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!
Land Value Tax
Land value taxes of one form or another already exist in this country as well. Pennsylvania seems especially fond of them. Most recently, the city of Altoona, Pa., switched over to a pure land value tax, replacing the more conventional property tax it used to levy. The proposal to levy a land value tax should be the most non-controversial on the list. Municipalities already tax land value to some degree because property taxes are levied against land value as well as the buildings that sit on top of the land. Obviously it is not absurdly impossible to change from assessing taxes on land plus buildings to assessing taxes on just land.
Implementing this tax has some normative appeal insofar as nobody makes land and so taxing its value does not run afoul of any notion that people should not be deprived of the product of their labor. But more than that, most arguments for the land tax center around its ability to encourage economic production and growth. Taxing land allows you to reduce taxes on things like the construction of buildings (subjected to property taxes), work (subjected to income taxes) and investment (subjected to capital gains taxes). If conservatives believe their own arguments about how devastating to growth such taxes are, switching to a land value tax should be a huge priority for them.
As with the UBI, this proposal has also scored substantial support from those on the right side of the political perspective. The person credited with coming up with and popularizing it, Henry George, was a libertarian.
Is a land value tax the solution to our housing affordability problem?
By Catherine Cashmore | Monday, 25 November 2013
There’s been a lot of debate around property taxation in Australia - significantly negative gearing, which allows an investor to use the short fall between interest repayments and other relevant expenditure, to lower their income tax.
The policy promotes speculative gain meaning the strategy is only profitable if the acquisition rise in value rather than holding or falling - therefore, in Australia, investor preference is slanted toward the established sector – the sector that attracts robust demand from all demographics and as such, in premium locations, has historically gained the greatest windfall from capital gains.
Aside from the impact this creates in terms of affordability (pushing up the price of second-hand stock, burdening new buyers with the need to raise a higher and higher deposit just to enter ownership), it also negatively affects the the new home market, which traditionally struggles to attract consistent activity outside of targeted first home buyer incentive; albeit, the headwinds resulting from planning constraints and supply side policy should also not be dismissed.
Additionally, capital gains tax and stamp duty have also received much debate. Both are transaction taxes, and therefore have a tendency to stagnate activity, acting as a deterrent to either buying and selling.
Stamp duty, as modelled by economist Andrew Leigh, is shown to produce a meaningful impact on housing turnover, leading to a potential mismatch between property size and household type – a deterrent to downsizing and therefore selling.
Additionally, it burdens first time buyers by increasing the amount they need to save in order to enter the market and frequent changes of employment concurrent with a modern day lifestyle, are hampered as owners, unwilling to move any meaningful distance outside their local neighbourhood, search for work in local areas alone.
But, outside of academia and intermittent articles, there is scant debate in Australian mainstream media regarding land value tax and it’s practical impact.
The theory is taken to its extreme and best advocated by American political economist and author, Henry George, who wrote his publication Progress and Poverty - an enlightened and impassioned read - and subsequently inspired the economic philosophy that came to be known as ‘Georgism.’
The ideals of Henry George reside in the concept that land is in fixed supply, therefore we can’t all benefit from economic advantage gained from ‘ownership’ of the ‘best’ sites available without effective taxation of the resource.
George advocated a single tax on the unimproved value of land to replace all other taxes – something that would be unlikely to hold water in current political circles. However, his ideals won favour amongst many, including the great economist and author of Capitalism and Freedom, Milton Friedman, and other influential capitalists such as Winston Churchill, who gave a powerful speech on land monopoly stressing:
“Unearned increments in land are not the only form of unearned or undeserved profit, but they are the principal form of unearned increment, and they are derived from processes which are not merely not beneficial, but positively detrimental to the general public.”
In essence, raising the percentage of tax that falls on the unimproved value of land has few distortionary or adverse affects. It creates a steady source of revenue whilst the landowner can make their own assessment regarding the timing and type of property they wish to construct in order to make profit without being penalised for doing so.
However, when the larger percentage of tax payable is assessed against the value of buildings and their improvements – through renovation, extension or higher density development for example – not only can those costs be transferred to a tenant, there is less motivation to make effective use of the site. This has a flow on effect which can not only exacerbate urban ‘sprawl’, but also increase the propensity to ‘land bank.’
The Henry tax review commissioned by the government under Kevin Rudd in 2008 concluded that “economic growth would be higher if governments raised more revenue from land and less revenue from other tax bases,” proposing that stamp duty (which is an inconsistent and unequitable source of revenue) be replaced by a broad based land tax, levied on a per square metre and per land holding basis, rather than retaining present land tax arrangements.
And whilst it’s difficult to qualify how purchasers may factor an abolition of stamp duty into their price analysis, perhaps adding the additional saving into their borrowing capacity, and therefore not lowering prices enough to initially assist first homebuyers. It does demonstrate how over the longer-term falls in house prices have the potential to exceed the value of land tax payments, assisting both owner-occupier and rental tenant as the effects flow through.
Additionally, increasing the tax base would provide developers with an incentive to speed up the process and utilise their holding for more effective purposes.
And importantly for Australia, it can provide a reliable provision of revenue to channel into the development of much-needed infrastructure.
The rational for this is coined in the old real estate term ‘location, location, location.’ Everyone understands that in areas where amenities are plentiful – containing good schools, roads, public transport, bustling shopping strips, parks, theatres, bars, street cafes and so forth – increases demand and therefore land values, invoking a vibrant sense of community which attracts business and benefits the economy.
The idea behind spruiking a ‘hotspot’, such a common industry obsession, is based on purchasing in an area of limited supply, on the cusp of an infrastructure boom such as the provision of a new road or train line for example, enabling existing landowners to reap a windfall from capital gains and rental demand for little more effort than the advantage of getting in early and holding tight whilst tax payer dollars across the spectrum fund the work.
Should a higher LVT be implemented, the cost and maintenance of community facilities could in part, be captured from the wealth effect advantaging current owners, compensating over time for the initial outlay. Imagine the advantage this would offer residents in fringe locations who sit and wait for the failed ‘promises’ offered, when they migrated to the outer suburbs initially.
Take New York for example – between the years 1921 and 1931 under Governor Al Smith, New York financed what is arguably the world’s best mass transit system, colleges, parks, libraries, schools and social services shifting taxes off buildings and onto land values and channelling those dollars effectively.
The policy influenced by Henry George ended soon after Al Smith’s administration, and eventually lead to todays landscape - a city built on a series of islands, with limited room to ‘build out’ facing a chronic affordable housing shortage with the population projected to reach 9.1 million by 2030.
More than a third of New Yorkers spend half their pay cheque on rent alone yet like London, there is little motivation for developers to build housing to accommodate low-wage workers concentrating instead on the luxury end of market, broadening the gap between rich and poor as land values rise and those priced out, find little option but to re-locate.
New York’s Central Park is the highest generator of real estate wealth. The most expensive homes in the world surround the park with apartments selling in excess of $20 million, and newer developments marketed in excess of $100+ million.
Like London it’s a pure speculators paradise – in the 10 year period to 2007, values increased by 73% - owners sit on a pot of growing gold and there’s little to indicate America’s richest are about to bail out of their New York ‘addiction’ with an expansive list of A-list celebrities, high net worth individuals, and foreign magnates, owning apartments in the locality.
New mayor-elect, Bill de Blasio, who won his seat, based on a promise to narrow the widening inequality gap - preserve 200,000 low and middle income units, and ensure 50,000 affordable homes are constructed over the next decade, will struggle to subsidize plans whist facing a deficit reputed to be as much as $2 billion in the next fiscal year.
Yet economist Michael Hudson has recently assessed land values in New York City alone to exceed that of all of the plant and equipment in the entire country, combined.
Currently more than 30 countries around the world have implemented land value taxation - including Australia - with varying degrees of success not only based on the percentage split between land and property, but how those funds are channelled back into the community and the quality of land assessments in regularly updating and estimating value.
Pennsylvania is one such state in the USA to use a system which taxes land at a greater rate than improvements on property – I think I’m correct in saying 19 cities in Pennsylvania use land value tax with Altoona being the first municipality in the country to rely on land value tax alone.
Reportedly, 85% of home owners pay less with the policy than they do with the traditional flat-rate approach. When mayor of Washington county, Anthony Spossey, who also served as treasurer from 2002 to 2006 and under his watch enacted an LVT, was interviewed on the changes in 2007, he commented:
“LVT ..helps reduce taxes for our most vulnerable citizens. We have an aging demographic, like the county, region and the state. Taxpayers everywhere are less able to keep up with taxes, and that hurts revenue. LVT helps us mitigate the impact both to them and the city. It’s a win/win.”
Until fairly recent times, another good example to cite is Pittsburgh. Early in the 1900s the state changed its tax system to fall greater on the unimproved value of land than its construction and improvements.
Pittsburgh’s economic history is a study in itself, and has not been without challenges. For those wanting to research further, I strongly advocate some of the writings of Dan Sullivan - (former chair of the Libertarian Party of Allegheny County, (Pittsburgh) Pennsylvania) - who is an expert on the economic benefits of LVT and has written extensively on the subject.
Sullivan demonstrates that Pittsburgh not only enjoyed a construction boom whilst avoiding a real estate boom under a broad based LVT system, but also effectively weathered the great depression whilst maintaining affordable and steady land values along the way.
In comparing it to other states struggling to recover from the recent sub-prime crisis he points out:
“In 2008, just after the housing bubble broke, Cleveland led the nation in mortgage foreclosures per capita while Pittsburgh's foreclosure rate remained exceptionally low. Since then, the foreclosure rates in Las Vegas and many Californian cities, none of which collect significant real estate taxes, have passed Cleveland's foreclosure rate. However, on September 15, 2010, The Pittsburgh Post-Gazette reported that while at the end of the second quarter of 2010, 21.5% of America's single-family homes had underwater mortgages (the American term for negative equity), only 5.6% did in Pittsburgh. As a result Pittsburgh was top of a list of the 10 marketswith the lowest underwater mortgage figures.”
When land value tax is implemented - with the burden taken of buildings and their improvements, ensuring good quality assessments and sensible zoning laws – it not only assists affordability keeping land values stable, but also benefits local business through infrastructure funding, discourages urban sprawl, incites smart effective development of sites, reduces land banking, and as examples in the USA have demonstrated – assists in weathering the unwanted impacts of real estate booms and busts.
Despite the numerous examples across the world where a broad based land value tax has been deployed successfully, changing policy and bringing about reform is never easy and rarely without complication.
Additionally, the implications of a yearly tax on fixed low-income retirees must be handled with care and understanding, as there are ways to buffer unwanted effects whilst changes are implemented.
Therefore, the process adopted in the ACT which is abolishing stamp duties over a slow transitional 20 year period to phase in higher taxation of land is not altogether unwise.
With any change to the tax system, the headwinds come convincing the public that it’s a good idea. In this respect balanced debate and conversation is necessary, as questions and concerns are brought to the fore.
The increased tax burden also falls on those who have significant influence across the political spectrum; therefore strong leadership to avoid lobbying from wealthy owners with vested interests is essential.
Albeit, as I said last week, we have a new and growing generation of enlightened voters who are well and truly fed up with battling high real estate prices, inflated rents, and care not whether it’s labelled as a ‘bubble’ – but certainly care about their future and that of their children.
Therefore – I do see a time when all the chatter around affordability, will finally evolve into real action – and a broad based LVT should form an important part of that debate.
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition.
At present, neither party advocates the tax code so elegant it can reduce inequality, mitigate poverty, stimulate productivity, prevent asset price bubbles, stem community-shredding gentrification and drain the distended Wall Street cabal of its ill-gotten gains – in just one tax.
Land value. If we want a real overhaul/simplification of the tax code, the way to do it is to tax land value. It might be the only tax we need. No sales tax. No income tax. No payroll tax to fill a Social Security trust fund. No corporate income tax that, as we can plainly see, offshores profits. No need to tax labor and industry at all. Just tax the stuff that humans had nothing to do with creating, and therefore have no basis to claim ownership over at all. You’ll find that almost all of it is “owned” by the fabled 1 percent.
How the Single Tax movement boosted equity & prosperity during the Progressive Era
By Mason Gaffney & Rich Nymoen
With Connecticut following Pennsylvania’s century-long lead by enacting legislation this year that applies the work of the Gilded Age economist and reformer Henry George, it is timely to look back at similar efforts in the U.S. of his Progressive Era followers, known then as Single Taxers. Author of the world-wide 1879 best-seller Progress and Poverty, Henry George — following in the line of the classical economists Francois Quesnay, Adam Smith, David Ricardo and John Stuart Mill — argued that land and natural resources should be rented out by the community to those holding title to them and the resulting revenue used in place of taxes on wages and production. Single Taxers took their name from Henry George’s proposal that all taxes on productive activity should be replaced with a “single tax” on the value of land and natural resources, and they often simultaneously worked for public ownership of natural monopolies to keep their prices at or below costs.
The basic principles of the Single Tax program were illustrated in “The Landlord’s Game” a Progressive Era precursor to the board game “Monopoly,” which was developed by a Single Taxer named Elizabeth Phillips (nee Magie). Under this game’s alternative Single Tax rules, individual players were paid rent for any buildings they had on their properties but all land rent for the properties was paid into the kitty and divided among all the players instead of concentrating in the hands of a single winner. Also, once cash in the game’s Public Treasury from land rents reached a sufficient amount, it was paid to the holder of the railroads, trollies and utilities for the purchase (through condemnation) of their operations, which were then publicly owned and operated so they could provide their services free of charge.
New York City Compared to their peers, cities following the Single Tax program in the Progressive Era grew in notable spurts, most impressively in New York City as the era ended. NYC’s growth had been slowing down just before the “Al Smith Act” of 1920 let NY City, County, and Schools exempt new housing construction (but not land values) from the property tax from 1921 until the end of 1931. The law applied to all the five “boroughs,” in New York County, and also to its coterminous school district taxes. The Act authorized ALL units of local government to exempt building values below a modest cap. This thoroughgoing “root and branch” attitude in New York reveals the existence of a strong, long-standing political movement. The New York Act sprang from a political history that links it to the movement Henry George left behind in New York, as well as to other Single Tax strongholds like Cleveland, Detroit, Toledo, Jersey City, Milwaukee, Pittsburgh, and Chicago. Gov. Al Smith took the visible lead, but he, like most political leaders, had to be pushed.
Who was it that pushed? A major force was the group of single-tax clubs of NYC, the enduring legacy of Henry George’s runs for Mayor of NYC in 1886 and 1897. After George’s death, his influence survived him in his adopted home.
Before Smith was governor, Albany had blocked several single-tax bills in the years 1909-16. Earlier, as majority leader of the Assembly and a Tammany wheelhorse, Smith himself had blocked a 1911 Single Tax effort (the Sullivan-Shortt Bill) along similar lines. Smith turned around after 1911, his change triggered by the awful incineration of 150 people trapped in the Triangle Shirtwaist Company workroom—a traumatic, watershed event of the times. When first elected governor in 1918, Smith was a changed man with a new power base. We may surmise, also, that his success in reviving NYC helped boost him to the Democratic nomination for U.S. President in 1928, and that was on his mind.
NYC, in granting this tax holiday for new housing, was not “racing to the bottom” in terms of public spending. NYC financed one of the world’s best mass transit systems, and the nation’s best city college system (the “poor man’s Harvard”) with an impressive roster of graduates in the professions. Its parks and libraries were outstanding; its schools and social services above the national norm. NYC was not lowering taxes, but shifting them off buildings and onto land values. Exempting buildings had the effect of raising land values, thus preserving and even augmenting the overall tax base.
After 1932, the forces of tax limitation rallied, financed by the likes of the Rockefeller Brothers, the Seth Low family, A.A. Berle, and others. And so New York City’s remarkable growth spurt tapered off, leaving it larger, but otherwise much like many other older cities.
Cleveland In Cleveland, the city’s population grew by 109% from 1900 to 1920. For most of this time it was under the administrations of single-taxers Tom L. Johnson, 1901-09, and Newton D. Baker, 1911-16. In 1906, Mayor Johnson inaugurated a low 3-cent trolley fare which entailed possible deficits he intended to meet by taxing real estate. To this day a bronze statue of Johnson stands in downtown Cleveland, holding a book out for all to see, and on it engraved so clear, Progress and Poverty.
Johnson’s City Solicitor and ally, Newton D. Baker, was another remarkable leader, who later nearly edged out FDR for the Democratic Presidential nomination in 1932. Baker won the mayoralty in 1911, after an interregnum of just two years. Baker implemented single tax policies until President Wilson appointed him Secretary of War in 1916. This high-level appointment recognized the political power of the single-tax movement in that era, a power that later historians and economists have wrongly trivialized. After 1916, though, Cleveland slowly fell into old-line Tory hands.
Detroit The soaring growth experienced by Detroit from 1890 to 1930 obviously involved the auto industry, but why did that industry focus on Detroit? There was no St. Lawrence Seaway—that opened in 1959. Growth began under Mayor, then Governor Hazen S. Pingree. Pingree had called Tom Johnson to Detroit in 1899 to help beef up its street car system and lower fares, under public ownership. It is one of the great ironies: The Motor City, whose auto firms did so much to destroy mass transit, originally attracted them by providing cheap mass transit for their workers. The sensational collapse of Detroit came after 1950 when Detroit’s leaders, auto-oriented, forgot the Pingree policies that had launched Detroit earlier.
Milwaukee Milwaukee grew fast for 30 years under its Socialist Party Mayors Emil Seidel (1910-12) and Daniel Hoan (1916-40). Hoan’s tenure was the longest of any Mayor of a large American city; he was nationally recognized as the best mayor in the country, and Milwaukee under Hoan was the best-governed city. Hoan’s brand of what others labeled “sewer socialism” consisted in keeping transit and utility user-rates low, and meeting deficits by raising property taxes. The formula for growing and revitalizing cities seems to be the same, whether under a “socialist” like Hoan or a colorful populist like Johnson: supply infrastructure, keep user-rates low, raise land taxes, attend to the details of assessment, and go easy on taxing buildings.
Chicago From 1890-1900, Chicago grew by 54%, but it did not just spread, it pioneered the skyscraper, and centralized its transit system as few other cities ever did. From 1900-30 it continued to grow at higher percentage rates than most other cities, and much higher absolute rates, confirming its status as America’s second largest city. Who was Chicago’s Tom Johnson? It was not one person, but a large and shifting group. Chicago lawyer John Peter Altgeld, humanitarian and reformer, was Governor of Illinois, 1892-96. His administration contained several single-taxers, including young Brand Whitlock, future Mayor of Toledo, whom Altgeld inspired. Altgeld directly corresponded and worked with Henry George, and, according to Whitlock, “understood” George’s ideas like few others.
Today’s infuential “Chicago School” of economists at the University of Chicago take it on faith that unions obstruct economic growth, but one could not illustrate it from the City of Chicago, a major center of union activity during its period of fastest growth. These unions supported Altgeld, and Single Tax ideas.
Chicago’s low transit fares and utility rates were an integral part of single-tax ideology in those days. At the same time Chicago, like San Francisco and New York, pioneered city parks and public spaces on a grand scale, laid out in the Daniel Burnham Plan, developed while the Single Taxer Edward F. Dunne was Mayor.
San Francisco Born-again San Francisco, 1907-30, makes an edifying case study in regenerative tax policy. Historians have focused on the earthquake and fire of 1906, but blanked out the recovery. We do know, though, that in 1907 San Francisco elected a reform Mayor, Edward Robeson Taylor, with a uniquely relevant background: he had helped Henry George write Progress and Poverty in 1879. It was a jolt to replace the lost part of the tax base by taxing land value more, but small enough to be doable. This firm tax base also sustained S.F.’s credit to finance the great burst of civic works that was to follow. Taylor retired in 1909, but soon laid his hands on James Rolph, who remained Mayor for 19 years, 1911-30, a period of civic unity and public works. “Sunny Jim” Rolph expanded city enterprise into water supply, planning, municipally-owned mass transit, the Panama-Pacific International Exposition, and the matchless Civic Center.
Population growth is not always a goal of civic policy. But it is vital to the interests of labor to have cities vie to attract people by fostering good use of their land. That is, indeed, the main point of Henry Geroge’s thesis in Progress and Poverty. A healthy economy generates surpluses that belie the Chicago School slogan that “There is no free lunch.” Land rents are the free lunch, and perhaps Connecticut’s move this year indicates that this time-proven wisdom is beginning to spread once again.
- See more at: http://onthecommons.org/magazine/forgotten-idea-shaped-great-us-cities#sthash.WKn4gQm7.dpuf
"If you wish to test the merits in point of certainty of land value taxation as compared with other taxes, go to a real estate agent in your community and, showing him a building lot upon the map, ask him its value. If he inquires about the improvements, instruct him to ignore them. He will be able at once to tell you what the lot is worth. And if you go to twenty other agents their estimates will not materially vary from his. Yet none of the agents will have left his office. Each will have inferred the value from the size and location of the lot.
But suppose when you show the map to the first agent you ask him the value of the land and its improvements. He will tell you that he cannot give an estimate until he examines the improvements. And if it is the highly improved property of a rich man he will engage building experts to assist him. Should you ask him to include the value of the contents of the buildings he would need a corps of selected experts, including artists and liverymen, dealers in furniture and bric-a-brac, librarians and jewelers.
Should you propose that he also include the value of the occupant's income, the agent would throw up his hands in despair. If without the aid of an army of experts the agent should make an estimate of these miscellaneous values, and twenty others should do the same, their several estimates would be as wide apart as ignorant guesses usually are. And the richer the owner of the property the lower as a proportion would the guesses probably be.
Now turn the real estate agent into an assessor, and is it not plain that he could appraise land values with much greater certainty and cheapness than he could appraise the values of all kinds of property? With a plot map before him he might fairly make almost all the appraisements without leaving his desk at the town hall.
And there would be no material difference if the property in question were a farm instead of a building lot. A competent farmer or business man in a farming community can, without leaving his own dooryard, appraise the value of the land of any farm there; whereas it would be impossible for him to value the improvements, stock, produce, etc., without at least inspecting them."
-- "The Taxation of Land Values," (pp. 107, 108) Bobbs-Merrill, Indianapolis.
In 1871, a Tennessee businessman, Enoch Ensley, wrote to his governor in much the same vein:
In showing or proving what I have above promised to show, I will
THE GOLDEN RULE OF
First, I will present you with a rule or motto
which I think it would be well for the state to adopt and have cut into
the stone at the capitol (in large letters and have them gilded), in
the senate chamber, the hall of the house of representatives and in the
governor's office, for I think it entirely harmonizes with the correct
principles of taxation in every particular, to wit:
That Would Be of Value to Your State,
That Could and Would Run Away, or
That Could and Would Come to You.
In 1978, Milton Friedman stated, "the least bad tax is the
property tax on the unimproved value of land, the Henry George argument
of many, many years ago" ("An Interview with Milton Friedman,” Human
Events 38 , November 18, 1978, p. 14.)
In 2004, interviewed by Joe Matthews about California's Proposition 13,
When the subject turned to Prop 13, which he
had strongly supported in 1978, Friedman said he thought the measure
had proven to be "a mixed bag." He did not regret his vote for Prop 13
because it had sent a tax-cutting message that was important for that
* * *
But as a matter of current policy, he said, Prop 13 was problematic.
"It's a bad tax measure because the property tax is the least bad tax
there is," he said. "Think of the original and indestructible
properties of the soil. The least dangerous and harmful tax is a tax on
something of which there is an inelastic supply." He argued that
protecting Prop 13 was far less important than cutting other taxes,
particularly on the income and sales we need more of.
Friedman in an interview published in the San Jose Mercury a few weeks before his death in 2006:
"Yes, there are taxes I like. For example, the gasoline tax, which pays for highways. You have a user tax. The property tax is one of the least bad taxes, because it's levied on something that cannot be produced — that part that is levied on the land. So some taxes are worse than others, but all taxes are bad." — interview, San Jose Mercury News, Nov 5, 2006
So Friedman could see at least two very good reasons for relying on taxes on land value. One wonders why he never devoted himself to promoting LVT.
George Monbiot has an excellent article on tax in the Guardian this morning. At its core is an argument for land value taxation, which he explains has long had powerful support. As he puts it:
In 1909 a dangerous subversive explained the issue thus. “Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains -– and all the while the landlord sits still. Every one of those improvements is effected by the labour and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived … the unearned increment on the land is reaped by the land monopolist in exact proportion, not to the service, but to the disservice done.”
Who was this firebrand? Winston Churchill. As Churchill, Adam Smith and many others have pointed out, those who own the land skim wealth from everyone else, without exertion or enterprise. They “levy a toll upon all other forms of wealth and every form of industry”. A land value tax would recoup this toll.
[W]hat’s wrong with the argument the Terry Leahys and the Bob Diamonds make for their extreme wealth? Look, the line runs, we work bloody hard for it; we’re worth it. And it’s true: unlike previous generations of the ultra-wealthy, many of the modern super-rich work for a living, in running major businesses or in finance (although the Davos guestlist still includes plenty of sheikhs and royals). But that doesn’t mean they truly earn the millions they claim.
Take a look at who’s in the Davos set. Last spring, two American academics, Jon Bakija and Brad Helm, and a US Treasury official, Adam Cole, published the most comprehensive analysis yet of the richest 0.1% earners, based on tax returns. Of these top dogs, nearly two in three were top corporate executives and bankers. And the story in both those professions has not been of brilliant returns to shareholders or vast improvements for society, but of wealth extraction and lobbying politicians, Davos-style. In particular, the tale of modern high-finance is of generating transactions, whether in corporate mergers or sub-prime mortgages and then skimming off some of the cash.
That’s extracting rent in exactly the same way that the property owner does. Economically the logic is the same. This is all unearned income, and we should not be granting it favours which increase the divisions and stresses in society; we should be taxing it.
That means we need land value taxation for sure, but we need progressive income taxation, capital gains tax at the same rate as income tax and enforceable corporation tax too if these rents are to be collected. And then there’s the need for reform of inheritance tax.
I really must get round to writing the Joy of Tax. It is next on my list.
"This is where the debate about workers and shirkers, strivers and skivers should have led. The skivers and shirkers sucking the money out of your pockets are not the recipients of social security demonised by the Daily Mail and the Conservative party, the overwhelming majority of whom are honest claimants. We are being parasitised from above, not below, and the tax system should reflect this."
Although this is a UK-focused story, it has international relevance. As we've noted several times before, Land Value Tax is an essential element of any good tax mix. It's progressive, it doesn't damage productivity, and it curbs the abusive practice of economic rent extraction. The article has a particular opinion:
"It's not really a tax. It's a return to the public of the benefits we have donated to the landlords. When land rises in value, the government and the people deliver a great unearned gift to those who happen to own it."
Here are the opening paragraphs of a recent article about the complexities of Ground Lease contracts. I commend the entire article to your attention. It helps flesh out why and how the entire FIRE sector -- Finance, Insurance and Real Estate (as well as their attorneys) -- is receiving such a large share of the profits produced by the productive sectors of the economy. The owner of land, and the entities which lend on land, and insure the buildings and the revenue flow, all reap significant shares of what the tenants labor to create. Modern sharecropping. And the recipients of the ground rent get to parade as self-made men, people of awesome foresight and wisdom -- and even philanthropists (think Brooke Astor, the Fishers, and others in your own community) when they donate a small share back to a charity! As you read this, think both of Manhattan land and of land in your community's central business district, and along its major roads. (Location, location, location!)
If one wonders why (true) small business struggles, one might consider the complexity and expense of their ground leases, and contrast that with the Georgist alternative: that one's taxes would be simply the current rental value of the land, while the value of the building remains one's private property, not subject to taxation or going pouf! at the end of a ground lease.
The land lord is "supplying" something he didn't create. We ought to ease him out. Land value taxation is the obvious tool for reducing, and -- slowly or not -- eliminating, his "take" on those who do create. Think what it would mean if working people had that spending power, instead of the lords of the land.
All that land rent could be used to fund our community's needs, instead of lining the pockets of a few very "lucky" -- privileged -- duckies. (The analogies to chattel slavery are not a long stretch, once one starts to think about it. We should all own ourselves, and reap the fruits of our own labors.)
A lease is a lease is a lease – or so you may think. Yes, real property leases grant an estate in land to a tenant for a period of time. And yes, the tenant pays for that right of possession. But the action in a lease isn’t in the conveyance provisions; it’s in the contract provisions. Multiply out the rent and other annual monetary obligations by the length of the lease term (in years), and you’ll see that it might be (and often is) a big dollar contract. Even more important, unlike the vast majority of contracts whose obligations are satisfied in days or weeks, a lease contract goes unfulfilled for 50, 75, “99,” and even 500 years. That takes it beyond the life of the parties involved in its creation, and the future brings surprises. Neither Nostradamus nor Jules Verne got everything right.
Why a Ground Lease?
If a tenant has to build its own building (as is often the case), and has all of the burdens of ownership, why would it lease a property knowing that at the end of the lease term it has nothing left to show for its money and efforts? There are a number of common reasons, principal among them is that the owner won’t sell the land and the tenant has no alternative.
Real property often carries a long term unrealized gain, waiting to be taxed upon its sale.
Not every landowner is interested in making further active real property investments. This makes a like kind exchange unappealing.
Ground leasing the same land keeps ownership in the family. At the owner’s death, because of the current estate tax “stepped up basis” arrangement, the built in gain may never be taxed.
THE DISTRIBUTION OF WEALTH BY THOMAS G. SHEARMAN. II.
An Irish landlord, writing to the London Times, called particular attention to the fact
that, in case all the landlords should be expelled, the whole of
Ireland, outside of the large towns, would be left without a single
person whose annual income would exceed $1,500. To the wealthy
landlord who owns the Times,
this appalling fact seems to afford such conclusive proof of the
desolation and misery which would follow home rule that he deems it
superfluous to add a word of comment. He considers it quite enough
to say that no such state of things exists in any civilised country.
That it should be eventually brought about in Ireland, he evidently
believes, must be considered by every sane man as one of the most
frightful disasters which could befall the human race.
I am writing in Germany, the country from which have proceeded the
most important additions to the intellectual wealth of the world
during the last fifty years. The man who knows nothing of the
contributions made to history, to theology, to science, whether
abstract or applied, by German students, knows practically nothing
at all. What have been the income of the men who have thus enriched
the world! Rarely so much as $1,500; generally not half that amount.
Some of the world-famous German scholars accomplished their great
achievements on an income of less than $600 a year.
New England developed a marvelous degree of intellectual activity in
the colonial period of our history, though confined within a narrow
circle. But that was a period of small incomes and very little
accumulated wealth; nor did the few wealthy men contribute anything
of importance to the intellectual or moral development of the
people. What have the wealthy Irish landlords done for the
development of the Irish people in religion, morality or intellect?
What contribution has any wealthy Irish landlord ever made to
literature, science, art or high thought of any kind? What benefit
have these men of wealth conferred upon any part of the world in any
direction? They have just held a solemn meeting to answer these
questions, and their own testimony affords the best evidence against
them. They claim to have advised their tenants to improve their
stock, to introduce better methods of cultivation and to qualify
themselves generally to pay higher rents, while they themselves have
set excellent examples to their inferiors by taking good care of
Many years ago a practical joker inserted an advertisement in a
daily paper to the following effect: "Wanted, by a young gentleman
of good birth and breeding, board in a respectable family, where his
Christian example would be considered sufficient compensation for
his board." The Irish landlords do not advertise, but they get
precisely that for which the young man advertised in vain. Their
Christian example, however, has been chiefly directed toward
hunting, horse racing and hard drinking. Certainly, down to a period
less than fifty years ago, all accounts of Ireland agreed in this;
and except that the drinking is conducted with more moderation,
there seems no reason to believe that there has been any change.
This, the third and final instalment, appeared in The Standard, October 22, 1887:
DISTRIBUTION OF WEALTH.
BY THOMAS G. SHEARMAN.
Having reached the conclusion that indirect, or as the writer first
called it five years ago, "crooked" taxation is certain to produce
enormous inequality of wealth, that it is palpably and indisputably
unjust, and that it inevitably leads to that worst form of
inequality which involves the perpetual ownership of more than half
of the wealth of a country by less than the one-hundredth part of
its inhabitants, we are prepared to take up the next and final
question in our series.
What can be done to effect a more equal distribution of wealth,
without diminishing its production?
Again let us waive the discussion of rent. Having purposely avoided
all consideration of that tender subject, we will not take it up
just now. Assuming that rent can rightfully be private property, and
that the community is not to claim it, simply as rent — conceding
all that the champions of private property in land claim — let us
inquire what, nevertheless, remains to be done and ought to be done,
in order to prevent the unjust use of government to the injury of
the poor, and to check the artificial tendency toward the monopoly
of wealth by a hundredth part of the population.
If, then, successive generations of men cannot have their fractional
share of the actual soil (including mines, etc.) how can the
division of the advantages of the natural earth be effected? By the
division of its annual value or rent; that is, by making the rent of
the soil the common property of the nation. That is (as the taxation
is the common property of the State), by taking the whole of the
taxes out of the rents of the soil, and thereby abolishing all other
kinds of taxation whatever. And thus all industry would be
absolutely emancipated from every burden.
— PATRICK EDWARD DOVE, Theory of
Human Progression (1850), Chap. III., Sec. 3.
It is not proposed to confiscate any value that has been created by human industry. This would be robbery. But when the community creates wealth it is entitled to it as much as the individual is to the wealth he creates.
-- from the first issue of The Standard, 1/8/1887.
... many Americans are facing the likelihood of not having sufficient income in retirement unless they increase their savings, work longer, or significantly decrease their expenditures in retirement if they hope to make ends meet.
The Employee Benefits Research Institute recently published an analysis of 2010 Survey of Consumer Finances data. It demonstrates how few people have the traditional defined-benefit retirement plans, and the account balances people of various demographics have in their individually-directed retirement accounts.
Here are some statistics worth considering as we think about the effects of a system which permits a few of us to capture a large share of the nation's net worth and a large share of its income, and to unduly influence our elections with advertising which works to conceal and reinforce the structures of that system:
38% of all families -- of all ages -- had a family member with a retirement plan. [Figure 2]
of those 38%, 18% had only a defined benefit plan; 61% had only a defined contribution plan; 21% had both. 82% had a 401(k) type plan, and of that 82%, 22% also had a defined benefit plan
Among those families whose head was 55-64, 43% had a member with a retirement plan; among those 45-54, 53% did.
Interestingly, the top 75% of the net worth spectrum all had rates in the 41% to 46% range; in the bottom 25%, only 21%.
Among families whose head was under 65 and working, 52% had a member participating in a retirement plan [Figure 3].
Among households with income abov e $100,000, 76% had retirement plans; in the $50,000 to $100,000 income range, 64%; in the lower income groups, the rate ranged from 44% down to 9%
In the 55-64 age group, 59% had a retirement plan; in the 45-54 group, 61%.
Within this working-age universe, similar trends held: the top 50% had roughly 61-67% availability of employment-related retirement plans; for the next 25%, only 53%; for the bottom 25% of working families, only 29%.
IRAs and Keogh plans: 28% had one or both; median value, $40,000 (up from $34,574 in 2007). Among those 55-64, 41% had one or both; median value $60,000 (down from $68,101); among those 45-54, 29% had one or both; median value $40,000, up from $37,717. [Figure 5]
Even among those in the top 10% of the net worth spectrum, only 77% had IRA or Keogh accounts, median value $200,,000, up from $142,487 in 2007; in the next 15% of the net worth spectrum, median value was $60,000.
Of all families, 64% had some sort of retirement account from a current or previous employer (down from 66% in 2007)
Retirement assets in Defined Contribution plans and IRAs typically [that is, at the median] represent 61% to 66% of total financial assets, which is to say that most have less in mutual funds, stocks, checking and other accounts than they do in their retirement accounts. [Figure 8]
Only in the top 10% do retirement assets represent less than half of financial assets.
As is typical of median/average ratios, average holdings are considerably higher -- that is, the holdings of the top few are huge, and most of us are below average. The average balance is $173,232; in the top 10% of the net worth spectrum, average balances are $519,034. For the next 15% of us, the average balance is 147,061 -- well below the average of all of us! [Figure 9] Recall from Figure 6 that 64% of us have such a plan; the other 36% have no balance at all (and likely a significant percentage have very small account balances).
For those in the 65-74 age group, the average balance is $324,199; for those in the 55-64 group, the average balance is $297,903.
For those in the top 10%, average account balance is $519,034. One might reasonably guess that the top 5% have the lion's share of this.
It might be worth noting that a 70 year old must withdraw at least 1/27 of his IRA per year. Based on that 65-74 age group average balance, that's $12,000 per year. (Another rule of thumb says that if one only withdraws 3% per year, one's account should last forever. That would be $9,725 per year, for that "average" -- not median -- family in the 65-74 age group.
Enough said. Time to circle back to the study's conclusion:
... many Americans are facing the likelihood of not having sufficient income in retirement unless they increase their savings, work longer, or significantly decrease their expenditures in retirement if they hope to make ends meet.
What public policy reforms might one suggest based on these data points?
Find a way to raise wages for ordinary workers
Find a way to lower the cost of living for ordinary workers and retirees
Find a way to reduce the sum of the taxes we pay and the costs of housing without reducing the public goods which those taxes provide (unless it is by reducing the demand for social safety net
If you have other suggestions, I'd like to hear them.
But the reason for this blog is that I believe I have found the public policy reform which would accomplish these goals, in collecting the lion's share of the annual rental value of our land, and in collecting for the commons certain other kinds of natural public revenue which our current system permits to accrue to individuals and corporations. I didn't invent it. Henry George is the clearest exponent of it, but not the first or last. Is it perfect? No, but it is vastly superior to what we've got now, and I believe it is consistent with the ideals to which Americans pay the most honor.
A snippet of a thought: When some of us contribute by paying taxes -- be it into the Social Security system or the federal income tax, or state income tax, or state sales tax -- and others by contributing to our favorite charities, are these equally beneficial to the common good? (We don't give federal income tax deductions for one's contributions to Social Security, which constitute the majority of taxes for most of us. Well, maybe we do, sort of: the standard deduction could be construed as a sort of deduction for SS taxes. I've not played with the numbers.)
When some of us contribute by spending 2 years evangelizing overseas for our chosen religion, and others contribute by spending some years of our lives in military service, at risk to their lives and future well-being, are these equally beneficial to the common good?
And a semi-related thought: it seems likely that the richer candidate's contributions to his chosen charities were in the form of (awesomely) appreciated securities for which his basis was quite low. I've not heard much mention of that. He might have paid income taxes on $1 of "value" when he received it, and gotten a tax deduction on $10 or $100 -- or more -- when he donated it a few years later.
I don't mean this as a partisan thing; I'm not enthralled with either of our current major parties or their candidates, and regard one only as the lesser of two evils. (I think I would find one candidate's Supreme Court appointees more palatable than those of the other, and regard that as the key issue in the federal election.) I'll be voting for various 3rd party candidates for many of the positions on my ballot.
We'd be better off if we tapped into natural public revenue sources -- the rental value of land, the rental value of "location, location, location!", taxes on finite natural resources, such things as the supposedly "public" airwaves, geosynchronous orbits, airport landing rights, water rights -- the value of which today flows into the private pockets of various privileged folks, enriching them without requiring a return of service to the rest of society for that value.
The accompanying map says, "Around Grand Central Terminal, towers could be up to twice the size now permitted. Development could also take place along the Park Avenue corridor, where towers could be more than 40% larger. Elsewhere in the district, towers could be 20% larger."
New York’s premier district, the 70-block area around Grand Central
Terminal, has lagged, Bloomberg officials say, hampered by zoning rules,
decades old, that have limited the height of buildings.
Mayor Michael R. Bloomberg wants
to overhaul these rules so that buildings in Midtown Manhattan can soar
as high as those elsewhere. New towers could eventually cast shadows
over landmarks across the area, including St. Patrick’s Cathedral and
the Waldorf-Astoria Hotel. They could rise above the 59-story MetLife
Building and even the 77-story Chrysler Building.
Mr. Bloomberg’s proposal reflects
his effort to put his stamp on the city well after his tenure ends in
December 2013. Moving swiftly, he wants the City Council to adopt the
new zoning, for what is being called Midtown East, by October 2013, with
the first permits for new buildings granted four years later.
administration says that without the changes, the neighborhood around
Grand Central will not retain its reputation as “the best business
address in the world” because 300 of its roughly 400 buildings are more
than 50 years old. These structures also lack the large column-free
spaces, tall ceilings and environmental features now sought by corporate
rezoning — from 39th Street to 57th Street on the East Side — would
make it easier to demolish aging buildings in order to make way for
state of-the-art towers.
it, “the top Class A tenants who have been attracted to the area in the
past would begin to look elsewhere for space,” the administration says
in its proposal.
plan has stirred criticism from some urban planners, community boards
and City Council members, who have contended that the mayor has acted
hastily. They said they were concerned about the impact of taller towers
in an already dense district where buildings, public spaces, streets,
sidewalks and subways have long remained unchanged.
Mr. Bloomberg has encouraged high-rise development in industrial neighborhoods, including the Far West Side of Manhattan,
the waterfront in Williamsburg, Brooklyn, and in Long Island City,
Queens. But with the proposal for Midtown, which is working its way
through environmental and public reviews, he is tackling the city’s
the development potential in this area will generate historic
opportunities for investment in New York City,” Deputy Mayor Robert K.
The initiative would, in some cases, allow developers to build towers twice the size now permitted in the Grand Central area. The
owner of the 19-story Roosevelt Hotel at Madison and 45th Street could
replace it with a 58-story tower under the proposed rules. Current
regulations permit no more than 30 floors.
When zoning changes increase the value of land, who should reap the benefit? The current landholder, or the community? What did the landholder do to earn that windfall? Do you think it comes out of thin air? Do you think it is paid him by other rich people?
Or do you recognize that it is part of the structure which enriches a few and impoverishes the many?
It is easy to fix this one. One just has to recognize the structure, and value the land correctly, and start collecting the lion's share of the land rent for the community. If it is more than NYC can put to use -- and it will be -- then apply the excess to reducing our federal taxes on productive effort. Use it to fund Social Security, or Medicare, or universal health insurance, or something else that will benefit the vast majority of us instead of an undeserving tiny privileged minority. Don't throw it in the ocean, and don't leave it in private pockets, be they American or not.
Collect the land rent. Repeat next year, and the next, and the next. Natural Public Revenue.
Henry George is the most famous American popular economist you've never heard of, a 19th century cross between Michael Lewis, Howard Dean and Ron Paul. Progress and Poverty, George's most important book, sold three million copies and was translated into German, French, Dutch, Swedish, Danish, Spanish, Russian, Hungarian, Hebrew and Mandarin. During his lifetime, George was probably the third best-known American, eclipsed only by Thomas Edison and Mark Twain. He was admired by the foreign luminaries of the age, too -- Leo Tolstoy, Sun-Yat Sen and Albert Einstein, who wrote that "men like Henry George are unfortunately rare. One cannot image a more beautiful combination of intellectual keenness, artistic form and fervent love of justice." George Bernard Shaw described his own thinking about the political economy as a continuation of the ideas of George, whom he had once heard deliver a speech.
Later, she writes,
George found most mysterious about the economic consequences of the
industrial revolution was that its failure to deliver economic
prosperity was not uniform -- instead it had created a winner-take-all
society: "Some get an infinitely better and easier living, but others
find it hard to get a living at all. The 'tramp' comes with the
locomotives, and almshouses and prisons are as surely the marks of
'material progress' as are costly dwellings, rich warehouses and
magnificent churches. Upon streets lighted with gas and patrolled by
uniformed policeman, beggars wait for the passer-by, and in the shadow
of college, and library, and museum, are gathering the more hideous Huns
and fiercer Vandals of whom Macaulay prophesied."
diagnosis was beguilingly simple -- the fruits of innovation weren't
widely shared because they were going to the landlords. This was a very
American indictment of industrial capitalism: at a time when Marx was
responding to Europe's version of progress and poverty with a wholesale
denunciation of private property, George was an enthusiastic supporter
of industry, free trade and a limited role for government. His culprits
were the rentier rich, the landowners who profited hugely from
industrialization and urbanization, but did not contribute to it.
had such tremendous popular appeal because he addressed the obvious
inequity of 19th century American capitalism without disavowing
capitalism itself. George wasn't trying to build a communist utopia. His
campaign promise was to rescue America from the clutches of the robber
barons and to return it to "the democracy of Thomas Jefferson." That
ideal -- as much Tea Party as Occupy Wall Street -- won support not only
among working class voters and their leaders, like Samuel Gompers, but
also resonated with many small businessmen. Robert Ingersoll, a
Republican orator, attorney and intellectual, was a George supporter. He
urged his fellow Republicans to back his man and thereby "show that
their sympathies are not given to bankers, corporations and
I commend the entire post, adapted from Freeland's new book, Plutocrats. It ends with these paragraphs:
today urgently needs a 21st century Henry George -- a thinker who
embraces the wealth-creating power of capitalism, but squarely faces the
inequity of its current manifestation. That kind of thinking is missing
on the right, which is still relying on Reagan-era trickle-down
economics and hopes complaints about income inequality can be silenced
with accusations of class war. But the left isn't doing much better
either, preferring nostalgia for the high-wage, medium-skill
manufacturing jobs of the post-war era and China-bashing to a serious
and original effort to figure out how to make 21st century capitalism
work for the middle class.
and the technology revolution aren't going away -- and thank goodness
for that. Industrialization didn't go away either. But between 1886,
when George lost the mayoral race, and the presidency of FDR, American
progressives invented, fought for and implemented a broad range of new
social and political institutions to make capitalism serve the whole of
society -- ranging from trust-busting, to the income tax, to the welfare
are living in an era of comparably tumultuous economic change. The
great challenge of our time is to devise the new social and political
institutions we need to make the new economy work for everyone. So far,
that is a historic task neither party is taking on with enough energy,
honesty or originality."
Along the same lines, you might find interesting an earlier post here, an article by Thomas Shearman entitled "Henry George's Mistakes." (He was a co-founder of Shearman & Sterling, and went on to write some excellent articles on plutocracy in The Standard, October, 1887.)
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.
Let it be observed that when land is taxed, no man is taxed; for the land produces, according to the law of the Creator, more than the value of the labor expended on it, and on this account men are willing to pay a rent for land.
— PATRICK EDWARD DOVE, Theory of Human Progression (1850), Chap. I., Sec. 2, p. 44
It is not proposed to confiscate any value that has been created by human industry. This would be robbery. But when the community creates wealth it is entitled to it as much as the individual is to the wealth he creates.
Has no one in California figured out that when the calf is deprived of mother's milk, starvation is inevitable?
It has taken 34 years, but it is coming about.
Feeding calves grain, or seaweed, or sunflower seeds isn't as smart as letting it consume its natural food.
Taxing wages, sales and buildings isn't as smart as collecting the lion's share -- calf's share, if you will -- of the land rent for public purposes.
Proposition 13 was designed to make sure that the cows' milk was kept for the Irvines, the big landowners, the commercial property owners, and the longtime homeowners, while providing a diminishing fifth of it to the calf and supplementing with grain, seaweed and sunflower seeds.
The calf's digestive system has blown up because it was deprived of its proper food, and "nourished" with stolen fake food.
This quote is attributed to the Irish landlords, in an 1835 piece by Thomas Ainge Devyr entitled "Natural Rights: A Pamphlet for the People."
The statement bears thinking about: when private landlords collect high rents, they force their tenants to work quite hard -- keep in mind that they still have to pay taxes on various things in order to support local spending -- while the landlord has provided them NOTHING that he has made (and nothing he has bought from the fellow who made it, either).
But at the same time, it is worth considering what happens when the community collects reasonably high rents on the land, particularly urban land. When the community collects high rent, there are no vacant lots. There are relatively few underused lots. There is housing for all who want it. All this economic activity creates jobs -- for those who would design, those who would build, those who would maintain, those who would improve, those who would expand, those who would protect. All those workers' needs and spending create more jobs. Wages rise, as jobs chase workers.
So the phrase is not simply an 18th century rural one, but highly relevant in 21st century U.S. cities, towns and rural areas. When the community collects the land rent and recycles it to serve local needs -- schools, parks, well-maintained roads, public transportation systems, police, ambulance, fire protection, courts -- communities become good places to live. When we permit private landlords (be they individual or corporate, universities or trusts) to pocket those funds -- and perhaps "invest" the excess in acquiring more land on which to pocket the rent, those good things, if they happen at all, must be financed by high taxes on productive activity.
One is a virtuous circle; the other a vicious one. Which one is consistent with our ideals? If Life, Liberty and the Pursuit of Happiness are for ALL of us, then I think we have to opt for the virtuous circle.
Thousands Sign Petition at a Mass Meeting Held in Union Square
Pastor Flays Legislature
Dr. John Haynes Holmes Says Bosses Have No Right to Stop the Expression of the People's Will
Petitions asking for a referendum vote upon the question of reducing gradually the tax rate upon buildings in New York to one-half the tax rate upon land, through five consecutive reductions in as many years, were signed yesterday by several thousand persons at a mass-meeting held in Union Square under the auspices of the New York Congestion Committee. The meeting was announced as a public protest for lower rents.
Benjamin Clark Marsh, Executive Secretary of the Committee on Congestion of Population in New York, was Chairman. Dr. John Haynes Holmes of the Church of the Messiah said that the Legislature "in the wisdom of the Big Sachem at Fourteenth Street has decreed that the people are not fit to register their judgment as to this bill. I, for one, desire to protest against the boss or set of bosses who presume to forbid the people to express their will on any question."
Frederick Leubuscher, representing the New York State League of Savings and Loan Association, said:
"It was admitted by some of the land speculators at the hearing of the Lower Rents bill at Albany that they were unable to answer our arguments. Nevertheless, a Democratic majority stifled the bill. As a savings and loan association man, I am interested particularly in the enactment of this proposed law. The stimulation of the erection of buildings and the making of improvements generally will be more market in the suburbs, where modest homes, costing from $2,000 to $5,000 to erect, are most in demand."
The purpose of the law was explained in a letter from Assemblyman Michael Schaap, who introduced the Salant-Schaap bill in the lower House of the State Legislature.
"If the tax rate on buildings had been half that on land this year," he wrote, "the rents of the average tenant would have been at least one month's rent less than it was; owners of small houses would have paid $15 to $25 less taxes than they do, and there would be fewer than 9,000 evictions for non-payment of rent.
"The taxes on all adequately improved property would have been reduced and the city would have recovered almost $20,000,000 more of ground rent which now goes to a few people of New York and to absentee landlords. This ground rent at 6% is over $273,000,000. The people of the city have created and maintain these values, but they get less than $84,000,000 of it -- the land owners get the other $189,000,000. Rent and taxes on homes and other buildings would have been reduced by at least $20,000,000."
The Rev. Alexander Irvine said that one family out of every 150 in New York City was evicted for non-payment of rent, because of the unjust taxation of improved property as contrasted with vacant land. Only 3% of the residents of the city own land, the speaker asserted.
John J. Hopper, Chairman of the New York State Independence League, said:
"A tax upon anything tends to lessen the supply of that commodity. By the same principle a tax upon buildings tends to lessen their number. A bill tending to reduce the tax upon buildings will bring about the construction of more buildings, and as a result there will be more competition and a corresponding reduction in rents.
"The Legislature refused to let us decide this question for ourselves, asserting that we did not know enough to vote on the subject of taxation. When we realize that for the expenses of the National Government each one of us pays $7.50 a year; for the state expenses, $5.50 and for the city expenses $38.50, making a total of $51.50 per individual, or $255 for a family of five, then we understand that we must think upon this subject of taxation.
Frederick C. Howe, Director of the People's Institute, said:
"Think of the stupidity of New York citizens. We talk about bankruptcy and lack of city credit and yet we give away each year at least $100,000,000 in the speculative increase of land values which the growth of the community creates. That is, the increase show by the tax valuation of the city. New York could pay a large part of its present budget out of the land speculation profits alone, if it taxed land and exempted buildings."
C. N. Sheehan of the Twenty-eighth Assembly District Board of Trade, Brooklyn, and J. P. Coughlin of the Central Labor Union of Brooklyn also spoke.
Dewey Beach — The Town of Dewey Beach [Delaware] is marching to the beat of its own drum: Town officials have imposed a fee of $109 to all bands that play in town. No other town in the Cape Region imposes such a law. “This is just a matter of fairness,” said Mayor Diane Hanson. ... Hanson said if her cleaning lady has to buy a business license, it is fair to require bands to buy one as well.
Dewey Beach, Delaware, prides itself on not having a property tax. This forces it to rely on taxes which are far less just and less logical than a simple tax on land value would be -- including a licensing fee for anyone who works in Dewey Beach!
And if one lets one's license skip a year, and then needs it again, one must pay for the year one didn't have a customer there, as well as the years in which one does.
Why? Well, perhaps the explanation is partially related to the fact that one company owns an amazing amount of the land in Dewey Beach, and it is rented out on ground leases which are currently at a very low level -- say, $550 to $650 per year -- and whose end comes in about 11 to 14 years. Many of these lots sell for $600,000 or more, when one comes on the market; those in the ocean block perhaps significantly more. The County last assessed the land in the late 1960s. County taxes on the cottages (excluding the land), which typically sell for $200,000 or less because they are aging and must be removed at the end of the lease, run from $300 to $900 a year (and the county tax is mostly for the school district). In neighboring Rehoboth Beach, city taxes typically run about 1/4 of county taxes, though the relationship is not constant because one relies on a 1960s assessment, the other on a 1970s one!!
Dewey Beach collects something each year from property owners to restore the beaches, in case there is erosion that the federal government or state government won't pay to correct, but the beaches were renourished this past winter, at no expense to the property owners. According to an article from a week or two ago, the tax is $0.40 per $100 of assessed value. That article says, "A property in Dewey Beach with an assessed value of $200,000 would pay a total of $240 each year in taxes – $80 for beach replenishment and $160 for capital improvements." But it doesn't seem to realize that the only homes with assessed values of $200,000 are valued by their sellers at over $6 million! $80 is trivial to the owner of those $6 million oceanfront homes.
But to the typical worker in Dewey Beach, the $109 annual license to work within the borders is not so trivial.
Does it make sense to tax workers? Or is there a better tax base than productive activity? What taxes work best? Which taxes do the least damage?
Is working a privilege, or a right? I understand licensing doctors, nurses, lawyers and the like; I don't understand licensing singers, painters, waiters, and other workers.
The following list comprises the most commonly asked questions about the concept of making land and resource rentals the source of revenue for government. As you continue this study, you will see the value from giving resources the respect they deserve and the benefits resulting from the freeing of labour, production and exchange from taxation. If you have any questions which are not covered here, or observations you would like to put to our panel, please feel free to do so by sending your question as an e-mail query and we will attempt to respond.
The inclusion of land and resources in the economic equation is central to any solution for revenue raising. A taxation solution which does not consider the nature of taxation itself and allows the continuing private monopolisation of community land and resources fails to recognise the essential role land plays in the economic equation and will not work. Land is the only element in the economic equation which is both fixed and finite. It can be monopolised. It is a unique class of asset which must be treated accordingly. If we were to wrest not the land itself, but its unimproved value from private monopolies and return the value to the community — whose very presence creates it — then we would have reduced many problems in one stroke with great benefit to production, to the environment and to the cause of individual freedom and justice.
On the subject of land and resource rents, Henry George said this:
The tax upon land values is the most just and equal of all taxes. It falls upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, then will the equality ordained by nature be attained.
WELL, Townsend, I sure am glad to see you! Where are you going now?"
"Why! sit down, George, I have to get off at the next station. My stars, it's good to see you again. I heard you'd gone daffy over some tax plan. What is it all?'
"Oh, I'll tell you that, but first I want to know about your new Fair Grounds."
"Oh, that's great. You see we got a big tract of land on the harbor, river, railroads, highlands, water power, everything, and we've organized it on modern principles. We let anybody have a stand that wants it and he pays nothing but what his lot would rent for and we've nearly filled it up already."
"Gad, Townsend; they bring the value and you keep the land? You'll be a millionaire shortly."
"Well, you know it's a Company. Every leaseholder becomes a member. Of course I draw a good salary, but it's not that, it's the way the thing grows that tickles me. I'd rather work for Freeville than if I owned the place. I guess if I owned the place, I'd just let the people work for me, but this is 'the earth for all.'"
"But there must be plenty of pickings. I suppose you get a commission on the goods the exhibitors sell?"
"Commission nothing! Our plan is to make it the best place in the United States to sell goods; if we charged a commission other places would have an advantage over us."
"The exhibitors put up their own buildings, do they?"
"They do that, fine ones, too, because you see we pay all the taxes on them, so they are not penalized for building handsome stores. Other places fine anyone that commits an improvement."
"Ha! Ha! Good! then when anyone goes away or fails, you get the building, eh?"
"Nonsense, the buildings belong to the people that build them; they sell them. We want to make it attractive to sellers as well as buyers. That's the reason we have community water supply and street cars, free playgrounds, and all"
"But that must cost a lot of money. Where do you get it?"
"Why, don't you see, George, the tenants pay the rents of the land and out of that we pay their taxes and all their public expenses."
"O, I see—well that land will get to be very valuable. Can't you let me in on a nice plot? Then I'll hold it for a big profit when the place is all filled up."
"That wouldn't do you any good. As fast as the land becomes more valuable, the rent we collect rises too."
"But I could put buildings on it and sublet them?"
"You could; but the increasing rents of the land would go to the Freeville collector. You'd get back only the rent of the building and there's piles of buildings going up owing to our tax system."
"Your tax system. Oh, yes, you fix the taxes yourselves. Then you can collect licenses and taxes on incomes and sales and all sorts of things."
"Not us, old man; we want to make it a great place to live in, not to get skinned in. The more trade, the more profits, and the more profits the more people. We leave people free to do all the trade they can. That's what helps the place. Everyone works for himself, not for a Collector of fees. I tell you it's a success. But we're near my station and you haven't told me about your fad. What was it you called it, land tax, was it? But we're near my station. Well good-bye. Write me about it."
"Oh, it isn't necessary; it's just like what you have at Freeville Fair. If everybody pays for whatever privilege he gets, that will pay all public expenses. Then you don't need to fine one man and subsidize another to make them work. Well, good-bye and good luck. Yes, that's what they call the Land Value Tax."
Here's a piece from a 90 year old journal. There are acres in Manhattan whose value is far higher today -- and the landlords are still reaping what the working people and visitors to New York are sowing.
APPROPRIATING THE GIFTS OF NATURE By Walter Thomas Mills.
There are portions of New York City in which the land is valued at $40,000,000 an acre. That means $8000 each day from each acre for the landlord, and that entirely unearned by him, before there is a penny for any other purpose. Probably not less than two and one-half million dollars a day, or almost a billion dollars a year, must be earned by the people of New York City and turned over to landlords for permission to use the island, which is a gift of nature, and for the advantages that are protected and maintained by the industry and enterprise of all of the people.
In The Great Adventure, April, 1921
Think what NYC -- and America -- would be like if that "permission to use the island" money was treated as our logical public revenue source, instead of as individuals', corporations' and trusts' private revenue source.
Recall the wisdom of Leona Helmsley: "WE don't pay taxes. The little people pay taxes."
For ages sorcerers and magicians kept their secrets, their charms and enchantments to deceive the simple and unwary. At length most of such marvels are relegated to jugglers and sleight-of-hand performers, and we are amused to be deceived. We expect to see things come out of nothing; to see the unbroken eggs come out of the beaten scarf; the guinea pigs come out of the empty silk hat, the ducks come quacking out of the empty box; silver dollars come out of the boy’s ear or empty pocket. But there is yet one piece of magic in which many still believe. That is the magic of land values materializing from a vacant rubbish-covered lot or tract of land on which not a lick of work has been done.
Our modern sorcerers do the trick and roll up the hundreds of thousands of dollars out of nothing, and we look with gaping mouths, wondering where the big roll of bills came from. No question is asked. Something came out of nothing; that is all. Ah! if we could all learn the trick! No more work for anybody! Why should we work when we can produce money from nothing? Nobody investigates; we have the money on us, but sleep with untroubled mind, for no man can say “That is mine.” True, no man can say “That rake-off is mine”; but all the community could rise and say, “That rake-off is ours. We, all together, created the demand for the lands of the community by our presence and industry. Before we came, the values were not. If we should all go, they would disappear. Your money does not come from nothing, as some suppose. The whole community contributes to your roll. It should be ours to pay our taxes with. For lack of it we are ﬁned for our houses, furniture, machinery, crops, merchandise, etc.”
Oh, come off with your magic of getting something for nothing! Take your chances with the rest of us, who earn our money by work. We have been shown, and are on to your magic. We are going to vote for Amendment Number 20.” Thus will sorcery fade before reason. —Lona I. Robinson, in The Great Adventure, October 23, 1920
"The land is common to all. All have the same right to it; but there is good land and bad land, and everyone would like to take the good land. How is one to get it justly divided? In this way: he who will use the good land must pay those who have got no land of the value of the land he uses," Nekhludoff went on, answering his own question. . . . "Well, he had a head, this George," said the oven builder, moving his brows. "He who has good land must pay more."
— COUNT TOLSTOY, Resurrection, Book II., Chap. 9.
Tolstoy has rightly discerned the evils which follow the uprooting of the people from fostering Mother Earth, and the incubation of a day-wage-earning, urban, industrial proletariat.
As a fan of the Philaphilia blog, this is something I’ve been worrying about, and Bruce Stahl and Audrey Spalding are confirming my worst fears.
Land banks are a good idea, but they need to be designed well. What I mean by this is that decisions around who can buy land and what can be built on it need to be relatively insulated from narrow neighborhood politics. You can’t have NIMBYs blocking the Land Bank from selling parcels to developers in order to block new development.
Unfortunately, that’s what Philly’s land bank ordinance seems likely to do:
One rundown St. Louis building had offers from four different buyers, all rejected by the land bank. But when the area alderman showed up at a land bank meeting and asked that it be sold to another buyer, it was.
Unfortunately, the same policy has been written into Philadelphia’s land bank bill. In its current form, it would forbid the bank from entering into a transaction without the approval of the district Council member. This will almost certainly thwart development.
That’s what often happens in St. Louis, where a former deputy mayor for development told us that “the sort of working arrangement we have with the aldermen is that if they don’t want to do something, we don’t want to do it.”
To get land back to productive use as quickly as possible, a land bank should accept all reasonable offers, even if politicians oppose them.
Philadelphia should also take note of St. Louis’ misguided efforts to hold on to properties for future development. Research by the Show-Me Institute revealed that from 2003 to 2010, the St. Louis land bank rejected nearly half of all purchase offers, mostly because it was holding properties for future development. But these hoped-for future developments rarely materialize.
Philadelphia’s land bank proposal similarly establishes goals that may undermine efforts to return land to productive use. They include such laudable priorities as encouraging “affordable or mixed-income housing that is accessible or visitable,” as well as “community facilities that provide needed services and enrichment opportunities; side and rear yards; urban agriculture; and community open space.” Such goals may have the unintended consequence of providing reasons for the land bank to reject purchase offers that don’t fit its vision.
Affordable housing and mixed-income housing are excellent goals, and they are goals I care very much about, but the best way to keep rents low is simply to build more supply.
Attaching these extra requirements to what can be done with vacant land parcels could have the perverse effect of raising rents. If NIMBYs are able to hijack the land bank to block development of more housing square footage, you could end up with a shortage of housing, and rising rents.
City council should change the proposed Land Bank ordinance to remove District reps from the approval process, and remove the extra requirements for land uses.
The goal of the Land Bank is to convert vacant land into productive buildings that contribute to the tax rolls as quickly as possible. Tacking on a bunch of red tape is going to slow turnover and defeat the purpose. The regular zoning rules should be sufficient to ensure acceptable uses.
This goes back to another point I’ve been trying to make, which is that funding more of Philly’s public services with a land value tax would be a great complement to the land bank. An LVT would create a strong incentive for developers to develop land parcels to their highest and best use, raising the bar to ensure that only high-quality projects get built, and discouraging low-value uses of land.
A tax upon ground-rents would not raise the rent of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist and exacts the greatest rent which can be got for the use of the ground.
— ADAM SMITH, Wealth of Nations (1776), Book V., Chap. 2, Art. I.
Let the fields and all the soil, and, if possible, even the houses, belong to the state, that is, to him which is the depositary of the right of the state, so that he may let them out for an annual rent to the inhabitants of the cities and the cultivators. This will exempt all citizens from extraordinary taxes in time of peace.
— SPINOZA, Tractatus Politicus, Chap. VI., On Monarchy, Sec. 12.
The remarkable thing about this story, to my eye, is that the size of the lot isn't even mentioned! It is worth $1 million land rent per year, and one might infer from the information provided that the lot is about 10,000 square feet, or less than 1/4 acre.
Capitalized at 5% (also known as "20 years' purchase") the lot would sell for about $20 million.
I assume that in addition to the land rent, the tenant pays the property tax on the land. So the entire $1 million annual land rent flows out of NYC, to the property's owner, in Marshall, Virginia.
What, pray tell, has the land owner done to earn that land rent?
Consider how many people's wage taxes and sales taxes could be lifted, and what that additional spending power could do for the local economy. Consider what would happen if there were no taxes to be paid on the apartments or on people's condo structures.
Or NYC can just keep letting the land rent leave the city, and even leave the country, continuing to flow into private pockets, just as if they'd rendered someone some service and earned it!
Land rent is natural public revenue, and we permit landlords to privatize it. Aren't we generous with our patrimony? (Leona told us the truth!)
The developer of a nine-story Karl Fischer rental apartment building planned for a corner site in the East Village signed a 99-year ground lease that requires payments each year of about $1 million.
The development company, YYY Third Avenue, signed the long-term lease for the vacant site at 74-84 Third Avenue, at 12th Street, April 27, 2011, however, a memorandum of the lease was not recorded in public records until last Wednesday, city property documents show.
A source citing city property records said the lease payment, which is not specifically recorded, could be inferred to be about $1 million per year. Prior to the document’s release, the annual lease cost was not known.
The prolific and controversial architect Fischer filed plans to build an 82,000-square-foot, nine-story residential building with 94 units, city Department of Buildings online records show. The permit has not been approved and is pending, DOB data indicate, and is to include nearly 9,511 square feet of retail, as well.
You might also be intrigued by the URL for the story ... I'm not sure what to make of it.
I've taken some liberties with the formatting, because sometimes bullet points help ... you can find the original in the online library at http://schalkenbach.org/ I was fortunate enoguh to meet Bob
The Earth is the Lord's
by Robert V. Andelson Professor Emeritus of Philosophy, Auburn University, Auburn, Alabama
George Bernard Shaw, in a letter written in 1905 to Hamlin Garland, describes how, more than twenty years earlier, he had attended Henry George's first platform appearance in London. He knew at once, he said, that the speaker must be an American, for four reasons:
"Because he pronounced 'necessarily' . . . with the accent on the third syllable instead of the first;
because he was deliberately and intentionally oratorical, which is not customary among shy people like the English;
because he spoke of Liberty, Justice, Truth, Natural Law, and other strange 18th-century superstitions; and
because he explained with great simplicity and sincerity the views of the Creator, who had gone completely out of fashion in London in the previous decade and had not been heard of there since."
George's magnum opus, Progress and Poverty (the centenary of which occurred in 1979), is characterized by the same moral and religious emphasis remarked by Shaw in its author's London lecture, an emphasis that rises in the final chapter to the noble declaration of a faith revived. It is, I think, therefore entirely appropriate that I focus today on the moral and religious aspects of his basic proposal for economic reform — his proposal to lift the burden of taxation from the fruits of individual labor, while appropriating for public use the socially-engendered value of the land.
For land value taxation is
not just a fiscal measure (although it is a fiscal measure, and a sound one);
not just a method of urban redevelopment (although it is a method of urban redevelopment, and an effective one);
not just a means of stimulating business (although it is a means of stimulating business, and a wholesome one);
not just an answer to unemployment (although it is an answer to unemployment, and a powerful one),
not just a way to better housing (although it is a way to better housing, and a proven one);
not just an approach to rational land use (although it is an approach to rational land use, and a non-bureaucratic one).
It is all of these things, but it is also something infinitely more: it is the affirmation, prosaic though it be, of a fundamental spiritual principle — that "the earth is the Lord's, and the fulness thereof."
It is the affirmation of the same principle to which Moses gave embodiment in the institution of the Jubilee, and in the prohibition against removing ancient landmarks, and in the decree that the land shall not be sold forever. It is the affirmation of the same principle to which the prophets of old gave utterance when they inveighed against those who lay field to field, and who use their neighbor's service without wages. It is the affirmation of the same principle to which Koheleth gave voice when he asserted in the fifth chapter of Ecclesiastes that "the profit of the earth is for all."
The earth is the Lord's! Consider what this means. It means that
our God is not a pale abstraction.
Our God is not a remote being who sits enthroned on some ethereal height, absorbed in the contemplation of his own perfection, oblivious to this grubby realm in which we live.
Our God is concerned with the tangible, with the mundane, with what goes on in the field, in the factory, in the courthouse, in the exchange.
Our God is the maker of a material world — a world of eating and sleeping and working and begetting, a world he loved so much that he himself became flesh and blood for its salvation. In this sense, then,
our God is eminently materialistic, and nowhere is this more clearly recognized than in the Bible, which, for that very reason, has always been a stumbling-block and an offense to those Gnostics, past and present, whose delicacy is embarrassed by the fact that they inhabit bodies, and for whom religion is essentially the effort to escape from or deny that fact.
Our God is not a dainty aesthete who considers politics and economics subjects too crass or sordid for his notice.
Neither is he a capricious tyrant who has enjoined an order of distribution that condemns retirees after a lifetime of toil to subsist on cat food while parasitic sybarites titillate palates jaded by the most refined achievements of the haute cuisine. It is men who have enjoined this order in denial of his sovereignty, in defiance of his righteous will.
The earth is the Lord's! To the biblical writers, this was no mere platitude. They spelled out what it meant in concrete terms. For them, it meant that the material universe which had been provided as a storehouse of natural opportunity for the children of men was not to be monopolized or despoiled or treated as speculative merchandise, but was rather to be used reverently, and conserved dutifully, and, above all, maintained as a source from which every man, by the application of his labor, might sustain himself in decent comfort. It was seen as an inalienable trust, which no individual or class could legitimately appropriate so as to exclude others, and which no generation could legitimately barter away.
The earth is the Lord's! With the recognition of this principle comes the recognition of the right of every man to the produce which the earth has yielded to his efforts. As the Apostle Paul says in his first letter to the Church at Corinth, if the ox has a right to a share in the grain which it treads out, surely a human being must have a right to the fruits of his labor. For the exercise of this right, he is, of course, accountable to God — but against the world, it holds.
To one who takes seriously, as I do, that insight about human nature which is expressed in the doctrine of original sin, there can be nothing self-evident about the rights of man. In the words of my friend, Edmund A. Opitz, "the idea of natural rights is not the kind of concept which has legs of its own to stand on; as a deduction from religious premises it makes sense, otherwise not." The French Revolution and its culmination in the Reign of Terror demonstrated that humanistic assumptions afford no secure foundation for the concept of human rights. That concept, for the believer, can be neither understood nor justified except in terms of what Lord Acton so eloquently speaks of as "the equal claim of every man to be unhindered in the fulfilment by man of duty to God."
This is what it comes down to: How can a person be "unhindered in the fulfilment of duty to God" if he be denied, on the one hand, fair access to nature, the raw material without which there can be no wealth; and on the other, the full and free ownership of his own labor and its earnings?
You who have studied the history of the Peasants' Revolt in sixteenth century Germany know that in calling for the abolition of serfdom and the restoration of the common lands, the peasants were simply voicing demands which were logically implied by Luther's doctrine of the priesthood of all believers — that the service of God to which all the faithful are elected requires, as I have said, access to the land and its resources, and the free disposal of one's person and of the guerdon [editor's note: reward] of one's toil. Despite the excesses that accompanied this uprising, Luther's part in the suppression of a movement which stemmed logically from his own teaching must always be a source of pain to those of us who revere him for his spiritual genius and integrity.
The earth is the Lord's! The same God who established the just authority of governments has also in his providence ordained for the major source of revenue. Allow me to quote from Henry George:
In the great social fact that as population increases, and improvements are made, and men progress in civilization, the one thing that rises everywhere in value is land, we may see a proof of the beneficence of the Creator . . . In a rude state of society where there is no need for common expenditure, there is no value attaching to land. The only value which attaches there is to things produced by labor. But as civilization goes on, as a division of labor takes place, as men come into centers, so do the common wants increase and so does the necessity for public revenue arise. And so in that value which attaches to land, not by reason of anything the individual does, but by reason of the growth of the community, is a provision, intended — we may safely say intended — to meet that social want. Just as society grows, so do the common needs grow, and so grows the value attaching to land — the provided fund from which they can be supplied (George 1889).
On another occasion he wrote:
The tax on land values is the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses (George, P&P, 421).
And yet, my friends, in the topsy-turvy world in which we live, this provided fund goes mainly into the pockets of speculators and monopolists, while the body politic meets its needs by extorting from individual producers the fruits of honest toil. If ever there were any doubt about the perversity of human nature, our present system of taxation is the proof! Everywhere about us, we see the ironic spectacle of the community penalizing the individual for his industry and initiative, and taking away from him a share of that which he produces, yet at the same time lavishing upon the non-producer undeserved windfalls which it — the community — produces. And, as Winston Churchill put it, the unearned increment, the socially-produced value of the land, is reaped by the speculator in exact proportion, not to the service, but to the disservice, done. "The greater the injury to society, the greater the reward."
We hear constantly a vast clamor against the abuse of welfare. I do not for a moment condone such abuse. Yet I ask you, who is the biggest swiller at the public trough?
Is it the sluggard who refuses to seek work when there is work available?
Is it the slattern who generates offspring solely for the sake of the allotment they command?
Or is it the man — perhaps a civic leader and a pillar of his church — who sits back, and, with perfect propriety and respectability, collects thousands and maybe even millions of dollars in unearned increments created by the public, as his reward for withholding land from those who wish to put it to productive use.
Talk about free enterprise! This isn't free enterprise; this is a free ride.
But if that same person were to improve his site — if he were to use it to beautify his neighborhood, or to provide goods for consumers and jobs for workers, or housing for his fellow townsmen — instead of being treated as the public benefactor he had become, he would be fined as if he were a criminal, in the form of heavier taxes. What kind of justice is this, I ask you? How does it comport with the Divine Plan, or with the notion of human rights?
Let me make this clear: Acquisitiveness, or the "profit motive," if you will, is a well-nigh universal fact of human nature, and I have no wish to suggest that the land monopolist or speculator has any corner on it. Even when I speak of him as a parasite, this is not to single him out for personal moral condemnation. He is not necessarily any more greedy than the average run of people. As my late friend, Sidney G. Evans, used to say: "if you have to live under a corrupt system, it's better to be a beneficiary than a victim of it." But the profit motive can be channeled in ways which are socially desirable as well as in ways which are socially destructive. Is it not our duty to do everything we can to build an order without victims one in which the profit motive is put to use in such a way that everybody benefits?
I do not harbor the illusion that the millennium is going to be ushered in by any program of social betterment. My theological orientation does not happen to be one which minimizes the stubbornness of man's depravity. Yet to make the depth of human wickedness an alibi for indifference to the demands of social justice is to ignore the will of him who said:
Take away from me the noise of your songs; to the melody of your harps I will not listen. But let justice roll down like waters, And righteousness like an ever-flowing stream. (Amos 5:23-24)
To some of you, the promotion of specific programs for social justice is seen as part of the responsibility of the institutional church; to others it is not. But all of us, I am sure, can agree that the individual Christian (or Jew or Moslem, Hindu or Buddhist, as the case may be) has a solemn moral obligation to study the issues carefully, and then involve himself strenuously in whatever social and political efforts his informed conscience tells him best advance the cause of right.
O shame to us who rest content While lust and greed for gain In street and shop and tenement Wring gold from human pain, And bitter lips in blind despair Cry, "Christ hath died in vain!" Give us, O God, the strength to build The city that hath stood Too long a dream, whose laws are love, Whose ways are brotherhood, And where the sun that shineth is God's grace for human good.*
The earth is the Lord's!
* From "O Holy City, Seen of John" by Walter Russell Bowie. Copyright, 1910, by A. S. Barnes and Company. Quoted by permission.
At the outdoor mass you held in Wroclaw in Poland during your recent visit to that country, you said the following very true and sincere words:
"The Earth is capable of feeding everyone. Why therefore -- here at the end of the 20th century -- should thousands of people die from starvation" -- "Pray solidarity will prevail over the unrestrained thirst for profit and ways to handle laws of trade, which do not take into consideration inalienable human rights".
It was the same concern about the greed of the wealthy and the plight of the poor, that your predecessor, Pope Leo XIII, expressed in his Encyclical Letter of 1891, 'Rerum Novarum'. Yet, in the more than hundred years that have past, if there has been a change, it has been for the worse!
The wealth is there. The growth of industry and the discoveries of science about which Pope Leo spoke, are even more fantastic and surprising than he would have imagined in his most inspired dreams. The enormous fortunes of individuals, of which he also spoke, have become more enormous. Yet the poverty is still there. Even in countries that are considered wealthy, people are homeless and live in cardboard boxes; people die, not just by the thousands as your Holiness said in Wroclaw, but by the millions, from poverty related diseases, malnutrition and starvation. You are indeed right to ask the question:
THE EXCLUSION FROM THE GIFTS OF GOD
As your Holiness will know, the Encyclical Letter of 1891 was not only an attack on socialism, but also a strong defence of the right to hold land as private property, a right that Pope Leo XIII claimed to be natural.
But the right to hold land includes the right for the owner to exclude other people from it, and, as all usable land in industrially developed countries is owned in that way, people without such a right will be unable to enjoy the gifts of God unless they accept the conditions exacted of them by a landowner. Neither can they work, reside nor relax without land, and again they have to accept conditions exacted by a landowner.
Normally the landowner will ask people to pay the market-determined site rental, which is high because of the many excluded people who want land, or he will offer to let them work at a market-determined wage, which is low because of many excluded people wanting a working place.
Some people, in fact -- as a consequence of the many excluded -- a growing number of people, can neither qualify for a job nor afford to pay the site rental, and they have to live on the streets, on the roads, at the dumping grounds or wherever they can find a poor shelter, some clothes and a little to eat. Some of them find that crime and prison give them a better life than there is available through the legal opportunities open to them.
In some countries Social Security is implemented to mitigate the cruel consequences of the exclusion of people from the gifts of God. The Social Security bill is not paid by landowners, but by entrepreneurs, wage earners, pensioners, savers and consumers.
In other countries only private charity is available to relieve the hardships.
But neither Social Security nor charity will change the basic injustice that causes the horrible conditions of the people excluded, that increases the site rentals to be paid for the use of land, and reduces net-wages, widening the gap between poor and rich. The basic cause of these evils has to be destroyed.
Political leaders from all over the world, including representatives of the Holy See, agreed at the United Nations conference on Human Settlements (Habitat II) at Istanbul last year, that:
"The failure to adapt, at all levels, appropriate rural and urban land policies and land management practices remains a primary cause of inequity and poverty".
LETTER TO POPE LEO XIII
Allow us, your Holiness, to point to the Open Letter of September 11th, 1891, written in New York by Henry George and sent to your predecessor his Holiness Pope Leo XIII, as a response to 'Rerum Novarum'.
Published as a book this Open Letter has been read by many thousands, and still today the book is sold and read.
Henry George did consider 'inalienable human rights' and 'unrestrained thirst for profit and ways to handle laws of trade'. On exactly this background he spoke for all people's equal rights to the gifts of God.
To maintain this right for everybody and at the same time to allow exclusive right for some to own land as private property, he advocated that people who are given the exclusive right to own land -- and thereby the right to exclude other people from the gifts of Nature -- should pay a compensation to the people they exclude (in fact to all citizens).
The compensation, as a duty to be paid by the landowners, should be the market-determined rentals of the sites from which they can exclude others. This being a fair charge of justice as the rentals are not due to efforts or investments made by the landowners, but due to the development of society and to the growth of the population of human beings, all wanting a place to work, and a place to reside.
The rentals should be collected from all landowners by society, and the revenue should be used to the benefit of all citizens. In that way, Henry George emphasized, all citizens would be able to get their equal share of the gifts of God.
HOLY INCENTIVES OR HOLLOW FALSEHOOD
We do agree with your Holiness and with Henry George that people have private right to property created by man, the right to the fruits of their labour; and also that people can achieve private right to exclusive possession of land, from which they can exclude other people.
But we find it logically inconsistent to believe that people have equal right to life and to be on the Earth, when at the same time some of them have exclusive right to own land as private property without paying compensation to those people whom they exclude from their land.
Your Holiness' sincere words, as quoted initially in this letter, accord with Rerum Novarum of 1891 and with the Habitat II statement quoted above, but they will only become true if your Holiness will succeed in urging on the rulers/governments of this world to collect the annual market-determined Site Rentals of all land in their countries, and distribute the revenue thus acquired to the benefit of all their citizens.
If your Holiness could succeed in persuading the governments to do so, all people on Earth would gain equal access to the gifts of Nature, and true solidarity would become a reality. If not, all statements about equal right to life, to work, to education and to residence, will continue being hollow and false; and our successors will not see a change for the better; on the contrary, they will see the gap between very rich people and alienated poor people grow bigger, and the problems of poverty grow more serious than they are today.
We pray your Holiness may succeed in convincing the governments of this world of the importance of public collection of the annual market rental of all land, and the revenue to be used for equal benefit of all the citizens, thus to provide far all human beings, equal rights to the gifts of Nature.
Let this become the manifestation of the new Millennium, the 2000 year anniversary of the birth of Jesus Christ. Let it become a Jubilee in the original meaning of the word, striking unjust shackles from society; thereby preparing a new age of humanity, a social life in friendship and peace.
FOR SINGLE TAX Henry George Men Hold a Mass Meeting at the Rink. Cleveland's Name Enthusiastically Cheered. Addresses by the Author of "Progress and Poverty," by Hon. Thomas G. Shearman, Rev. Hugh O. Pentecost, Louis F. Post and Others.
Another great audience gathered at the Clermont Avenue Rink last night to hear the discussion of political issues. It filled every seat in the big hall, crowded the platform and the galleries, choked the entrances and formed a dark dado around the sides of the room wherever standing place was available. It was the single tax men's night to own the speakers' platform, and the key to all that was said was conveyed in plain words above the speakers' desk: "Free Trade, Free Land, Free Men." The audience was not only large, but it was wide awake. It enjoyed the brass band and it listened attentively to every word of the single tax orators and cheered vociferously in the right places to show that a large proportion of the crowd was in sympathy with the sentiment expressed above the speaker's head. It had a habit of hissing, too, and whenever Mr. Blame, Mr. Andrew Carnegie or the Tory Government of England was mentioned it practiced this habit. The meeting was of citizens who favor the election of Cleveland and Thurman, and though less was said on this subject than on "Free Trade, Free Land and Free Men," the occasional mention of Mr. Cleveland's name left no doubt as to the sentiment of the vast assemblage regarding his candidacy. They cheered for him uproariously, spontaneously and untiringly. The slightest allusion to him called forth a, wild outbreak.
C. T. Christensen had agreed to preside at the meeting, but was called out of town at the last moment, and Thomas G. Shearman, who was booked as one of the speakers of the evening, acted as chairman. Beside him on the platform sat Henry George, the Rev. Hugh O. Pentecost, Louis F. Post, James Hickling and others of the shining lights of the Single Tax legions. Mr. Shearman called the meeting to order and said:
While we hope and trust that in this audience there are many Protectionists, that both sides of this great question are represented here, we wish it understood that on this platform we stand for no half way politics, no semi Protection, no false pretenses, no evasions. We are absolutely for Free Trade [applause] as we are for free land and for free men. In the old time of slavery the master would give everything to his slave rather than Free Trade. He would give him free whisky as the Republicans would give tree whisky to the white slaves of today. Slavery was a system of "Protection" to the inferior workman. The slave was protected in the liberty to work for his employer. The Irish people have had Protection. Within the last hundred years 80 statutes have been passed by a British Tory Parliament, composed mostly of Protectionists, furnishing "Protection" to Ireland, the very statute under which Dill on was imprisoned in an Irish jail without the privilege of a trial by jury or by any decent Judge was a "Protection" law. The Tory Parliament gave it the name Protection. But Irishmen called it Coercion. Mezeroffs paper, that preaches the assassination of innocent women and children, is being circulated by the First Ward Republicans, because of its advocacy of Protection. He should advocate this American system of Tariff, for it is simply coercion. Protection coerces the American workingman into assisting the development of monopolists and Trusts. It puts coercion upon him and upon American industry. It fosters no industry. It murders industry. What does a Tariff do? Can any one look me in the face and say it assures him better pay for his toil? It is simply coercion to prohibit you from carrying on an industry that brings you into relations with other nations. What does the Government do when it puts a "Protective" Tariff on coal? It says, You shall get no more coal for your labor than Mr. Elkins, Mr. Maine and the other coal monopolists shall allow you to have. The land owners of this country, those who have been sharp enough to get possession of the richly productive mining tracts, grind the manufacturers that grind you. You must first get $100,000 to put into a mine or manufactory to be protected under this American system. We are for Free Trade because it means the highest wages: because the history of this country shows that with every advance of the Tariff there has been a depression of wages. What stuff is talked to you about the importation of foreign goods throwing out of employment American workmen. The Protectionists shout that increased importations will drive out the gold of the country. There never was enough gold in this country to pay for a single year's importations. All the gold in the world would not buy the goods that have come across the ocean to this country in the last ten years. So what can't be done, in spite of the tearful arguments of Protectionists, won 't be done. In the last 27 years, since our Protective Tariff began, more gold has gone out of this country than during the years of '46 and '47, when we had Free Trade. When the Tariff reached its highest point the greatest amount of gold went out. The export of gold is merely a mercantile transaction. The other charge is that Free Trade will throw the American workman out of employment. If you could import $7,000,000,000 instead of $700,000,000 worth of goods the call for American labor would advance ten times what it is now. Why are Brooklyn and New York great manufacturing cities? Why are we more successful than Chicago or St. Louis? They have markets on both sides of the ocean, while by our system of Protection we are cut off from one side, it is because we, from our location, can get more readily material from across the ocean. If the mad scheme of the Protectionists could be carried out to shut out entirely this foreign material, and compel us to rely on our home production, what a blight would fall upon this city. Sweep away this Protection system and we would have all this foreign material brought in to work up, and would have two markets instead of one. Yet you will go on in one way or another "protecting." You might have liberty, freedom of trade and of commerce, and double the manufacturing business of those cities. You hear of the revenue reformer being converted into a Free Trader; of the moderate Protectionist into a revenue reformer, but in this campaign you read of no Free Trader being converted to Protection. Every gain the Republican party has made from the Democratic ranks has been of those men who opposed the freeing of the slave.
After the cheering had died away Mr. Post stepped forward upon the platform and amid renewed applause walked back and forth triumphantly. "Last night," he said , "Mr. McKinley stood upon this platform." [Laughter, applause and hisses.] Then an enthusiastic Republican got up and shouted "Three cheers for McKinley." In the confusion the crowd thought that he was yelling for Post and followed his lead with a will. Mr. Post continued:
I am glad to hear that demonstration for, in the first place, it shows that we have people here to convert, and in the second, because it is due him from Protectionists as the best representative of Chinese polities in the country. [Long continued cheers.] He says that the Tariff is not a tax, that it is paid by the man who sends his goods to this country to sell. The Tariff on firecrackers is 100%. I want Mr. McKinley to explain how much the Chinaman makes on his fireworks after he has paid that tax. Our Chinaman says we are absolute Free Traders. It is true there is no 7% about us. We are with the Democratic party because we get that little reduction from them, which is better than nothing and a step in the right direction. If we are to have trade, why should we not have it free. We have Free Trade all over the United States. In fact, here is the only example of absolute Free Trade in the whole world. I have a horse that I want to exchange for two mules. I can take him to New York, to Pennsylvania or New Jersey and make whatever terms I am able. It is only when a policeman comes alone and says I can't trade that I get Protection. If I desire to trade with a Canadian not only must I give him one horse for his mules, but I must give the Government another. What do they want of that other horse? They want to put him in the Treasury vaults or else compel me to go over into Pennsylvania and sell to someone, Carnegie for instance, who demands a horse and three-quarters for a couple of mules. [Laughter and applause.] But this man doesn't want the extra three-quarters to divide among his men who raise mules, unless they are organized and strong enough to make him. The employer always gets the bonus, and divides with his employes — when he thinks best. Workingmen are getting sick of being fooled about this notion that the Tariff gives them higher wages. Some, however, are afraid that shops will be closed and that foreign goods will run us out of the market. How can we buy foreign goods unless we have our own goods to exchange for them. This shop closing story is another great fraud. The truth is the monopolists have a soft thing, and they are going to hold on to it. That is what makes me think of a story. A darky was working at $5 a week for a Protectionist boss. One day he was in great trouble, for he had a dream. He told his employer, that he was dead and had gone to hell. "Well, that's a bad place," was the answer. "Did you see anyone there you knew?'' "Oh yes, lots of them." "Did you see any Protectionists?" "Yes, I did, and every one held a $5 darky between himself and the fire to keep off the heat." Nor do Protectionists like to let go their victims in this world. Every day we buy the necessities of life from whomsoever we please. We give for them the product of our labor, or its equivalent. We don 't want Protection in this trade. We had absolute Protection from outsiders when the Republican blizzard of last March came along and I for one didn't like it. About 3000 years ago the children of Israel were going through the wilderness. God sent quails to them from Heaven. It was all import and no export and almost everybody liked it. Finally Aaron went to Moses and said: "This invasion of quails ought to be stopped. I have an infant industry that must be protected. In short, I have started a little poultry yard." It was no use to put on an ad valorem duty of 100%, as suggested, because the quails had no money value, so it was determined to put on a specific duty of $5 a dozen. I don't wonder that you doubt this story and believe the incidents never happened. Well, the story is not true. Do you know why? Because Moses and Aaron led "the children of Israel through the wilderness, and not Blaine, Harrison or Carnegie. Whenever you tax a product of labor you make that commodity harder to get, but the more you tax land the cheaper it becomes. It is only by abolishing the tax on labor and coming down to a single land tax basis that we accomplish our great purpose. We shall then have cheap goods, cheap land, high wages and free men, for they all go together.
When Henry George rose to speak he was greeted with a thunder roll of applause. When it stopped for want of breath someone who had saved his lungs shouted lustily, "Three cheers for Henry George." They were given. "Three cheers for the 68,000" were called for, but failed, because the great single tax advocate had begun to speak. Mr. George said:
The gentleman says "Three cheers for the 68,000." He means the men who voted for me two years ago when I ran for Mayor of New York City. I ran as a candidate then for the purpose of introducing into our politics a principle. I ran because I believe it is only by political action and through political action that the emancipation of labor can be secured. For the very same reason that I was a candidate two years ago, from my belief in and my love for these same principles, I stand here to advocate the election of Grover Cleveland.
At the mention of the President's name there was a great roar of applause, beginning not gradually, but at its full volume, the instant the speaker had spoken the name. The cheering continued for more than a minute. Mr. George then continued:
I told you then that we needed the formation of no new party, but the revival of that party of the people which Thomas Jefferson called Republican and Andrew Jackson called Democrat, that party of equal rights that represents the true idea of a government for the people by the people. I never dreamed two years ago that I would now be standing here advocating the election of a Democratic candidate. I had not the confidence in the party that would allow me to believe that they could have given me the opportunity I now possess. Thanks to Grover Cleveland the Democratic party in this national contest again has raised the standard of Jeffersonian Democracy, timidly, it is true, falteringly. Only a 7% move. But we hail it as a beginning. We are for that 7%. Not for that alone, but because we know this movement, once started, can never be stopped. I trust my friend, the previous speaker, will live long enough to see the full consummation of his wishes. If he lives to three score years and ten I have faith by that time we will have swept all Tariff away. I have faith in that because I have faith in the American people. A fair discussion will bring death to Protection. The American people are nobody's fool. Protection is repugnant to the genius of American institutions. It existed in Europe before it was borrowed by us. It is an old scheme of monarchy and aristocracy. Free Trade is as much a right of the people as free speech. Protection should indeed be called coercion. We don't want Protection. The American idea is that each should support the church that pleases him best. No state church. Apply this to trade. Why should not those who believe in Protection take up a voluntary subscription for the infant industries? That would leave us all free men. Mr. McKinley said in this hall, so I am told, that Protection does not raise prices. If that is true, what does anyone want Protection for? The whole end and aim of Protection is to raise prices. When. I was a boy it was, indeed, Protection to infant industries. They ceased to talk about that later on. It used to be, a good while ago, Protection to American capitalists. But that, also, is of the past. Now it is Protection to labor. How they do love the laborer, these good monopolists, such as Andrew Carnegie! How does labor get this vaunted Protection? It doesn't get it. It goes to the employing producer. It is only when by some combination, trust or monopoly by which domestic as well as foreign competition is choked off that Protection yields its full value of protection — to the monopolist. It is not the profit his employer is making that fixes a man's wages. Not at all. It is the price at which the employer can get a man to take the workman's place. It is in the protected industries of our country that laborers have had to fight most and make the greatest efforts to escape being crushed to the wall. But I believe that now a spirit of self respect is awakened among American workingmen. Think of it. Is labor such a poor, helpless thing that it must have protection? Are the American people so inferior to the rest of the world that the industry of 60,000,000 people is to be jeopardized by the law of the British lion unless he is kept at bay by men in buttons? Trusts need protection but labor can protect itself if you only sweep away restrictions and give it a chance. This campaign is the opening of a discussion of all economic questions. The appeal of intelligence will not stop here. We have started on the road to freedom and I have sufficient faith in my countrymen to think that we will not stop till we reach the goal: till we have swept away every tax that deprives the worker of the fair result ot his work. We will make our one direct tax the means of breaking down monopoly. Every tax on the products of labor diminishes their amount. It is the same way with a tax on imports, which tends to lessen the aggregate amount of wealth there is for all and brings to some too much and to others too little. A tax on products requires more capital for carrying on the business. Indirect taxes were never objected to by the first person who paid them. Why were match manufacturers anxious to have the tax kept on? Because as in every other case the price was increased and the man with large capital had an advantage over the man with small. Under that scheme the man who begins as a laborer shall remain one. But there is a tax that takes from no one anything that is due him from his industry — that is the tax on land values. [Long continued applause.] The value of land differs essentially from that of anything produced by labor. This house has a value representing the labor required to put it up and the materials used. With the land on which the house stands the case is very different. That was not produced by labor. Yet the value of the land is ever increasing and that of the building decreasing. The increased value of the land has been produced not by industry, but by the number of people around here. It has been produced by the whole community, belongs to the whole community, and is therefore the proper basis for tax. Instead of promoting monopoly by our plan we are diminishing and destroying it, and we are making it harder for dogs in the manger to hold land that they cannot use. This is the absolute Free Trade at which we single tax men aim. We do not support Grover Cleveland because we imagine that he aims at any kind of Free Trade, nor because we imagine that the Democratic party favors it. But we support Grover Cleveland [cheers and applause] because this is the direction in which he is leading. We stand with the Democratic party because at last its face is turned in the right road, and it has only to keep on to become as Democratic as Thomas Jefferson himself. A gentleman said to me tonight as I came into this hall, "There are people in Brooklyn so stupid as to think the Cobden Club is running this campaign. "I am a member of the Cobden Club [great applause] and if they have any money they might send me a little. I am very willing to take it and use it. The only complaint I have is that the Cobden Club doesn't believe in Free Trade. They see what American Free Trade would do to them. In regard to this question I once said to an Englishman: Once our people are started they will never stop as in England. They will go on till Free Trade ultimates in free land and free men. When I was elected an honorary member of the Cobden Club I was very glad to accept as a mark of respect to Richard Cobden [applause], a man who sought to get justice for Ireland, a man who, when aristocratic England was on the side of the States that would break up the Union, saw in our side this light for freedon; the man that wanted to break down barriers that divide nations, to disband armies and unite the world by a fraternal bond of peace. When Gladstone is restored to power and Ireland has the restoration of home rule the movement for the natural and equal rights in land will spring up with power to grow. And this little movement here beginning with a 7% reduction will go on and on. I am proud to have lived to see this time. This is not a struggle for the protection of labor, but for the emancipation of labor; not to give a few monopolists a few more percent profit at the expense or their fellow citizens, but to give to all their full and equal rights of making this a republic worthy of a name, in which there shall be no master and no tramps, no monstrous fortunes or monstrous poverty, a republic in which there shall be room for all and abundance for all.
The Rev. Hugh O. Pentecost was introduced eulogistically by Mr. Shearman. Among other things Mr. Pentecost said:
Your chairman has told you a truth. I do not believe in all the doctrines of Christianity, as perhaps you do not, but I have a perfect belief in the Founder of Christianity. If Jesus of Nazareth were on earth today He would be engaged in this work. This meeting was called under tho auspices of a single text — Cleveland and Thurman Campaign Committee. That is a combination that some in this audience may not understand. If the men who are thus ignorant have recovered from the shock of the recent remarks about Mr. Cobden they can be enlightened by my explanation. What do the single tax men desire? First, the abolition of every form of indirect taxation — the Tariff tax and the Internal Revenue tax. Indirect taxation is sneaking taxation. It sneaks into your house and taxes everything you use without your knowing you are being taxed. It is peculiarly in favor with despots. When a monarch wishes to raise money without disturbance he uses indirect taxation. It is cowardly. A man goes into a store and buys a suit ot clothes. Nothing is said about the tax on them as it is included in their price. Should a "man in buttons" meet you at the door of the clothing store and demand $10 tax of you for the clothes you had bought your indignation would know no bounds. It is easy to overtax the people by indirect taxation. The single tax men are opposed to the tax on products of labor. What we want is not less wealth, but more wealth. Our system keeps men from producing the very thing we stand in need of. It is idiotic. It punishes a man that does just the thing we want him to. Is he going to do the monstrous thing of building a house? We tax every step he takes, every nail and stick he buys. I know a man who wants to build a back kitchen on his house, but daren't do it for fear of the increased assessment. There is probably not a man in this house who is not at least once a year regularly a liar. Men who in church or family are too honorable, to stain their lips with a lie, yet swear to the tax assessor that they do not own certain property which they know they do. Even ministers who go to Europe and make many purchases there sometimes deceive the customs officers. But it is not his fault. A man goes to Europe and buys certain articles, then if he doesn't pay a fine to the Government they are taken away from him. This is on a par with the policy which taxes the most industrious of our people and makes the burden upon the owners of lots, vacant and rapidly rising in price, as light as possible. Any man who cannot see the absurdity of this policy is as blind as a bat. When Grover Cleveland said that "unnecessary taxation is unjust taxation," he told the truth. [Cheers and long continued applause.] We can prove from facts that it is unnecessary to tax the products of labor. We propose to put a tax upon the value or land. We believe in that single tax because it is right, and we never saw any one who could demonstrate that it wasn't right. A man produced this house, therefore it belongs to him. God produced the land; whom, then, does it belong to? [A voice: "God."] You are right: He has never given it away; He has never sold or willed it away. If the transfers cannot be shown we shall hold that it belongs to God. Between the land and the house is the value of land. Did God produce that? No, but the people did, and why does not the land belong to them? The house belongs to the man because he produced it. God produced the land and it belongs to all His children. What we want is for the people to stop the stealing from the man who owns the house and take what belongs to them. When the New York Sun in its wonderful wisdom says [hisses] that all the wealth of the country if divided equally would give but $800 to each inhabitant, don't you see that we want to produce wealth so that it will go around. The only way we can do that is by lessening not increasing the cost of Protection. You may shout again now if you choose for I am going to mention McKinley's name. [Hisses.] He tried to tell an audience in this hall last night that articles were made cheaper by laying on a tax. That is not so, as any one can see, but this is a fact. The more we tax land the cheaper it gets. We want to have land so cheap that when a workingman wants to build a house he will not have to spend his life in saving money to buy the lot. We want also to make it impossible for men to keep land vacant, to let it lie idle doing no one any good and increasing in price simply because more people are living near it each day. This is an increase in value to which no man has exclusive right. After we have got this reform established other reforms will come much easier. It has often been asked how it happens that we work with the Democratic party. I will tell you. Because we want all taxes removed. We want to get rid of the Protective Tariff first, then the revenue tax, till we get down to our single tax. The Democratic party has made a beginning, and that is a great thing to do after all the years of high Protective Tariff talk that has been poured into the ears of the workingmen. They have heard the Protection side of the story till they have begun to think that it must be true. Perhaps the truth has been impressed upon them more forcibly and terribly. A story is told of an Englishman who had been stopping at a hotel in the far West, and who finally asked for his bill. "Three dollars without potatoes, $4 with," was the reply. The Englishman said he thought the charges were exorbitant and growled considerably. Pulling a big pistol from his pocket the landlord told his guest to look out of the window. "Do you see that graveyard?" he inquired. Well, that place is filled with men who thought my charges were too high. What do you think now?" The Englishman expressed himself as very satisfied. So the American workingman is "satisfied" with the High Tariff robbery of the manufacturers, only, in this latter case the pistol is starvation which affects not himself alone, but wife and little ones. No wonder that under such circumstances the bosses' view has been the laborer's. You know what a fetish is? A savage worships in his cave. Every time he comes back from a hunt, fish, or fight successful he gives that miserable fetish all the credit. All his bad luck he attributes to other causes. As the savage grows more intelligent he drops his fetish. The Tariff is the fetish of the Protectionist. Just at this time Mr. Blaine is its great high priest and Benjamin and Levi are altar boys. All our fine weather, plentiful crops and beautiful women are due to the Tariff. I sometimes think that the old hymn should read as follows:
"Tis Protection that can give
Sweetest pleasures while we live; Tis Protection that can give Solid comfort when we die.
The rhyme is not just right, but I think you see the meaning. Like the Indian, the Protectionist doest not blame his fetish for the growling growing discontent in the ranks of labor, this dark shadow on the land. There are people who believe every good comes from Protection and every bad from some other causes. Just when this superstition was at its height Grover Cleveland walked into the temple. He did not quite dare to strike down the miserable fetish, but he slapped its face and said to the congregation; This thing you worship is a humbug." We honor him because of this, and because he brought on this great discussion that will not end until we have Free Trade in goods, free travel for men and free land for labor.
After Mr. Pentecost's speech half of the audience remained to hear Mr. George and the other speakers answer questions.
35. He worked hard. He played by the rules. He bought up land before the interstate highway was announced, and his widow and orphans now have a very valuable land portfolio, for which others will pay a high purchase price or high lease prices for generations. Is it right to exact an estate tax of 50% or so on the true market value of that estate?
A. No! Widows and orphans must be protected! We wouldn't want them to have to depend on the social safety net.
B. No! The dollars he spent to buy that land decades ago were already subject to an income tax -- maybe two (federal and state) -- and the heirs are entitled to keep all the increase from the purchase price, even if that is a 20% increase, or a 200% increase, or a 2000% increase, over the purchase price.
C. No! The man had foresight, and we ought to honor, reward and encourage that!
D. No! The interstate highway could have been re-routed, and the man and his widow and children could have been left high and dry. They took a risk, and we ought to reward them for their brilliance!
E. An estate tax is a good way to capture this socially-created windfall once per generation. After all, he can't take it with him. Half for the heirs, half for the community that created the value. Seems fair, and keeps them out of the social safety net.
F. An estate tax is better than nothing, but it is a poor alternative to collecting some significant portion of the rental value of the land, month in and month out, whether that rental value be low (before the interstate highway's route is determined) or high (after it is announced and built, and the community grows up around that highway).
36. He worked hard. He played by the rules. He bought up land before the interstate highway was announced, and his widow and orphans now have a very valuable land portfolio, for which others will pay a high purchase price or high -- and rising -- lease prices, for generations. Is it right to change our tax code to tax -- heavily -- year in and year out, the economic value of that land?
Does the Single Tax discriminate between earned and unearned income?
It is the scientific way of doing what we have been feebly attempting to do in an unscientific way, that is, to distinguish between what Dr. Scott Nearing called "property income" and "services income," or between that form of wealth which is the result of individual effort in production and that which is purely the result of the collective effort of society; or between the two forms of wealth which Dr. Ellwood, of the University of Missouri, in a seemingly unwilling recognition of an unwelcome truth, calls "earnings" and "findings."
In the case of the great majority of us (whether as individuals or as partners in corporations) our incomes are so inextricably compounded of earnings and findings, of privilege income and service income, that it is hard for some of us to know whether we belong to the privileged or unprivileged classes, to the slave owners or the slaves, to the confiscators or the victims; and perhaps only those absolutely property less men at the bottom of the social scale can be said to have no share in the "findings" that spring from privilege. On the other hand it is equally true that all industry up to its highest strata, has to pay toll to privilege and provide those "findings" which distribute themselves with more or less inequality over almost the whole of society. How to distinguish between and separate these entirely different kinds of wealth is what all sincere sociologists and honest taxation commissioners have wanted to do and have hitherto failed in the doing.
If we take a handful of sand and a handful of iron filings and mix them thoroughly, and then set a man with the sharpest eyesight and the nimblest fingers to separate the particles, it will take him long to accomplish his task and he will never do it with more than an approximation to completeness. But apply a strong magnet to the mixture and the separation will be accomplished in ten minutes. Then see how the analogy applies to the economic problem in society. Let us imagine the return that should naturally flow to land in the form of rent to take the shape of blue coins made of steel. Let us fancy that the natural reward that goes to capital as interest takes the form of red coins made of wood. Finally let us figure the natural return to human service of all grades as being represented by white coins also made of wood. On examination it will be discovered that in the case of almost every member of society above the rank of the day laborer, his income is tri-colored or composed of all three coins. There are countless "captains of industry" among us who complacently assume their large incomes to be the rewards freely given by a free world in return for their invaluable services, who will be surprised to find how large a proportion of blue their income coins contain. There are multitudes of livers upon what they have called "interest" who will expect to find their coins red, who will be equally surprised to discover that they are almost entirely blue. To complete the parable, the taxation of land values will be like the application of the magnet which will draw away the blue steel coins in whatever stratum of society they may be found, and lay them aside for social purposes, being socially created wealth; leaving the red and white coins to be competed for in a world of free opportunity, without deduction or diminution by taxation or in any other way.
27. A new subway line costs $2 billion. Suppose that its construction increases the surrounding land values by $2 billion. (Assume 5 miles long, 10 stations, 0.5 mile radius, average lot size of 0.10 acre. How should the new subway line be financed?
A. Taxes on sales of groceries, clothing, etc. within those 1/2 mile radius areas
B. Taxes on sales of groceries, clothing, etc., all over the city the subway line connects to
C. Taxes on sales of services within those 1/2 mile radius areas
D. Taxes on sales of services of all kinds, all over the city the subway line connects to
E. Taxes on wages of those working in those 1/2 mile radius areas
F. Taxes on wages all over the city the subway line connects to
G. Taxes on wages of those living within the 1/2 mile radius areas
H. Taxes on capital gains and dividends of those living within the 1/2 mile radius areas
I. Taxes on capital gains and dividends of those with residence anywhere in the city
J. Taxes on all real estate within those 1/2 mile radius areas
K. Taxes on all real estate, all over the city the subway line connects to
L. Taxes on just the buildings within those 1/2 mile radius areas
M. Taxes on all the buildings, all over the city the subway line connects to
N. Taxes on the land value within those 1/2 mile radius areas
O. Taxes on the land value, all over the city the subway line connects to
P. Transfer taxes on either or both of buyers and sellers whenever a property within the 1/2 mile radius is sold
Q. Transfer taxes on either or both of buyers and sellers whenever a property anywhere within the city is sold
R. An inheritance tax when a house or commercial property is transferred from a decedent to a survivor.
23. Fares on local public transportation may not be high enough to finance all the costs of providing the transportation. Does that mean that it is a poor investment, or are there other logical and just ways of funding it?
The taxation of all property at a uniform rate is made necessary by the constitutions of about three-fourths of the States of the Union. The taxes on chattels, tools, implements, money, credits, etc., find their condemnation from the Single Taxer's point of view in those ethical considerations which differentiate private from public property. Where there arises a fund known as "land values," growing with the growth of the community and the need of public improvements, it is not only impolitic, it is a violation of the rights of property to tax individual earnings for public expenses.
The value of land is the day-to-day product of the presence and communal activity of the people. It is not a creation of the title-holder and should not be placed in the category of property. If population deserts a town or portions of a town, the value of land will fall; the land may become unsalable. When treated as private property the owner of land receives from day-to-day in ground rent a gift from the community; and justice requires that he should pay taxes to the community proportionate to that gift.
"Land value" or "ground rent" as the older economists termed it, is a tribute which economic law levies upon every occupant of land, however fleeting his stay, as the market price of all the advantages, natural and social, appertaining to that land, including necessarily his just share of the cost of government.
21. The creation of a new subway line raises the land values near each of the stations. Who should pay for the building of the subway line?
A. Riders of the new subway line
B. Riders of all subways in the system.
C. Riders of all mass transit in the metro area.
D. Drivers of cars and trucks, all over the metro area, via taxes on their fuel purchases (that is, in proportion to miles driven and the fuel efficiency of their vehicles)
E. Drivers of cars and trucks, all over the metro area, via an annual surcharge on their registration
F. Drivers of cars and trucks, all over the metro area, in proportion to the value of their cars, owned or leased
G. Drivers of cars and trucks, via tolls when they use bridges and tunnels, or HOV lanes, or certain highways
G. The taxpayers, via increased sales taxes on their purchases
H. The tourists and business travelers, via hotel occupancy taxes and taxes on rental cars.
I. Passengers in taxis, via a surcharge on their fares.
J. The homeowners, via taxes on their homes
K. Drivers, commercial and individual, via taxes on fuel purchased within the city
L. Employees all over the metro area, via a payroll tax
M. The tenants of commercial buildings in the heart of the central business district
N. All landholders, paying equally (a parcel tax)
O. All landholders, in proportion to the size of their lots
P. Landholders, in proportion to the value of the land they hold, without regard to the buildings or their contents. Those whose land values are raised by their proximity to the new line will see a proportional increase in their share of the tax burden; those far from the new line will not.
19. Storms continue to erode the resort beaches up and down our coasts. Who should pay for beach restoration every few years?
A. The federal government, from income tax revenues. (why?)
B. Taxes on pollution should be used to pay for this, on the basis that pollution produces the climatic conditions that make storms slower moving and more destructive.
C. State governments along the coasts.
D. Local governments, town by town, paid for by sales taxes.
E. County governments along the coasts.
F. Local governments, town by town, paid for by taxing wages.
G. Local governments, town by town, paid for by summer parking revenue, hotel bill taxes and taxes on rental properties' revenue;
H. Local governments, town by town, paid for by property taxes, taxing both buildings and land, in proportion to current market value
I. Local governments, town by town, paid for by land value taxation. Land values close to the beaches rise and fall with the sand, and properties further from the beaches are far less effected by the presence/absence of beach sand than those near the beaches.
J. Local governments, town by town, paid for by transfer taxes on sold properties, so as not to burden long-time owners who aren't selling.
I came across this rather good letter to the editor, from 1938. (Trinity Church Corporation, a major landlord in downtown Manhattan, was the subject of a NYT article this past week, as well as the subject of a major series in the NYT in December, 1894):
1938-09-03 Letters to The Times
Collecting Ground Rent Single-Tax System Regarded as No Detriment to Building
TO THE EDITOR OF THE NEW YORK TIMES:
Fabian Franklin, in his letter to THE TIMES discussing the demolition of John D. Rockefeller's Harlem tenements in order to save taxes, writes:
"That objection is simply that virtual abolition of land ownership, which the single-tax plan is designed to effect, would make the building of houses in a city an extra-hazardous business, because, under the single-tax regime, in the great majority of cases the investment would result in a disastrous loss to the owner of the building. I was neither blaming nor praising Mr. Rockefeller for the demolition of Harlem tenements."
What is the so-called single-tax system? It is the collection by the government, through the taxing officials, of the entire economic or ground rent of land and the repeal of all taxes on buildings and other products of labor and capital. That ground rent is estimated to be 9% of the capital value of the land. New York City is now collecting one-third of this ground rent. The market value of the lots is the remaining two-thirds, capitalized. Dr. Franklin's thesis is that if the entire ground rent is collected no one would erect buildings, because "in the great majority of cases the investment would result in a disastrous loss to the owner of the building."
Some of the finest buildings in New York City are erected on leased land and the lessee pays the ground rent 100% besides a tax on the building. There are hundreds of buildings erected by lessees of lots owned by Trinity Church, Astor estate, Rhinelander estate, Sailors Snug Harbor and others. The lessees must pay all the taxes, both on land and building, amounting to 3% of the assessed value of both, and to the landlord 6% of the market value of the land.
Thus the entire ground rent is paid by the lessee, but only one-third to the government representing the people who made that value by their presence and activities, the remaining two-thirds to the landlord. Notwithstanding that they are thus obliged to pay 100% of the economic rent, bankers and business men erect buildings costing millions. Under the Henry George plan they would have to pay less, for the taxes on these costly structures will have been repealed.
Perhaps if Mr. Rockefeller had not been obliged to pay taxes on the buildings he might not have pulled them down; or, if he had, would have erected better buildings in their place in order to get a return on his investment in buildings. The ones who will benefit most from the adoption of the Georgian philosophy are the owners of humble homes. The average small homeowner's house is assessed for at least twice the assessed value of the lot. If the house is relieved from taxation and the lot taxed the entire ground rent, his tax will be less than it is now. The difference will be made up from vacant lots and lots that are worth more than the improvements.
After all, the building of houses is like any other business. The builder takes the risk of lessened demand because of changes in fashion, obsolescence, competition. It is estimated that 95% of new businesses ultimately fail. With the adoption, however, of the philosophy of Henry George, commonly called the single tax, failures in the housing and other businesses will be much fewer. This is because neither houses nor goods nor anything else will be taxed. The collection of the entire ground rent will not lessen the area of the surface of the earth one inch. On the contrary, it will open to occupation and use land that is now held for speculation purposes.
The taxation of any product of labor and capital will add the amount of the tax to the price, lessen demand and thus curtail production. The result is unemployment and misery.
Frederic Cyrus Leubuscher Essex Fells, N. J., Aug. 31, 1938
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?)
David Brooks suggested in a recent column that the country needs a national service program to unite the diverging classes in society. He’s right.
Not long ago, we had one that did so very well. It was the draft. Every young man — regrettably, only men — shared a potential obligation to his country.
Any serious discussion of comprehensive national service means talking about a draft. It’s hard to imagine the Supreme Court upholding nondefense conscription, but if civilian service were an alternative to military duty, the prospects would improve.
The all-volunteer military is exemplary for its professionalism, sacrifice, meritocracy and diversity. (I have a son with two college degrees who enlisted.) But the benefits and burdens need to be shared more widely. There have been too many multiple deployments of regulars and reserves, and if draftees were in the mix once again, perhaps there would be no more wars of choice.
Many domestic needs could be served by a comprehensive national service program. Like the Depression’s best idea, the Civilian Conservation Corps, it could involve people from all classes in repairing our parks, roads, bridges and other infrastructure. It could also bring fresh ideas and talent to teaching, law enforcement, social work and other underpaid public services. The benefits to our national character, as Mr. Brooks suggests, would be immense.
There are past and present models of a national service program in more than a dozen other nations. It is time we gave it a try.
MARTIN A. DYCKMAN Waynesville, N.C., Feb. 14, 2012 The writer is a retired associate editor and columnist for The St. Petersburg Times.
Editors’ Note: We invite readers to respond to this letter for our Sunday Dialogue. We plan to publish responses and Mr. Dyckman’s rejoinder in the Sunday Review. E-mail: email@example.com
LVTfan's observation: Every investment in improved infrastructure creates land value. Most projects that have value -- education, law enforcement, social work, improved public health -- will also increase land value.
A project is, by definition, worthwhile if it creates more in land value than it costs to do,* and, it could be argued that, when comparing two infrastructure projects that cost the same amount, say, $100 million, if one creates $200 million in land value and the other creates merely $150 million in incremental land value, the $200 million project should probably take priority, all other things being equal.
*which isn't to say that many public spending projects which don't create increased land value aren't worthwhile, too, for other reasons.
Pork barrel is the appropriation of government spending for localized projects secured solely or primarily to bring money to a representative's district. The usage originated in American English. In election campaigns, the term is used in derogatory fashion to attack opponents. Scholars, however, use it as a technical term regarding legislative control of local appropriations.
The term pork barrel politics usually refers to spending that is intended to benefit constituents of a politician in return for their political support, either in the form of campaign contributions or votes. In the popular 1863 story "The Children of the Public", Edward Everett Hale used the term pork barrel as a homely metaphor for any form of public spending to the citizenry. After the American Civil War, however, the term came to be used in a derogatory sense. The Oxford English Dictionary dates the modern sense of the term from 1873. By the 1870s, references to "pork" were common in Congress, and the term was further popularized by a 1919 article by Chester Collins Maxey in the National Municipal Review, which reported on certain legislative acts known to members of Congress as "pork barrel bills". He claimed that the phrase originated in a pre-Civil War practice of giving slaves a barrel of salt pork as a reward and requiring them to compete among themselves to get their share of the handout. More generally, a barrel of salt pork was a common larder item in 19th century households, and could be used as a measure of the family's financial well-being. For example, in his 1845 novel The Chainbearer, James Fenimore Cooper wrote, "I hold a family to be in a desperate way, when the mother can see the bottom of the pork barrel."
Typically, "pork" involves funding for government programs whose economic or service benefits are concentrated in a particular area but whose costs are spread among all taxpayers. Public works projects, certain national defense spending projects, and agricultural subsidies are the most commonly cited examples.
Greatly exceeds the President’s budget request or the previous year’s funding;
Not the subject of congressional hearings; or
Serves only a local or special interest.
The last of these seems as if it might be the most important one.
So here's the question: How should we finance these projects, if they are to be done? How would we pay for a modern CCC? (Ah -- this sounds like The Land Questions ...)
A. By a local tax on land value. This would necessitate regular reassessment of the land value in every community in America, say, every 3 years, which could be done for well under $40 per parcel. It would probably also require some state and/or federal oversight, checking values against transactions to verify that all municipalities or assessing units are doing high-quality market-based assessments. [In Maryland, they're already doing assessments every 3 years. In Connecticut, assessments every 4 years are required. In southern Delaware, the assessments are 30+ years old. In California, the assessments are meaningless, due to Proposition 13. It would take a few years for some of these entities to update their assessments.]
B. By a state tax on land value. [same issues apply]
C. By a national tax on land value.
D. Let's just use the federal income tax. It's there. It's easy.
E. Let's use a national sales tax.
F. Let's use a tax on imports.
G. Let's tax buildings.
H. Let's tax services.
It seems to me that a national service corps of some sort has a lot of merit. It could promote a lot of highly desirable goals. It could provide a lot of home-front protection in the event of natural disasters. It could get some important projects done, including the maintenance of existing infrastructure currently under-maintained,and the provision of services we believe are important (particularly when we are the beneficiaries).
But the financial benefits ought not to fall into private or corporate pockets; they ought to accrue to all of us, and ease the burdens of financing other kinds of federal spending. Land value taxation strikes me as the answer to so many of our supposedly intractible problems.