, has transcended economic booms and busts. 

(5). The strengths of civil society here make America qualitatively different. No other country, he said, allocates as much responsibility for social policy to the nonprofit sector. 

(6). The characterizations of the United States as a welfare-state laggard compared to Europe miss an element of American distinctiveness: its reliance on private entities to provide certain benefits. 

(7). We are exceptional demographically with our relatively high fertility rate. 

... The editors of Understanding America, Schuck and Wilson, believe that the “stakes in understanding America could hardly be higher. For better or worse, America is the 800-pound gorilla in every room in the world.” 

Karlyn Bowman is a senior fellow at the American Enterprise Institute and a contributing editor to THE AMERICAN.

Americans are consuming roughly 25% of the world's natural resources, despite representing only 6% of the world's people.  As others  see themselves as our equals -- equally entitled to the world's resources, including the carrying capacity of the environment to handle the pollution we spew out, how are we going to reconcile the notion that all men are created equal with their very reasonable expectation that they are equally entitled -- and further, that future generations are entitled to inherit a world that works and a planet with resources available to meet their needs, too -- not to mention, within the US, the younger generation's very reasonable right to not be paying for our generation's wars and mistakes?

And then remember that within the US, the top 1% of wage-earners are getting 12% of wages; the top 10% are getting nearly 36% of wages.  When we look at all income excluding capital gains, the top 1% of income recipients are receiving nearly 20% of income and the top 10% are receiving 47% of income.  When we look at income including capital gains -- the most inclusive measure -- the top 1% are receiving nearly 23% and the top 10% nearly 50% of income.   [Source: Piketty & Saez, 2006 data]

And when we look at the accumulated net worth of Americans, in 2004 the top 1% of wealthholders had over 33% of the net worth; the top 10% of wealthholders held nearly 70% of America's household wealth. [Source: FRB Survey of Consumer Finances, 2004.]

How much of that wealth is created out of thin air, without the use of natural resources?   We've learned a bit about assets created from thin air, and we may have reason to worry greatly in coming months about the moods and portfolios of those who invested heavily in hedge funds.  But I'm willing to bet that were we to get a new snapshot of the same statistics for, say, October 31, 2008, the wealth concentration would be little a bit higher than 2004's.  (The 2007 data will likely be available in January, if previous publication patterns hold.) 

Natural resources and resources which are rightly common property -- the economic value of land, of broadcast spectrum, of water rights, of landing rights, of many other like things, which the neoclassical economists would recognize as "land," as opposed to "capital"  -- have been privatized -- quite legally -- to produce the wealth and income concentration which America lives with.  They've played by the rules -- but the rules aren't just or right.  It is time to revise the rules and the structures. 

By doing so, we can do something about our excessive use of the world's scarce resources; reduce urban sprawl; shorten commutes; increase urban density; encourage job creation, raise wages, reduce wealth concentration, improve the economy's efficiency, remove much of the deadweight loss, motivate the private sector to provide, at a profit, affordable housing for all.   And reduce our overuse of the world's natural resources significantly, making us an example to the rest of the world of what to do and how to do it, rather than the opposite.

Too much to ask of one reform?  Too much to ask for?  NO!

 

How do we reduce the demand for energy?

As I listen to and read about attempts to reduce pollution, reduce reliance on foreign oil, reduce energy usage, I find myself frustrated by the lack of radicalism in the answers people propose.  Their answers aren't wrong, but they don't go to the source of the problem, and so merely nibble around the edges.  Nibbling is fine and admirable, and definitely has its place.  And nibbling will make a bigger difference if they are nibbling at a circumference of 2X instead of X, though a larger percentage difference if we can get to a circumference of X.  

The current Vice President asserted a few years ago that the American way of life was non-negotiable. 

Well, if that means that what is is good -- the ultimate conservatism -- keep things just as they are because we live in the best of all possible worlds -- or -- it works just fine for my and my kind thank you very much -- a case one might reasonably make if one were in the top 1% of the wealth and income spectra, which, as I frequently mention here, receive a very disproportionate share of the productivity in this country:

1. The top 1% of income recipients -- and I'm using income excluding capital gains for the moment -- have received 36% of the aggregate income gains from 2000 to 2006.
2. The next 4% of income recipients have received 17% of the income gains between 2000 and 2006.
3. The next 5% of income recipients have received 14% of the income gains between 2000 and 2006
4. The bottom 90% of income recipients have received 33.1% of the income gains between 2000 and 2006.     

For comparison: in 2000, the top 1% had 16.5% of the income excluding capital gains; the next 9% had 26.6%, and the bottom 90% had 57.8% of the income; by 2006, the corresponding figures are 18.2%, 27.0% and 54.7%.  [Source, my calculations from Tables A1 and A0 of Piketty and Saez's spreadsheet through 2006.]

Is this the non-negotiable American way of life to which the Vice-President was referring?  I suspect that, at bottom, it is.

So why should we change anything, if the machine is working so well for those at the top? 

• So what if this machine uses excessive amounts of the world's natural resources? 
• So what if it produces more than our legitimate use of the world's carrying capacity for dealing with pollution of air and water?
• So what if, in order for us to be rich, others must be poor -- very poor? 
• So what if, in order to us to continue to drive our cars everywhere we need or want to go, we need to import oil drilled in other parts of the world?
• So what if, in order for our powerful to maintain their privileges, we impinge on the rights of our own people, the rights of our contemporaries in other countries, and on the rights of future generations both here and abroad?

  Ah - I've not answered the initial question.  I'll come back to that in a future post, I guess -- because I think there are some very obvious answers to that question -- obvious to Georgists, anyway -- whose widespread understanding could make a big difference. 

Progress, and Poverty -- how do they relate?

I suspect that many people relate these two words, without quite knowing why.  A google alert on the two words brings me 4 to 6 items a day which mention the two words fairly close together.  In many the context is "We're making progress against poverty."  In others, the context is more like "we're making progress in many areas, but little progress against poverty." 

Putting those two words into the search field at Amazon yields these books:

• The Poverty of Progress: Latin America in the Nineteenth Century by E. Bradford Burns (1983)
• Progress, Poverty and Exclusion: An Economic History of Latin America in the Twentieth Century (Inter-American Development Bank) by Rosemary Thorp (1998)
• Poverty and Progress: Social Mobility in a Nineteenth Century City (Joint Center for Urban Studies) by Stephan Thernstrom (1981)
• Poverty, Progress, and Population by E. A. Wrigley (2004)
• Poverty and Economic Issues (Africa: Progress & Problems) by Tunde Obadina (2006)
• Progress and Poverty: An Economic and Social History of Britain 1700-1850 by Martin Daunton (1995)
• The Other Bostonians: Poverty and Progress in the American Metropolis, 1880-1970 by Harvard University Press (1999)
• Poverty and social progress, by Maurice Parmelee (1926)
• Poverty and Progress (Down to Earth) by Fred Martin and Aubrey Whittle (1990)
• Poverty and Progress in the Caribbean, 1800-1960 (Studies in Economic & Social History) by J.R. Ward (1985)
• Progress, Poverty and Population: Re-reading Condorcet, Godwin and Malthus by John Avery (1997)
• The Time Has Come: To Confront the Tragedy of World Poverty Through Centers of Village Progress by James Mayfield (2006)
• Poverty and Progress in the U.S. South since 1920 (European Contributions to American Studies) by Suzanne W. Jones and Mark Newman (2006)
• Profits, Progress and Poverty by Richard N. Farmer (1985)
• Poverty and progress;: An ecological perspective on economic development by Richard G Wilkinson (1973)
• Poverty Reduction and the World Bank: Progress in Operationalizing the Wdr 2000/2001 by World Bank (2002)
• The Developing Nations Poverty and Progress (Volume 41, Number 1) by Irwin (Editor) Isenberg (1969)
• Poverty and Progress in New Zealand by W. B. Sutch (1969)

All of these books together can not have come close to the sales of Henry George's 1879 book, Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth; the remedy.  By the turn of the century, over 6 million copies had been sold, it had been translated into 30 or so languages, serialized in newspapers in a number of countries. [6 million copies would be a large number today ... think of it in 1885!] Today, there are at least two foundations, created by industrialists of another era (using identical language), whose missions are to share Henry George's ideas, as expressed in Progress & Poverty -- the Robert Schalkenbach Foundation (based in NYC) and the Lincoln Foundation (with offices in Cambridge, MA), founded, respectively, by a printer and an electric utility magnate.  Joseph Fels, of the Fels Naptha soap company (and brother of the endower of the Fels Planetarium at Philadelphia's Franklin Institute) also devoted much of his mature years to promoting these ideas. 

George's Progress & Poverty was the #2 best seller of its decade, second only to the Bible, and the "progress" in its title helped inspire the Progressive movement.  Anyone in English-speaking countries who read at all was likely to be familiar with its ideas, and George was an effective speaker who traveled widely.  In NYC, he ran twice for mayor; the first time, he lost to Abram Hewitt (the Tammany Hall candidate) in 1886, but beat out the 29-year-old Theodore Roosevelt (whose Bull Moose Party platform about 25 years later looked remarkably Georgist; it is said TR learned his George at San Juan Hill, from a hero who died there); the second time, he died a few days before election day in 1897.  His funeral was among the largest ever in NYC.  (Search the NYT's free archives for articles.)

So what sets Henry George's Progress & Poverty apart from the other books which mention those two words in their titles?  Why did he choose that title?  What is the relationship between these two aspects of our society?  Is it a necessary relationship, ordained by immutable natural forces or laws of economics, or is it something created by human structures, and therefore something we can alter?

George saw clearly something that others had seen through a glass darkly.  He laid it out clearly in Progress & Poverty.  Extend your education by reading this book.  It will probably change your mind and your vision forever, and if enough of us understand the workings of the poverty machine, we will be able to retool it, and leave our children a better world, and a country which genuinely lives up to its ideals.

Progress and Poverty.  You might also want to go read the first essay in George's second book, Social Problems.  It is very timely.

Pulitzer Prize Winner Stresses Ethical Taxation

Pulitzer Prize Winner Stresses Ethical Taxation. Pulitzer Prize Winner Stresses Ethical Taxation September 29th, 2008 · Events · Posted by Behnaz Abolmaali

The fundamental starting point for democratic government began with taxation, said David Cay Johnston, a Pulitzer Prize-winning author and former New York Times investigative journalist, during a speech to McCombs accounting students Sept. 24.

Johnston, who came to UT as part of the Lyceum Speaker Series, told students that the ideas about taxation and society that have prevailed since Ronald Reagan’s time favor a system in which money is systematically funneled from the poor to benefit the rich.

“People who think that taxes are a cost will do virtually anything to eliminate that cost,” Johnson said. “Taxes are not a cost. Taxes are a moral obligation.”

The ancient Athenians, he said, developed democracy by instilling a guiding moral principle in tax laws: that the greater the wealth one has built up, the greater their moral obligation to helping society continue.

As readers of this blog know, I am a great admirer of David Cay Johnston.  I generally think he is on the right track, and/but (shifting metaphors and transportation systems) think he has some blinders on.

In the quote in the preceding paragraph, I think he is bringing up a vitally important matter, but he hasn't followed it to its logical root, and is thereby missing perhaps the most vital aspect of the subject.

A Budget is a Moral Document

A few days ago I received a mailing from a friend, incorporating (with permission) something I wrote a while ago, and had mostly forgotten about.  I think it is worth sharing here; I'll expand on bits and pieces of it, as the spirit moves me.

It has been said that a budget is a moral document.  Usually that is construed to refer to the spending side of the budget.  But it is equally and importantly true of the revenue side.  When we tax the wrong things, we get undesirable effects.  When we fail to tax that which we should tax, we get undesirable effects as well.  [I might add that an individual's revenue which comes from stealing from others is also a very poor idea -- even when the theft is legal!  Chattel slavery certainly fit in this category, as did the industrial slavery Douglas Blackmon described in his recent book.]
    
With other Georgists, I seek a shift in how we tax ourselves which will produce a better world for all of us. Land value taxation will have important effects in many areas which concern most Americans:

• slowing, stopping and reversing urban sprawl
• urban blight
• improve wages, without raising the cost of living
• spur job creation -- here
• poverty eradication
• wealth concentration
• education funding
• reduce long commutes
• excessive energy usage
• reducing greenhouse gases
• economic development
• infrastructure finance
• boom-bust cycle

The term LAND includes not just the value of urban land, which is huge (and currently underreported and thus ignored, despite being the underlying source of huge fortunes), but also the rest of the natural creation ...

• broadcast spectrum -- those airwaves which we all say (complete the sentence)  ... belong to the American people, but which have been sold to corporations
• water rights (ditto)
• natural resources, particularly the non-renewables
• congestion in the skies and at location³ airports
• geosynchronous orbits
• and many others -- see Mason Gaffney's paper, The Hidden Taxable Capacity of Land: Enough and to Spare, here

Land Value Taxation (LVT) can solve a lot of problems and set the stage for solving many others.  Most of us believe that without this taxation reform, none of these problems are solvable; all we can do is place small bandages on them and spend a lot of money on programs which help relatively few victims.

We seek a society with NO VICTIMS.

How Much Oil Do We Use?

Research for a blog post below led me to an interesting page at http://politicalcalculations.blogspot.com/2008/06/how-much-oil-do-individual-americans.html which provided the statistic that on average, Americans use 2.58 gallons of oil per day per capita  This has remained remarkably consistent over the past 25 or so years. (The graph is quite interesting.)

Valuing life, and applying fiscal stimulus, and setting us all equal

If we are going to claim to value every life, and encourage every pregnant woman to bring every fetus to term, we need to acknowledge that every child born is the equal of every person already born.  Interestingly, Alaska has been doing something important in this regard, for more than 20 years.

Every man, woman and child who lives in Alaska receives an annual income from the Alaska Permanent Fund, which represents dividends from the invested proceeds of Alaska oil revenue, and which, if properly managed, will continue to provide an annual income for every Alaska long after the oil has all been tapped. And Alaska's governor has had the fortitude to increase the share of the public in Alaska's oil revenue due to the high price of oil. (See another post on the subject from a few days ago.)

(And much of Alaska's state government spending comes from oil revenues, too.)

Our oil is not the only resource that needs to be treated this way.  Urban land values can be hundreds of thousands of times the value of an acre of agricultural land.  There is an acre in Manhattan said to be worth $400,000,000 to $1,100,000,000 -- as a teardown.  If we were to tax that land value at, say, 5% per year, at $400,000,000 it would produce $20 million in income for we-the-people, relieving the need for $20 million in sales taxes, or $20 million in payroll taxes, or $20 million in income taxes.  Talk about fiscal stimulus!  Talk about a permanent tax holiday! Talk about getting the incentives right!  

Port Authority to Fight Federal Proposal to Auction Airport Landing Slots - NYT

Link: Port Authority to Fight Federal Proposal to Auction Airport Landing Slots - NYT

The Port Authority of New York and New Jersey announced plans on Monday to block the Bush administration’s proposal to auction landing slots at La Guardia, Newark and Kennedy Airports by banning any airliner that used an auctioned slot. ...

But the Port Authority says the auctions would do nothing to reduce congestion and would amount to an unauthorized new tax. “They’re going to be selling something that doesn’t belong to them, in an attempt to raise revenue,” Mr. DeCota said.

The airlines are also adamantly against an auction.

The Transportation Department’s top lawyer, D. J. Gribbin, said that such a ban by the Port Authority “vastly outstrips any authority they have.”

“We clearly have the authority, as we’ve done with orders that currently exist, to determine which carriers can access the airports at what times,” he said. And the slots belong to the public, according to the Transportation Department. ...
 

Do you own an oil company?

That's the tag line of a commercial appearing on news programs. I'm sure I'm not the first blogger to be troubled by the attempt to suggest that ownership of oil companies is broadly middle class.

The two ads I've seen are titled "Who really pays when Congress taxes oil companies?" and "Do you own an oil company?"

Thoughts for Barack Obama

A friend sent me a link to a page where one can make policy suggestions to Barack Obama's campaign.  Turns out to be a thinly veiled way to harvest emails.  But maybe somewhere in the campaign, someone might actually read the suggestions.

One of the fields was a dropdown menu so one could categorize one's proposal.  I chose "economy" but made the first line of my policy proposal a list of a number of categories into which mine falls:

Issues: Economy, Energy, Environment, Ethics, Family, Infrastructure, Justice, Labor, Poverty ... and maybe even health --  

Luke Russert's tribute to his father: a new political party?

link: http://www.washingtonpost.com/wp-dyn/content/article/2008/06/18/AR2008061801173.html
These paragraphs caught my eye ...

Luke Russert said that whenever he did well on a school assignment, his father would yell, "Yahoo! You smoked 'em, buddy!"

He asked the crowd to imagine a special edition of "Meet the Press" this Sunday in heaven, perhaps with a debate between Alexander Hamilton and Aaron Burr, or John F. Kennedy and Barry Goldwater. He even suggested a talk on the need for a new political party involving Teddy Roosevelt, the former president who later ran unsuccessfully for president as a member of the Bull Moose party.

What was the platform of that party?  You might be surprised, both by its timeliness and by its similarity to the ideas of Henry George, who came in #2 in the 1886 NYC mayoral election in which TR was #3. (Tammany Hall won, and the circumstances would not surprise most people troubled by some of our recent national elections.)   

McCain, Obama stake out divergent paths on taxes - Yahoo! News

Link: McCain, Obama stake out divergent paths on taxes

And neither of them gets it right.  They are proposing different arrangements of the deck chairs, and while one may provide a slightly better view of the orchestra, and the other better accoustics for enjoying the music, neither of them understand either what needs to be done or why.

Oil, Land, Water -- who among us is entitled to privatize their value?

Land, water, oil, air ... none of it is of our creation, and all of us depend on access to them.  If dollars are involved, to whom should they flow, and why?  If royalties are due, who is entitled to them? If rent happens, as it does in any place where there is a scarcity, who is entitled to it?

Is it the fellow whose land is in high demand?  Is it the fellow whose land has valuable minerals in it? Is it the fellow whose property is on a great aquifer?  Is it the great-great-grandchild of the Duke of Westminster, or of the first Caucasian settlers on a particular piece of land, or of someone to whom they sold title?   LVTfan says not. 

Alaska Oil Revenues Tally High

link: http://www.alaskajournal.com/stories/060808/hom_20080608002.shtml

Alaska treats as its common treasure a significant share of the economic value of its oil.  Oil revenues finance a significant part of Alaska spending (supplemented by generous amounts of federal pork brought home by powerful senators who argue that because Alaska is such a new state and relatively low in population, the rest of us should be financing their infrastructure needs).  And a portion of the oil revenue goes into the Alaska Permanent Fund, which is invested in a diversified portfolio and provides annual payments to every man, woman and child in Alaska.  One of the results is that Alaska has among the lowest range of incomes,because even a low-income person in Alaska receives an annual dividend from that invested oil money.  Pretty smart, huh?

Is LVT the answer to all our problems?

My local newspaper has set up a facility to permit comments on articles and opinion pieces, and I frequently respond to what I read.  Yesterday, I posted a comment to an article entitled Office owners strive to retain tenants whose thumbnail description says "In tough times, office building owners often look for other sources of tenants besides relocations to their properties."  Today I went back and someone had posted the comment, " Your sole issue is land value tax. Am I right?"

 

Krugman: Stranded in Suburbia - New York Times

Link: Stranded in Suburbia - New York Times.

If Europe’s example is any guide, here are the two secrets of coping with expensive oil: own fuel-efficient cars, and don’t drive them too much.

Notice that I said that cars should be fuel-efficient — not that people should do without cars altogether. In Germany, as in the United States, the vast majority of families own cars (although German households are less likely than their U.S. counterparts to be multiple-car owners).

But the average German car uses about a quarter less gas per mile than the average American car. By and large, the Germans don’t drive itsy-bitsy toy cars, but they do drive modest-sized passenger vehicles rather than S.U.V.’s and pickup trucks.  ...

Can we also drive less? Yes  —  but getting there will be a lot harder.

There have been many news stories in recent weeks about Americans who are changing their behavior in response to expensive gasoline — they’re trying to shop locally, they’re canceling vacations that involve a lot of driving, and they’re switching to public transit.

But none of it amounts to much. For example, some major public transit systems are excited about ridership gains of 5 or 10 percent. But fewer than 5 percent of Americans take public transit to work, so this surge of riders takes only a relative handful of drivers off the road.

Any serious reduction in American driving will require more than this  —  it will mean changing how and where many of us live.

Are you going to be part of the problem, or part of the solution?

This was the headline of an email that came into my inbox today.   And it dawned on me that it is a fine angle from which to view the benefits of land value taxation. 

Why Smart People should shun the "FairTax" concept

I came across a piece entitled "Why Democrats should love the FairTax," written by Laurence J. Kotlikoff, a professor of economics at Boston University, an economic adviser to Mike Gravel and a consultant to FairTax.org.

I continue to be amazed how even economists, who should know better -- far better -- than to even think about a sales tax as a solution to anything, can be in favor of such an alternative.

a tax reformer does the family 1040's

I've heard it said that voting and paying taxes are two of the major sacraments of citizenship. Having spent a significant part of the past week working on the machinations of the latter for several different family members, I am weary of the sacramental qualities of income taxes.  It isn't that I think taxes are a bad thing.  But our current system of taxation is both fundamentally wrong and, having said that, unbelievably convoluted.

Most of the commentators I read and hear are only interested in simplifying the income tax. A few propose getting rid of the income tax and replacing it with a sales tax, which I regard as simpler, but nearly as evil as an income tax from a number of points of view.   And that puts aside the question of whether the necessary rate for the so-called "FairTax" is 23% (or 30% in the way we're used to thinking of sales taxes) or closer to 60%, as I understand is more realistically the case.

The Purpose of Government

I received in an email recently a quote from Albert Einstein:

A clever person solves a problem; a wise person avoids it.

Taxes as oppression, taxes as incentives: Alabama

Friday night's PBS NOW and Bill Moyers Journal were a powerful combination.   My local station shows NOW first, followed immediately by BMJ.  NOW showed three families in Alabama, including a hard working couple whose income places them at roughly the poverty level.  They pay sales taxes of 10% on their purchases, even on food.  They only recently got indoor plumbing.

The footage also showed one of my heroes, Susan Pace Hamill, law professor at the University of Alabama, who has written several important papers, all available online [and highly recommended], about the inconsistency of Alabama's tax code [2002] and of the federal tax code [2006] with the ideals we say we hold dear.  I applaud her efforts and her scholarship and her good heart ---  and I don't think she sees the half of it, or the solution.

Fixing Wages, and Fixing Housing Affordability -- for All of Us

By this, I mean fixing the problem of low wages -- wages insufficient to support an individual or a family in conditions we consider acceptable on a reasonable number of hours of labor per week.  I don't mean minimum wage legislation, or living wage legislation, both of which I regard as well-intentioned but ultimately destructive for the community they intend to help.  I don't mean measures like the Earned Income Tax Credit, either.  It appears that people must jump through high hoops to get those dollars (which often seems to require professional advice, at a price), and then a significant portion of the money goes not to the wage earner but to his tax preparer/advisor, in the form of fees and interest.

Want to Buy Some Pollution? A Good Start

Link: http://www.nytimes.com/2008/03/15/opinion/15bowles.html

Here are the first 4 paragraphs of an excellent NYT op-ed by Ian Bowles, the secretary of energy and environmental affairs for Massachusetts.

Several things caught my eye ... I'll write about them below.

Who Benefits From This Mortgage Mess -- and From the Proposed Solutions? Is there an alternative?

No one seems to be talking about "cui bono?" in this situation.    But there were some big beneficiaries, and I think we need to acknowledge that; and the awareness of the dynamics might just lead us in some productive directions.

Americans and Golf, and the local assessor

For the past few days, an article entitled "More Americans Are Giving Up Golf" has been on the NYT's "most emailed" list.  A few excerpts:

“The problem is time,” offered Walter Hurney, a real estate developer. “There just isn’t enough time. Men won’t spend a whole day away from their family anymore.”

The five men who met here at the Wind Watch Golf Club a couple of weeks ago, golf aficionados all, wondered out loud about the reasons. Was it the economy? Changing family dynamics? A glut of golf courses? A surfeit of etiquette rules — like not letting people use their cellphones for the four hours it typically takes to play a round of 18 holes?

Or was it just the four hours?

Here on Long Island, where there are more than 100 private courses, golf course owners have tried various strategies: coupons and trial memberships, aggressive marketing for corporate and charity tournaments, and even some forays into the wedding business.

Rodney B. Warnick, a professor of recreation studies and tourism at the University of Massachusetts, said that the aging population of the United States was probably a part of the problem, too, and that “there is a younger generation that is just not as active.”

But golf, a sport of long-term investors — both those who buy the expensive equipment and those who build the princely estates on which it is played — has always seemed to exist in a world above the fray of shifting demographics. Not anymore.

Surveys sponsored by the foundation have asked players what keeps them away. “The answer is usually economic,” Mr. Kass said. “No time. Two jobs. Real wages not going up. Pensions going away. Corporate cutbacks in country club memberships — all that doom and gloom stuff.”

In many parts of the country, high expectations for a golf bonanza paralleling baby boomer retirements led to what is now considered a vast overbuilding of golf courses.

Between 1990 and 2003, developers built more than 3,000 new golf courses in the United States, bringing the total to about 16,000. Several hundred have closed in the last few years, most of them in Arizona, Florida, Michigan and South Carolina, according to the foundation.

“Years ago, men thought nothing of spending the whole day playing golf — maybe Saturday and Sunday both,” said Mr. Rocchio, the public relations consultant, who is also the New York regional director of the National Golf Course Owners Association. “Today, he is driving his kids to their soccer games. Maybe he’s playing a round early in the morning. But he has to get back home in time for lunch.”

This struck me as I thought about one of the things I see in my town's property tax assessments.  The private golf clubs have been given very generous (low) assessments.  Where surrounding land is selling for $400,000 per acre, the 3 private golf courses are assessed at $140,000 per acre (that's the 100% figure, not the CT 70%).

What a kind gift to give those who own or benefit from these private parks!  But I've got a real problem with asking the low-income homeowners of my town to subsidize those who  can afford expensive club memberships.  No, more precisely, I've got a problem with all the non-members -- probably 99% of the property-owners in town -- being asked to subsidize the club members. [And the golf course assessments aren't the worst assessment gift in my town.  I'll post on that one soon.]