They said also that this king divided the country amongst all the Egyptians and from thence he drew his revenues, having required them to pay a fixed tax every year.
—Herodotus, Euterpe, II, 109.
They said also that this king divided the country amongst all the Egyptians and from thence he drew his revenues, having required them to pay a fixed tax every year.
—Herodotus, Euterpe, II, 109.
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.
Posted on December 30, 2012 at 12:33 AM in Christian ethics, commons, commonwealth, Earth for All, equal opportunity, financing education, financing infrastructure, financing services, fixing the economy, free land, government's role, justice of the single tax, land rent, land value taxation, make land common property, Natural Public Revenue, natural resource revenues, rent, defined, untaxing production | Permalink | Comments (0)
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I stumbled across an excerpt from this in The American Cooperator, and when I couldn't find the material in any of George's other books, I went looking for the source, an 1887 book with chapters by 16 authors.
Enjoy! (It prints out as about 9 pages, if you're so inclined)
MAGNITUDE OF THE QUESTION — FIRST PRINCIPLES — THE LAND-OWNER THE ABSOLUTE MASTER OF MEN WHO MUST LIVE ON HIS LAND — THE ORDER OF NATURE INVERTED — EQUAL RIGHTS TO THE USE OF THE EARTH — SELFISHNESS, THE EVIL GENIUS OF MAN — THE IRISH PEOPLE FORCED TO BEG PERMISSION TO TILL THE SOIL — APPROPRIATION OF THE CHURCH-LANDS — LAND IN ITSELF HAS NO VALUE — THE GREAT CAUSE OF THE UNEQUAL DISTRIBUTION OF WEALTH — NO HOPE FOR THE LABORER, SO LONG AS PRIVATE PROPERTY IN LAND EXISTS — NOTHING MYSTERIOUS ABOUT THE LABOR QUESTION — THE DIFFICULTY IN FINDING EMPLOYMENT — NATURE OFFERS FREELY TO LABOR — NATURAL MEANS OF EMPLOYMENT MONOPOLIZED — SPECULATION IN THE BOUNTIES OF NATURE.
Posted on December 19, 2012 at 06:29 PM in a wedge driven through society, absentee ownership, all benefits go to landholder , Earth for All, equality, fruits of one's labors, Henry George, land speculation, landlordism, make land common property, Natural Public Revenue, overproduction, population, population growth, private property in land, privilege, reaping what others sow, rent, defined, rent-seeking, sharecropping, slavery, special interests, supply and demand, technological advances, the land question, toll-takers, underused land, unearned increment, unemployment and underemployment, wages driven down, wealth distribution or concentration | Permalink | Comments (2)
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A major theme of the underlying political debate in the United States is the role of the state and the need for collective action. The private sector, while central in a modern economy, cannot ensure its success alone. For example, the financial crisis that began in 2008 demonstrated the need for adequate regulation.
Moreover, beyond effective regulation (including ensuring a level playing field for competition), modern economies are founded on technological innovation, which in turn presupposes basic research funded by government. This is an example of a public good – things from which we all benefit, but that would be undersupplied (or not supplied at all) were we to rely on the private sector.
Conservative politicians in the US underestimate the importance of publicly provided education, technology, and infrastructure. Economies in which government provides these public goods perform far better than those in which it does not.
But public goods must be paid for, and it is imperative that everyone pays their fair share. While there may be disagreement about what that entails, those at the top of the income distribution who pay 15% of their reported income (money accruing in tax shelters in the Cayman Islands and other tax havens may not be reported to US authorities) clearly are not paying their fair share. ...
I have to disagree with the second sentence of this next paragraph. And I think Stiglitz knows better, if he stops to think about it:
Democracies rely on a spirit of trust and cooperation in paying taxes. If every individual devoted as much energy and resources as the rich do to avoiding their fair share of taxes, the tax system either would collapse, or would have to be replaced by a far more intrusive and coercive scheme. Both alternatives are unacceptable.
The billionaire investor Warren Buffett argues that he should pay only the taxes that he must, but that there is something fundamentally wrong with a system that taxes his income at a lower rate than his secretary is required to pay. He is right. Romney might be forgiven were he to take a similar position. Indeed, it might be a Nixon-in-China moment: a wealthy politician at the pinnacle of power advocating higher taxes for the rich could change the course of history.
But Romney has not chosen to do so. He evidently does not recognize that a system that taxes speculation at a lower rate than hard work distorts the economy. Indeed, much of the money that accrues to those at the top is what economists call rents, which arise not from increasing the size of the economic pie, but from grabbing a larger slice of the existing pie.
Those at the top include a disproportionate number of monopolists who increase their income by restricting production and engaging in anti-competitive practices; CEOs who exploit deficiencies in corporate-governance laws to grab a larger share of corporate revenues for themselves (leaving less for workers); and bankers who have engaged in predatory lending and abusive credit-card practices (often targeting poor and middle-class households). It is perhaps no accident that rent-seeking and inequality have increased as top tax rates have fallen, regulations have been eviscerated, and enforcement of existing rules has been weakened: the opportunity and returns from rent-seeking have increased.
Today, a deficiency of aggregate demand afflicts almost all advanced countries, leading to high unemployment, lower wages, greater inequality, and – coming full, vicious circle – constrained consumption. There is now a growing recognition of the link between inequality and economic instability and weakness.
There is another vicious circle: Economic inequality translates into political inequality, which in turn reinforces the former, including through a tax system that allows people like Romney – who insists that he has been subject to an income-tax rate of “at least 13%” for the last ten years – not to pay their fair share. The resulting economic inequality – a result of politics as much as market forces – contributes to today’s overall economic weakness.
Posted on September 04, 2012 at 09:58 AM in common good, commons, cui bono?, economic rent, ecosystem services, financing education, financing health care, financing infrastructure, financing services, financing Social Security, FIRE sector, fixing the economy, government's role, highest salaries, income concentration, infrastructure, land includes, land rent, land value created by community, money in elections, Natural Public Revenue, natural resource revenues, natural resources, political economy, popular ignorance of land economics, privatization, privilege, public spending, reaping what others sow, rent, defined, rent-seeking, socializing risk and privatizing profit, special interests, Stiglitz, tax reform, time making wrongs into rights, toll-takers, unearned income, urban land value, wealth distribution or concentration | Permalink | Comments (0)
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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
(American Edition of 1895).
Posted on August 05, 2012 at 06:56 PM in direct taxation, Earth for All, economic rent, fixing the economy, free land, justice of the single tax, land rent, land value taxation, location, location, location, Natural Public Revenue, natural resource revenues, no victims, pay for what you take, rent, defined, rent-seeking, unburdening the economy, unearned increment | Permalink | Comments (0)
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The wood of the forest, the grass of the field, and all the natural fruits of the earth, which when land was in common, cost the laborer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them. He must then pay for the license to gather them, and must give up to the landlord a portion of what his labor either collects or produces. This portion, or what comes to the same thing, the price of this portion, constitutes the rent of the land.
— ADAM SMITH, The Wealth of Nations, Book I., Chap. 6.
"High rent is the best manure ever land got."
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.
Posted on July 04, 2012 at 12:34 PM in a Manhattan acre, all benefits go to landholder , better cities, cui bono?, direct taxation, economic rent, equal freedom, equal opportunity, equality, facilitating commerce, financing education, financing infrastructure, financing services, fixing the economy, free land, infrastructure, is this socialism?, land value created by community, land value taxation, location, location, location, make land common property, Natural Public Revenue, paying twice, popular ignorance of land economics, population growth, private property in land, public spending, rent, defined, rent-seeking, sharecropping, slavery, sprawl, underused land, unemployment and underemployment, untaxing buildings, untaxing production, urban land value | Permalink | Comments (0)
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"The rent of land and government expenses are both caused by population. Let one pay the other."
--Henry Chase, M. D.
Posted on June 28, 2012 at 06:45 PM in better cities, direct taxation, economic rent, financing education, financing infrastructure, financing services, fixing the economy, government's role, immigration, justice of the single tax, land rent, land value created by community, land value taxation, location, location, location, Natural Public Revenue, one solution for many problems, population, population growth, public spending, rent, defined, socializing risk and privatizing profit, tax reform, taxation, teach your children well, urban land value | Permalink | Comments (0)
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This excerpt makes some important points about a number of topics this blog focuses on:
I look forward to reading the book. I'll be curious to see whether Professor Stiglitz gets into what we can do via reforming our tax system to reduce the amount of rent that is available for private and corporate rent-seekers. Treat rent as our COMMON asset... Natural Public Revenue!! Don't leave it there for corporations to privatize.
It is no accident that the periods in which the broadest cross sections of Americans have reported higher net incomes — when inequality has been reduced, partly as a result of progressive taxation — have been the periods in which the U.S. economy has grown the fastest. It is likewise no accident that the current recession, like the Great Depression, was preceded by large increases in inequality. When too much money is concentrated at the top of society, spending by the average American is necessarily reduced — or at least it will be in the absence of some artificial prop. Moving money from the bottom to the top lowers consumption because higher-income individuals consume, as a fraction of their income, less than lower-income individuals do.
In our imaginations, it doesn’t always seem as if this is the case, because spending by the wealthy is so conspicuous. Just look at the color photographs in the back pages of the weekend Wall Street Journal of houses for sale. But the phenomenon makes sense when you do the math. Consider someone like Mitt Romney, whose income in 2010 was $21.7 million. Even if Romney chose to live a much more indulgent lifestyle, he would spend only a fraction of that sum in a typical year to support himself and his wife in their several homes. But take the same amount of money and divide it among 500 people — say, in the form of jobs paying $43,400 apiece — and you’ll find that almost all of the money gets spent.
The relationship is straightforward and ironclad: as more money becomes concentrated at the top, aggregate demand goes into a decline. Unless something else happens by way of intervention, total demand in the economy will be less than what the economy is capable of supplying — and that means that there will be growing unemployment, which will dampen demand even further. In the 1990s that “something else” was the tech bubble. In the first decade of the 21st century, it was the housing bubble. Today, the only recourse, amid deep recession, is government spending — which is exactly what those at the top are now hoping to curb.
The “Rent Seeking” Problem
Here I need to resort to a bit of economic jargon. The word “rent” was originally used, and still is, to describe what someone received for the use of a piece of his land — it’s the return obtained by virtue of ownership, and not because of anything one actually does or produces. This stands in contrast to “wages,” for example, which connotes compensation for the labor that workers provide. The term “rent” was eventually extended to include monopoly profits — the income that one receives simply from the control of a monopoly. In time, the meaning was expanded still further to include the returns on other kinds of ownership claims. If the government gave a company the exclusive right to import a certain amount of a certain good, such as sugar, then the extra return was called a “quota rent.” The acquisition of rights to mine or drill produces a form of rent. So does preferential tax treatment for special interests. In a broad sense, “rent seeking” defines many of the ways by which our current political process helps the rich at the expense of everyone else, including
- transfers and subsidies from the government,
- laws that make the marketplace less competitive,
- laws that allow C.E.O.’s to take a disproportionate share of corporate revenue (though Dodd-Frank has made matters better by requiring a non-binding shareholder vote on compensation at least once every three years), and
- laws that permit corporations to make profits as they degrade the environment.
The magnitude of “rent seeking” in our economy, while hard to quantify, is clearly enormous. Individuals and corporations that excel at rent seeking are handsomely rewarded. The financial industry, which now largely functions as a market in speculation rather than a tool for promoting true economic productivity, is the rent-seeking sector par excellence. Rent seeking goes beyond speculation. The financial sector also gets rents out of its domination of the means of payment — the exorbitant credit- and debit-card fees and also the less well-known fees charged to merchants and passed on, eventually, to consumers. The money it siphons from poor and middle-class Americans through predatory lending practices can be thought of as rents. In recent years, the financial sector has accounted for some 40 percent of all corporate profits. This does not mean that its social contribution sneaks into the plus column, or comes even close. The crisis showed how it could wreak havoc on the economy. In a rent-seeking economy such as ours has become, private returns and social returns are badly out of whack.
In their simplest form, rents are nothing more than re-distributions from one part of society to the rent seekers. Much of the inequality in our economy has been the result of rent seeking, because, to a significant degree, rent seeking re-distributes money from those at the bottom to those at the top.
But there is a broader economic consequence: the fight to acquire rents is at best a zero-sum activity. Rent seeking makes nothing grow. Efforts are directed toward getting a larger share of the pie rather than increasing the size of the pie. But it’s worse than that: rent seeking distorts resource allocations and makes the economy weaker. It is a centripetal force: the rewards of rent seeking become so outsize that more and more energy is directed toward it, at the expense of everything else. Countries rich in natural resources are infamous for rent-seeking activities. It’s far easier to get rich in these places by getting access to resources at favorable terms than by producing goods or services that benefit people and increase productivity. That’s why these economies have done so badly, in spite of their seeming wealth. It’s easy to scoff and say: We’re not Nigeria, we’re not Congo. But the rent-seeking dynamic is the same.
LVTfan here: Think what would happen if we SOCIALIZED rents, and substituted them as our revenue source for all the taxes we pay ... sales taxes, wage taxes, building taxes, excise taxes ...
Recall what Leona Helmsley told us: "WE don't pay taxes. The little people pay taxes." Think what a weight would be lifted off our economy if those taxes were taken off the produces of labor, and put onto Rent, in all its forms!
When people remind us, next April, of the so-called "Tax Freedom Day," perhaps it is worth bringing this aspect to their attention. However, few of them will have the economic education to understand what this poem is saying, on a first reading. (Maybe they'll take the time to explore this blog.)
It was Winston Churchill who brought the term "Mother of all Monopolies" to prominence, in a series of speeches he gave in the fall of 1909.
You may tinker with the tariff and make some simple gains,
You may put on tolls or take 'em off, inducing party pains;
You may monkey with the money, but the lack of it remains,
For the Mother of monopoly is laughing as she reigns.
Rent! rent! who is it pays the rent?
A dozen days in every month the worker's back is bent;
Figure it in dollar bills or work it by percent,
But with his dozen days he pays just rent, rent, rent.
You may "minimum" the wages, you may let the women vote,
You may regulate the railroads with a legal antidote,
You may jail some Rockefeller, or may get a Morgan's goat,
But the Mother of Monopoly is laughing in her throat.
Rent! rent! who is it pays the rent?
A hundred days in every year a business profit's spent;
Figure it in "overhead," or state it by percent,
But all your hundred days are gone for rent, rent, rent.
You may institute Foundations, you may educate the dubs,
You may librarize the Bread Line, and establish Slumy Clubs;
You may ostracize the Demon Rum and eugenize the cubs,
But the Mother of Monopoly is smiling at your snubs.
Rent! rent! who is it pays the rent?
A score of years in life you spent to get one document;
From your cradle to your coffin you must bow to its assent,
And that's your little, old receipt for rent, rent, rent.
I look across the rented world and idle land I see,
Whose owner doesn't work it, for he's working you and me,
And on the first of every month all tenants bow the knee,
And pay the rent of vacant land, in great or small degree
Rent! rent! who is it pays the rent?
The worker's hands are busy and the business back is bent;
The idle lands advance in price and every single cent,
Of that advance is paid by us in rent, rent, rent.
The rent which landlords draw from their lands is an income which they derive from the sale of what are avowedly God's gifts which "no man made."
— BISHOP OF MEATH, Letter to Clergy and Laity, April 2, 1881.
Rent is that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil.
— DAVID RICARDO, Principles of Political Economy, Chap. II.
A land-tax, levied in proportion to the rent of land . . . will fall wholly on the landlords.
— DAVID RICARDO, Principles of Political Economy, Chap. X.
A tax on rent falls wholly on the landlord. There are no means by which he can shift the burden upon anyone else.
— JOHN STUART MILL, Elements of Political Economy, Book V., Chap. III., Sec. 2.
It is well known that these materials and agencies, as fast as they become available, are in the main appropriated by individuals, through the agency or consent of the government, and are then held as private property. Such is the case with the soil and the minerals beneath it. The owners of this property charge as much for the use of it as if it were their own creation, and not that of nature.
— PROF. SIMON NEWCOMB, The Labor Question, North American Review, July, 1870, p. 151.
a link and a longer except follow ...
Posted on April 23, 2012 at 12:23 AM in all benefits go to landholder , capital gains are land gains, commons, commonwealth, corruption in government, cui bono?, Earth for All, ecosystem services, environment, government's role, income concentration, is this socialism?, land different from capital, land includes, land speculation, landed gentry, landlordism, leased land, location, location, location, make land common property, monopoly -- not the game, natural resource revenues, natural resources, oil, popular ignorance of land economics, poverty's cause, private property in land, privatization, privilege, property rights, rent, defined, socializing risk and privatizing profit, special interests, time making wrongs into rights, toll-takers, unearned income, wealth distribution or concentration | Permalink | Comments (0)
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This is from Joseph Dana Miller, the editor of the Single Tax Year Book (1917), and it is a concise statement which might help make clear why I think this such an important reform in the 21st century.
Men have a right to land because they cannot live without it and because no man made it. It is a free gift of nature, like air, like sunshine. Men ought not to be compelled to pay other men for its use. It is, if you please, a natural right, because arising out of the nature of man, or if you do not like the term, an equal right, equal in that it should be shared alike. This is no new discovery, for it is lamely and imperfectly recognized by primitive man (in the rude forms of early land communism) and lamely and imperfectly by all civilized communities (in laws of "eminent domain", and similar powers exercised by the State over land). It is recognized by such widely differing minds as Gregory the Great and Thomas Paine (the religious and the rationalistic), Blackstone and Carlyle (the legal and the imaginative). All points of view include more or less dimly this conception of the peculiar nature of land as the inheritance of the human race, and not a proper subject for barter and sale.
This is the philosophy, the principle. The end to be sought is the establishment of the principle -- equal right to land in practice. We cannot divide the land -- that is impossible. We do not need to nationalize it that is, to take it over and rent it out, since this would entail needless difficulty. We could do this, but there is a better method.
The principle, which no man can successfully refute or deny even to himself, having been stated, we come now to the method, the Single Tax, the taking of the annual rent of land -- what it is worth each year for use -- by governmental agency, and the payment out of this fund for those functions which are supported and carried on in common -- maintenance of highways, police and fire protection, public lighting, schools, etc. Now if the value of land were like other values this would not be a good method for the end in view. That is, if a man could take a plot of land as he takes a piece of wood, and fashioning it for use as a commodity give it a value by his labor, there would be no special reason for taxing it at a higher rate than other things, or singling it out from other taxable objects. But land, without the effort of the individual, grows in value with the community's growth, and by what the community does in the way of public improvements. This value of land is a value of community advantage, and the price asked for a piece of land by the owner is the price of community advantage. This advantage may be an excess of production over other and poorer land determined by natural fertility (farm land) or nearness to market or more populous avenues for shopping, or proximity to financial mart, shipping or railroad point (business centers), or because of superior fashionable attractiveness, (residential centers). But all these advantages are social, community-made, not a product of labor, and in the price asked for its sale or use, a manifestation of community-made value. Now in a sense the value of everything may be ascribed to the presence of a community, with an important difference. Land differs in this, that neither in itself nor in its value is it the product of labor, for labor cannot produce more land in answer to demand, but can produce more houses and food and clothing, whence it arises that these things cost less where population is great or increasing, and land is the only thing that costs more.
To tax this land at its true value is to equalize all people-made advantages (which in their manifestation as value attach only to land), and thus secure to every man that equal right to land which has been contended for at the outset of this definition.
From this reform flow many incidental benefits -- greater simplicity of government, greater certainty and economy in taxation, and increased revenues.
But its greatest benefit will be in the abolition of involuntary poverty and the rise of a new civilization. It is not fair to the reader of a definition to urge this larger conclusion, the knowledge of which can come only from a fuller investigation and the dawning upon his apprehension of the light of the new vision. But this conclusion follows as certainly as do the various steps of reasoning which we have endeavored to keep before the reader in this purely elementary definition.
Posted on February 26, 2012 at 04:05 PM in civilization, commons, commonwealth, Earth for All, economic justice, economic rent, ending poverty, equal opportunity, equality, financing education, financing health care, financing infrastructure, financing services, income concentration, land appreciates buildings depreciate, land different from capital, land rent, land value created by community, location, location, location, Natural Public Revenue, Occupy Wall Street's values, population, population growth, poverty, rent, defined, small government, wealth distribution or concentration | Permalink | Comments (0)
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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.
excerpt from The Single Tax Year Book (1917)
Posted on February 22, 2012 at 10:22 PM in all benefits go to landholder , better cities, capital gains are land gains, capitalization, civilization, commonwealth, corruption in government, corruption of economics, cui bono?, economic rent, financing education, financing health care, financing infrastructure, financing services, government's role, immigration, income tax, justice of the single tax, land appreciates buildings depreciate, land rent, land value created by community, land value taxation, landlordism, little people pay taxes, location, location, location, make land common property, Natural Public Revenue, popular ignorance of land economics, population, population growth, private property in land, privatization, privilege, property rights, property tax, property tax "relief", property tax is two taxes, property tax reform, reaping what others sow, rent, defined, socializing risk and privatizing profit, special interests, sufficiency of land rent, tax reform, toll-takers, trickle-down economics, unearned increment, urban land value, windfalls | Permalink | Comments (0)
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In the files I've been digging through, from the late 50s to the early 80s, I found an early draft of a fine paper by Mason Gaffney about California's Proposition 13, for presentation at an August, 1978 conference. I dug around and found a published copy of that paper, and think it worth sharing here. Original title, "Tax Limitation: Proposition 13 and Its Alternatives"
I see that there continue to be people who see the stupidity of Proposition 13 -- see http://www.dailyrepublic.com/opinion/letters-editor/time-for-a-petition-against-proposition-13/ Perhaps they will find this of use. Georgists recognize Prop 13 as the antithesis of logical and just taxation.
First, a few of my favorite paragraphs, which I hope will whet your appetite for the whole paper. I won't attempt to provide the context (you can pick that up when you continue to the paper, below).
You can read more about the Poor Widow by clicking on the "widow's skirts" link at left, in the tag cloud, and by reading Bill Batt's Property Tax Relief Measures: Answers to the "Poor Widow " Argument (or the pdf version)
Here is, perhaps, my favorite:
The land tax does that because it cuts only the fat, not the muscle. It takes from the taxpayer only "economic rent," only the income he gets for doing nothing. If people could grasp this one overriding idea, then the whole sterile, counterproductive, endless impasse between conservatives who favor incentives and liberals who favor welfare would be resolved in a trice, and we could get on to higher things.
The final paragraphs speak directly to us in 2012. 34 years have passed since this was written.
If your appetite is whetted by these excerpts, you can read the entire article below:
Posted on January 22, 2012 at 04:50 PM in absentee ownership, all benefits go to landholder , assessment, buildings depreciate, capital gains are land gains, capitalization, classical economists, common good, corruption of economics, cui bono?, democracy, equality, financing education, financing services, free lunch, government's role, home equity, incentive taxation, incentives, land appreciates buildings depreciate, land different from capital, land rent, land share of real estate value, land speculation, land value created by community, little people pay taxes, location, location, location, Natural Public Revenue, natural resources, popular ignorance of land economics, population growth, privatization, privilege, property tax, property tax is two taxes, property tax reform, Proposition 13, public spending, real estate bubble, reaping what others sow, small government, tax reform, taxation, transportation, unburdening the economy, underused land, unearned income, unemployment and underemployment, user fees, widow's skirts | Permalink | Comments (0)
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I came across this in the San Jose Letter, from late 1895. Over the course of the year of issues online (about 430 pages), there were just a few articles specifically about the Single Tax. But I continue to be amazed at how much of the popular literature of the 1890-1920 period has as its context the assumption that the reader knew of and was generally comfortable with the ideas of Henry George. They were in the air people breathed, well-known to all! What I find interesting, as a long-ago American Studies major, is that a 21st century reader who isn't familiar with George's ideas, reading that literature, would miss out on most of the conversation -- and perhaps never notice the gap!
The graphic [woodcut, or "cut"] is definitely a keeper. It explains a lot of things. Location, location, location. This political cartoon covers it pretty well. (See also a recent video here.) While it isn't signed, it makes me think of J. W. Bengough's cartoons, which appeared in The Single Tax Review for a number of years in the first decade of the 20th century. Bengough was also the author of the wonderful Up-to-Date Primer: A First Book of Lessons for Little Political Economists.
I'm assuming that Franklin Hichborn, editor of The San Jose Letter, wrote this piece, inspired in part by the woodcut in the SF Star. The comparison of the 4 lots might be compared to Louis F. Post's lecture notes, at http://wealthandwant.com/docs/Post_Lectures.htm, starting at Chart 28.
The island analogy is prominent at http://www.wealthandwant.com/. Check out "Robinson Crusoe" and "new country" in the "themes."
Through the courtesy of James H. Barry, publisher of the San Francisco Star, we are enabled to publish the cut accompanying this article, which gives, as the Star expresses it, the "Single Tax in a nut shell." In the near future a series of articles on Single Tax will be published in the Letter, which, besides stating clearly what the Single Tax is, will give, which will be more important, what the Single Tax is not. The confusion among the people on this very simple subject, is due in the main, I fancy, to their misunderstanding of the term rent. It is proposed to show what rent is, and, by it, what is meant by the Single Tax.
Any old farmer knows, and common sense will tell the inexperienced, that in a 10 acre field, more grain can be raised by planting a bushel of seed than a quart, more by plowing the land and harrowing, than by omitting the plowing, more by having the field fenced than by allowing cattle to run over it. In a word it pays to expend a certain amount of labor and capital upon our 10 acres. But it will be just as readily recognized that the thing can be over done, that the field can be plowed so much that the last plowing does not pay, that more seed can be sown that will be justified by the returns. There is, than a point in the culivation of our field where a given amount of seed and a given amount of plowing will yield the best returns, a point beyond which it will not pay the farmer to go, where the return will begin to be deminished in proportion to the outlay. In a word, a point of deminishing returns.
Now, suppose a community to be living on an island which has no communications with the outer world. Suppose the food of the community to be, in the final count, wheat, and suppose our island to have four grades of land, one producing at the point of diminishing returns 30 bushels to the acre, one 28, one 26 and one 24. Here is our land:
30 bushels to the acre
28 bushels to the acre
26 bushels to the acre
24 bushels to the acre
So long as the 30-bushel land will supply the wants of the people there will be no rent on our island. If the 30 bushel tract is owned by ten people they will compete with each other for tenants until practically nothing is paid for the use of the land.
But when the population of our island increases to such an extent, (and by the way, it is bound to increase so long as there is free land) that the 30 bushel land will not supply the wants of the inhabitants, the 28 bushel land must be cultivated. The 30 bushel land is then in demand, for those cultivating it will, with the same outlay of labor and capital, get 2 bushels to the acre more than the 28 bushel land, and the ten owners may and will charge all they can get for its use. This will be two bushels of wheat a year or the difference between the yield of the two tracts. These two bushels will be rent.
When the combined 30 and 28-bushel tracts fail, owing to the steadily increasing population, to supply the island with wheat, the 26-bushel land must be cultivated. The owners of the 30-bushel tract will be able to get 4 bushels a year rent, the owners of the 28-bushel tract 2 bushels. When increasing population brings the 24-bushel tract into cultivation, 6, 4, 2 bushels will be charged, plus the amount which the necessities of the people, enable the owners of the 24-bushel land to charge them.
This, then, is the way rent originates. Dr. Walker defines it: The remuneration received by the land-owning class for the use of the native and indestructible powers of the soil, or, as it might be expressed, for the use of natural agents.
Our wheat producing island presents the doctrine of rent in its simplest possible form. "Land and natural agents" includes the arable, pasture and timber lands, mineral deposits, water privileges and building sites. When one piece of land becomes valuably [sic] for any reason, to a community, the person enjoying its advantages can give, and still be able to compete with his neighbor occupying land less favorable situated, the difference between the productiveness of the two tracts — rent. Who should receive this difference? Our present system says individual land-lords. Henry George says the people. He would collect this rent from land holders. This would be sufficient to meet all the requirements of national, state and municipal governments. It would be a single tax.
We have scarcely room to state them here, but briefly a few of the things the single tax is not: It is NOT a tax on acreage. It is a tax on land values. If farmer "A" has a 100-acre farm valued at $10,000, it means that the difference between the productiveness of that farm and an equal amount of no-rent land is, at our present rates of interest about $800. If city land—lord "B" has a 25-foot lot valued at $100,000 it means that lot is worth to the community, from its situation or for other causes, $8,000 a year more than the non-utilized land. The ''single tax" on the 100 acres would be then $800 and on the 25-foot lot $8,000 a year. Farmers do not seem to be able to grasp this. In New Zealand the people are blessed with a land system resembling very much the single tax: and yet, the very term, single tax, frightens the farmer of that progressive island as badly as it does the prune-growers of our own Santa Clara valley.
Rent is NOT interest, insurance, taxes as they are, or water-rates, although they are all paid by the honest plodders of the community under the name, rent. Did it ever occur to you, my honest friend, that the landlord, before whom you doff your greasy cap so humbly, and who boasts that his taxes are so much while yours are nothing, never paid a tax-bill on rented property in his life. You pay it for him. He is your agent. He figures out your rent thus:
"The land is worth so much, interest on that (this is rent) the building so much interest on that (this is interest) insurance, so much, water-rate so much, taxes so much. I can allow tenant to have the place for the sum of these."
Thus you pay the rent, interest, insurance, water rates, taxes, under the generality "rent." The landlord pays nothing in the shape of water rates, insurance or taxes. He collects interest on the money invested in the buildings, which we will not pass upon. He collects the economic rent of the land and appropriates it to his own use, which is robbery.
One word on the difference between real and personal property, and we will leave you, my honest friend, to accumulate your landlord's taxes for next year. I paid five cents for the pen-holder with which I am writing this. The man I got it from gave me title to it, which he had purchased from some one else. This some one else, in his turn had acquired title by purchase, and if we follow the title back far enough, we will find the man who first owned the pen-holder, who did not purchase it,— made it. The original title, then, to this pen-holder, rests in human labor. It is so with every piece of personal property: this paper, ink, desk, house — the title to them all is the same — human labor. And, many reforming unmentionables to the contrary, every man is entitled to the results of his own exertions.
But how about the land upon which this building is situated? A. owns it. Where did "A" get his title? From "B." Tracing this title back, shall we find it resting on human labor? Not at all. No one made this land. Some one took it; gave title to some one else, and that title stands. It rests in force, fraud or nothing.
To sum it up: Notice that the blessing of rent did not come to our wheat-producing island until the increasing population, the people, made the land valuable. The million-dollar blocks in San Francisco would not be worth $1,000,000 if the people who have built up the city had not made them so. Now, since there can be no private title acquired to land that will stand the test of reason, since the very rent is due to the people themselves, and arises from and increases with population, we say that the people are entitled to this rent. Can you give one reason why individual proprietors should take it? Can you give one valid reason why people should pay it to them? If you cannot, you must admit that the economic rent of a nation, the unearned increment of land, belongs to the people. As this rent would more than pay the taxes of the nation, no other tax would be necessary. Thus you believe in the wisdom of the single tax. What are you going to do to secure it?
Cut the accompanying picture out; hang it up where you can conveniently see it, and consult it every time that, after stretching and pinching, and starving yourself and family, you have failed to make both ends meet.