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!
National Debt. — "A national debt, like any other, may be honestly
incurred in case of need, and honestly paid in due time. But if a man
should be ashamed to borrow, much more should a people; and if a father
holds it his honour to provide for his children, and would be ashamed to
borrow from them, and leave, with his blessing, his note of hand, for
his grandchildren to pay, much more should a nation be ashamed to
borrow, in any case, or in any manner; and if it borrow at all, it is at
least in honour bound to borrow from living men, and not indebt itself
to its own unborn brats. If it can't provide for them, at least let it
not send their cradles to the pawnbroker, and pick the pockets of their
first breeches. A national debt, then, is a foul disgrace at the best.
But it is, as now constituted, also a foul crime. National debts paying
interest are simply the purchase, by the rich, of power to tax the
poor." — John Ruskin, quoted in The Christian Socialist (London), December, 1883.
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.
No generation of men can or could, with never such solemnity and
effort, sell land on any other principle; it is not the property of
any generation, we say, but that of all the past generations that
have worked on it, and of all the future ones that shall work on it.
— THOMAS CARLYLE, Past and
Present, Book III., Chap. 8.
The law of nature suggests that on the death of the possessor, the
estate should again become common and be open to the next occupant,
unless otherwise ordered for the sake of civil peace by the positive
law of society.
— SIR WILLIAM BLACKSTONE,
Commentaries, Book II., Chap. I, p. 13.
I would love to see a map showing what states the people who take the income tax deduction for home mortgage interest live. I think we'd find it was the so-called Blue states, where the value of land is higher, and wages are higher, and property taxes are higher.
Funny that we're willing to help subsidize the borrowing necessary for some people (buyers) to paying off other people (sellers) for value the sellers didn't create! And then we don't tax those so-called "capital" gains much at all! A few communities collect a few percent of each transaction, which isn't a great idea either, particularly when it is collected from the buyers, who likely borrow it!
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.
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.
"I find this vast net-work, which you call property, extending over the whole planet. I cannot occupy the bleakest crag of the White Hills or the Allegheny Range, but some man or corporation steps up to me to show me that it is his."
— EMERSON, The Conservative.
Extended excerpts from The Conservative (an 1841 speech) follow ...
37. Our ancestors bought or stole the land which the ancestors of some of those now identified as "Native Americans" relied on. How should we and our children pay back them and their children?
A. By giving them the privilege of selling cigarettes without taxes, forgoing revenue that could help meet the health costs associated with smoking, both for smokers and for those who live with them.
B. By giving them the privilege of running casinos, even if a percentage of that revenue must be contributed to the state, and even if gambling is creates tremendous problems for some individuals in society, beyond those who actually gamble.
C. By collecting from everyone who owns land and natural resources the annual economic value, and giving everyone a per-capita share of those resources, every year, forever. (Similar to the Alaska Permanent Fund)
D. By collecting from everyone who owns land and natural resources the annual economic value, and giving everyone a per-capita share of those resources, every year, forever, and providing a double share to those who are starting from a disadvantaged position for some fixed number of years
E. By collecting from everyone who owns land and natural resources the annual economic value, paying the costs of government and common spending from that source, producing equal opportunity for all.
29. The states need money. Should they sell their toll roads to private companies?
A. Sure! That would provide a nice pot of money that would help with this year's budget and next year's, and after that, we can leave the problem to a future group of legislators and a new governor!
B. Sure! The private sector will take better care of them and turn a profit to boot!
C. No. The taxpayers paid for those roads to be built, and have a right to more control over them than would exist after privatization.
D. No. The taxpayers own that land, a unique right of way, and selling it off forever is irresponsible and wrong!
E. No. Our society -- any society -- is highly dependent on our infrastructure, and control over it must remain in the public sector.
F. No. Those highways are built on land that was bought or taken from individual property owners for the public good. To turn them over to the private sector, for profit, would be wrong.
G. No. Those highways will increase in value over the coming decades and centuries, and should not become anyone's private property, at any price. Both their economic value and the control over them belongs in the common sector.
H. No. Even if it looks as if it might make sense for our generation, what of future generations? Should we permit the privatization of a common asset they will likely be dependent on?
I. No. Future taxpayers will build more highways intersecting with these current tollroads, and increase their value; were these to be privatized, it would be the private corporation who would reap the benefit of that future public investment.
A. Don't worry about that. Our children should pay for it, and their children if necessary, with interest accumulating. The economy will grow sufficiently that it will not unduly burden them.
B. We should pay for it via federal taxes on wages.
C. We should pay for it via a federal tax on sales (or consumption).
D. We should pay for it via a federal tax on land value; people and corporations (domestic or foreign) who own land in midtown Manhattan or downtown Los Angeles would pay a lot; those who own rural property would pay little or nothing. Tenants' rents -- residential, commercial, agricultural -- would cover their share, and be collected from landlords.
E. We should pay for it via royalties on non-renewable natural resources. (Whose natural resources? from U.S. soil? from Afghanistan soil? other?)
When the structures that our laws and traditions create provide opportunities for someone to capture a windfall, should we blame the fellow who "takes advantage" of those structures, or should we respond by studying and correcting those structures and laws?
Winston Churchill, in his speeches under the baanner "The People's Rights," in 1909, said this:
I hope you will understand that when I speak of the land monopolist I am dealing more with the process than with the individual landowner. I have no wish to hold any class up to public disapprobation. I do not think that the man who makes money by unearned increment in land is morally a worse man than anyone else who gathers his profit where he finds it in this hard world under the law and according to common usage. It is not the individual I attack, it is the system. It is not the man who is bad, it is the law which is bad. It is not the man who is blameworthy for doing what the law allows and what other men do; it is the State which would be blameworthy were it not to endeavour to reform the law and correct the practice. We do not want to punish the landlord. We want to alter the law.
The 99% need to start identifying the laws and structures that must be adjusted. This is not easy work.
What individuals produce, and corporations produce, should not be "there for the taking" -- be it by corporate management in the form of hugely generous compensation packages and golden parachutes, or by simply saying "these resources are OURS, not everyone's" or by establishing monopolies or duopolies or other such structures. We-the-people need to educate ourselves about how things are done now, who benefits from that, and what alternatives exist. It won't be easy. We'll be challenging special interests who somehow think they're entitled to their advantaged positions, and the rest of us exist to keep them comfortable.
Labor should get its share, and capital should get its share, and we-the-people should get land's share. That last could fund a large portion of our common spending, on infrastructure and services, and permit us to reduce or eliminate the dumb taxes which take which individuals and corporations legitimately create. That "keeping what we create" extends, also, to "externalities," to being responsible for the pollution we create, and setting up incentives so that it is minimized, for the good of all of us now here and the good of future generations.
I think it is quite possible, even likely, that a few years after we've made this shift in who gets what, we'll find that we don't need nearly so robust a social safety net, and that we-the-people may get some of "land's share" back in the form of a Citizen's Dividend, just as all permanent residents of Alaska receive an annual dividend from the Alaska Permanent Fund.
In any case, letting some corporations and some individuals grab that which we all create together is just plain wrong. Letting it be "there for the taking" is insanity and injustice. And don't we pledge "liberty and justice for all?"
Our ancestors may have granted some privileges to some lucky folks for one reason or another. That doesn't mean that we can't, politely and firmly, revoke those privileges. A couple of centuries is plenty. Experience has shown us that those privileges don't serve the greater good, and it is time to revoke them. Will the privileged give up those privileges graciously? Quite possibly not. But the first step is to identify them, and then to seek to change the system so that those rightly-common assets aren't "there for the taking."
Thomas Jefferson, founder of the Democratic party in America, was born in Virginia, April 2d, 1743. In 1769 he entered politics, and at once took rank in the progressive party destined soon to dominate American aflairs. At the first convention in Virginia, held independently of the British authorities, he was marked as a bold, radical, and a fearless tribune of the people.
Jefferson was one of the foremost leaders of the agitation against British taxation without representation, writing in 1774 an aggressive article entitled, "A Summary View of the Rights of America." This was so widely read, and so fired with the revolutionary spirit against England, that, as Jefferson said, "he had the honor of having his name inserted in a long list of prescriptions, enrolled in a bill of attainder, commenced in one of the two Houses of the English Parliament, but suppressed in embryo by the hasty course of events." This pamphlet was the forerunner of Jefferson's greatest achievement, the Declaration of Independence, which he wrote while a member of the American Congress.
Jeffersonians of today have read with amused interest of an incident illustrating the stupid conservatism which existed a century ago as well as now. A lady of Tory proclivities who lived in Philadelphia on Fifth street, opposite the State House, wrote in her diary under date of July 8, 1776: "A Declaration of Independence was read today in the State House yard, very few respectable people were present."
In 1779 Jefferson became Governor of his State, and shortly afterwards was appointed embassador to France. In 1790 he became Secretary of State for the United States. In 1796 he was a candidate for the Presidency, but was defeated, acting then as Vice President. In 1801 he was elected to the Presidency by a large majority. He died July 4, 1826.
One of his biographers speaks of him as "frank, earnest, cordial and sympathetic in his manner, full of confidence in men, and sanguine in his views of life, eschewing all pomp and ceremony."
The keynote of his principles was liberty. He asked that the inscription on his tombstone should be: "Here lies buried Thomas Jefferson, author of the Declaration of American Independence; of the Statute of Virginia for Religious Freedom; and Father of the University of Virginia."
In other words, he devoted his life to civil liberty, religious liberty, and education. Several times he attempted to pass laws emancipating the slaves. But such was the state of feeling against that measure at that time that it is but one of the many illustrations of Jefferson's grand courage in defense of what he thought right. As he said, "he never feared to follow truth and reason to whatever results they led, bearding every authority which stood in their way."
Jefferson's popularity with and influence over the people lay in the fact that he believed in them, trusted and respected them. Speaking of Gen. Washington he says: "The point on which he and I differed was that I had more confidence than he had in the natural integrity and discretion of the people."
Jefferson had no confidence in laws that were not based on the greatest freedom of the individual, in harmony with the true self-government of all. He was so fearful of tyranny of government, so zealous in maintaining the liberties of the people, that he was continually combating any increase of governmental functions, though there were moments due to the peculiar conditions of the times, when he had to ignore this idea.
"The basis of our government," said Jefferson, "being the opinion of the people, the very first object should be to keep that right."
Writing to James Madison on the moral limitations of a nation's right to contract debt, and realizing that all the wealth to pay that, all national debts, must come from the earth, Jefferson said:
"I set out on this ground, which I suppose to be self-evident, that the earth belongs in usufruct to the living; that the dead have neither powers nor rights over it. The portion occupied by any individual ceases to be his when he himself ceases to be, and reverts to the society. If the society had formed no rules for the appropriation of its lands in severality, it will be taken by the first occupants. These will generally be the wife and children of the decedent. . . . Then no man can by natural right oblige the lands he occupied, or the persons who succeed him in that occupation, to the payment of debts contracted by him. For, if he could, he might during his own life eat up the usufruct of the lands for several generations to come, and then the lands would belong to the dead, and not to the living, which would be the reverse of our principle.
"On similar ground it may be proved that no society can be made a perpetual constitution, or even a perpetual law. The earth belongs always to the living generation. They may manage it then, and what proceeds from it, as they please, during their usufruct. They are masters, too, of their own persons, and consequently may govern them as they please. Persons and property make the sum of the objects of government. . . .
"This principle, that the earth belongs to the living and not to the dead, is of very extensive application and consequences in every country. It enters into the resolutions of the questions whether the nation may change the descent of lands holden entail. Whether they may change the appropriation of lands given anciently to the church, to hospitals, colleges, orders of chivalry, and otherwise in perpetuity. Whether they may abolish the charges and privileges attached on lands, including the whole catalogue ecclesiastical and feudal. It goes to hereditary offices, authorities and jurisdictions; to hereditary orders, distinctions and appellations; to perpetual monopolies in commerce, the arts or science; with a long train of etceteras; and it renders the question of reimbursement a question of generosity and not of right. . . . . The present holders, even where they or their ancestors have purchased, are in the case of bona fide purchasers of what the seller had no right to convey."
Jefferson not only recognized the importance of the land question as effecting the welfare of the people, but his prophetic mind sounded this note of warning. "The people will remain virtuous so long as agriculture is our principal object, which will be the case while there remain vacant lands in America. When we get piled on one another in large cities, as in Europe, we shall go to eating one another as they do there."
The newest issue of Progress, an Australian Georgist publication, is online here. The motto is "Sharing the Earth So All May Prosper."
There is a lot of good material, and I'll share some of the things that caught my eye.
An article about a film entitled "Real Estate 4 Ransom" which I commend to your attention, wherever you live. (I'll keep you posted on the film itself.)
“Economist James Galbraith has noted that only 12 out of 15,000 economists in the US noticed the US$8 trillion dollar housing bubble” (page 6)
We propose a change in the tax mix so that future infrastructure pays for itself by expanding the tax base without increasing the tax burden. (page 9)
Infrastructure adds enormous value to land in prime locations according to proximity and serviceability. Land Value Capture (LVC) is a simple technique to recycle the publicly funded windfall gains that accrue to land owners. Importantly, these windfalls are captured over the life-cycle of the infrastructure, such that one generation is not hit with the total infrastructure costs (ie as per the current preference for Developer charges). (page 10)
Windfall gains from infrastructure add up to several times the cost of the infrastructure to surrounding properties. We propose that a sufficient contribution from this windfall be recycled back to the government so that other infrastructure projects can be funded without substantially burdening one generation over another. At present land speculators baulk at paying barely 10% of the land bounty (windfall gain) back to the community via government’s Land Tax, Council Rates, Stamp Duties and Capital Gains. (Page 11)
“Henry George did more than draw ‘the deadly parallel of riches and misery.’ He recast the science of political economy by working out the natural laws of the distribution of wealth. He destroyed the current academic theory of wages and capital. He amplified and extended Ricardo's law of rent. He dug to the root of the wealth distribution.” (John Dewey, quoted on page 22)
If you could choose the sort of society that you were to be born into, would you choose one in which the distribution of wealth is guaranteed to be equal? (page 28 -- and don't miss the illustration cartoon on "trickle-down economics"!!)
The world faces a series of worsening crises, climate instability, rising energy costs, economic apartheid, and erosion of democratic institutions. What is required is not a set of technical instruments that try to resolve these, one at a time. We need a new social philosophy that addresses all these crises simultaneously. (page 38)
All 17th century authors took it for granted that God had given the earth to all people in common, not just to those who had claimed title to a part of it. Starting with that premise, the difficulty lay in justifying private ownership of nature. They saw that private property in land or ocean or other gifts of nature was an obvious usurpation of the rights of the rest of humanity. Private ownership was deemed a necessary evil to achieve more productive use of nature, but it was clearly an evil, never an institution that was good in itself. (page 39)
The idea of charging a fee for the use of nature and sharing the revenue equally might seem like a proposal that would not be threatening to powerful interests, but it is. The wealthy at present take a disproportionate share of the common stock of resources, both renewable and non-renewable, and they aim to keep it that way. (page 40)
“Ironically, what comes closest to being sacred in modern societies are individual rights, private property, and personal freedom.” (page 41)
“It seems that most people are concerned only with the future of their own children, not with the next generation as a whole.” (page 43)
A lot of good material -- and I've barely mentioned the graphics!