LVTFan's Blog

"Proputty" --- A Lecturette in Rhyme, by J. W. Bengough

John Wilson Bengough was a skilled artist and cartoonist, but he was also skilled with words.  This appeared in Single Tax Review, Winter 1906.

“PROPUTTY.”
(For the Review.)
A LECTURETTE IN RHYME.

I took up my Tennyson lately and read his dialect verse
Of the sturdy old “Northern Farmer,” whose soul was in his purse;
How he berated Sam, his son, who wanted to marry for “loove,”
And the folly of such a notion sought earnestly to prove.

“ ’Ear my ’erse’s legs,” says he, “as they canters and canters awaay,
Proputty, proputty, proputty—that’s wot I ’ears ’em saay!”
“Proputty, proputty, proputty”—that was the only thing
That to him was of real importance concerning a wedding ring.

Gentleness, truth and sweetness; a pretty figure and face,
These, and a passionate love, are all very well in their place;
But to be of any account in blushing, prospective brides,
“Proputty, proputty, proputty”—that must be there, besides!

Now, to many who read the poem this Northern Farmer seems
A sordid old grasping wretch, who only of riches dreams;
“Proputty, proputty, proputty.”—so runs his one refrain,
“Proputty, proputty, proputty”—hoarding, profit and gain.

It's Milk That Makes the Cream ...

This is from a newsletter about 100 years ago --

SONS OF MARY — AND OF MARTHA

“Ninety per cent of the world of men

Are envying daily the other ten

 

Who somehow seem to cut the pie

As days and weeks and years roll by.

"They’re lucky guys" these other ten

Who are envied by the rest of men;

But the ninety wishers never seem

To sense it's the milk that makes the cream.

Beneath the surface the reason lies

Which proves the ninety are not "wise."

For why are they not like other men

These few we call the Upper Ten?

Once and for all the reason learn:

Because they Own instead of Earn!

 

Legalized privilege gives them gold

Beyond the dreams of a pirate bold.

 

The Community's natural income—rent,

To these sons of Mary is given and spent:

Become a ground hog, that's the wheeze

If you aspire to "raise the breeze!"

Well—what can the sons of Martha do

To unscramble this economic stew?

For public revenue let them take,

The rent, that everyone helps to make.

From all taxation thus set free

The human family will live in glee,

’Cause each will have what will be ‘‘bon,"

A full return from his brain and brawn.

Why do the Ninety suffer a flaw

To darken the mirror of Natural Law?

Lack of knowledge?-—there's the cat

That's eating the proletariat.

J. R. Dickson.
Ottawa.

Who Gets the Land Rent, and Why: Two NYC Stories

and, more to the point, is there a better way to do things, if an efficient economy, more jobs, less income concentration are things we value?

Interesting that, according to these articles, the lords of NYC land will collect 6% or 8% of the land's value when the rent resets.  6 or 8%!   (Typical property taxes in NYC for condos run less than 1% of the total value; see http://www.nytimes.com/2012/10/16/nyregion/many-high-end-new-york-apartments-have-modest-tax-rates.html, which includes this paragraph:

"In a study of 2010 nationwide property tax rates, the average homeowner paid a median of 1.14 percent of home value that year, according to the Tax Foundation, a research group. In Manhattan, that figure was 0.78 percent. For the $88 million apartment at 15 Central Park West, 0.78 percent would be $686,000. But this year, the property taxes due on that penthouse were $59,000."

Just think how much productive activity we could untax were we-the-people to collect some portion of that annual land rent for public purposes.   And consider how unproductive the Lords of Land are.  What have they done to earn that land rent?  Is our "tradition" -- to let them keep it -- a wise or just one, or is it part of our wealth concentration structure?

Here are the two articles, with a couple of calculations added:  (Notice that acreage is not even mentioned!)

http://www.bloomberg.com/news/2014-11-06/nyc-trump-co-op-dwellers-face-million-dollar-bills.html

NYC Trump Co-Op Dwellers Face Million-Dollar Bills
By Oshrat Carmiel  Nov 6, 2014 4:16 PM ET   

The ground beneath Trump Plaza, at 167 E. 61st St., is up for sale as land prices break records.
Manhattan’s surging land costs are leaving the shareholders of an East Side luxury co-operative with a tough choice: pay a hefty price to buy the land under the building, or face increasing bills to keep renting it.

The ground beneath Trump Plaza, at 167 E. 61st St., is up for sale as land prices break records. The co-op board has offered to buy the property for $185 million, a cost that would saddle residents with assessments that, for some, would top $1 million, said Adam Leitman Bailey, a New York real estate attorney who has been contacted by owners concerned about the deal before it goes into contract.

“People are calling me to stop this from happening,” said Bailey, who has reviewed board documents but hasn’t been officially retained. “People want to stop the assessment.”

The 31-year-old co-op, which makes annual rent payments to the family that owns the ground, is weighing its financial future at a time when rising prices for land make it attractive for investors to buy such property for a reliable stream of rental income. The board opted to put in a bid as it otherwise faces the prospect of a steep rent increase when the lease resets in 2024, Bailey said.

“The fact that the family put it up for sale should terrify the co-op,” said Joshua Stein, a Manhattan real estate attorney who isn’t involved in the transaction.

“Whatever opportunistic investor buys the land will probably be way more aggressive about the rent reset than either an estate or a group of heirs,” he said. “Someone who is buying it, is buying it specifically to squeeze out every last dollar of rent.”

Monthly Payments

Marc Cooper, president of the co-op board and vice chairman of investment-banking firm Peter J. Solomon Co., didn’t return a phone call left at his office yesterday seeking comment on the plan to purchase the ground.

Co-op residents buy shares in a corporation that owns the building, rather than getting a deed to the apartment itself, as they would in a condominium. Shareholders make monthly maintenance payments that collectively cover building costs such as mortgage payments, ground rent and operating expenses.

A Trump Plaza shareholder with a 1,000-square-foot (93-square-meter) one-bedroom apartment whose monthly maintenance fee is now about $2,100 would pay about $9,800 after the rent is recalculated in 10 years, Bailey said, citing a projection by the building’s co-op board. The rent increase would be about 8 percent of what the land value is in 2024, he said.

Record Prices

Buildable lots in Manhattan sold for an average of $657 a square foot in the third quarter, up 29 percent from a year earlier and an all-time high for the period, according to Massey Knakal Realty Services. Three purchases completed in the quarter were for more than $1,000 a square foot, the firm’s data show.

LVTfan here:  That $657 per square foot is NOT per square foot of land (at 43,560 sq ft per acre, that would be just $28.6 million per acre, laughably low in Manhattan). Rather, it is per buildable square foot.  Quick and dirty, if a, say, 20 story building can be built on a 10,000 sf footprint, constituting 200,000 sf, the calculation would be 200,000 times $657, or $131.4 million, for that 1/4 acre, which works out to over $500 million per acre. $500 million per acre -- compared to an acre of good agricultural land, at $5,000 per acre, that's 100,000:1.  (And for those 3 purchases over $1,000 psf, add 50% to that ratio.)

Possibly difficult for those of us who see land which sells for $5,000 or $50,000 or even $500,000 per acre to fathom $500 million per acre.  But that's reality!

Trump Plaza’s situation is different from most other co-operatives in Manhattan, which do own the land on which the building sits and make no rent payments. Co-op units with ground leases tend to sell at a discount because they have higher maintenance costs and buyers sometimes face challenges getting mortgage financing. Other ground-lease co-ops in New York include 995 Fifth Ave., the Excelsior at 303 E. 57th St. and Carnegie House at 100 W. 57th St.

Carnegie House

The ground beneath the 324-unit Carnegie House was purchased for $285 million to a group that includes Rubin Schron’s Cammeby’s International and real estate investor David Werner, Christa Segalini, a spokeswoman for Cammeby’s, said today. The 21-story building, with an entrance on Sixth Avenue, occupies an entire block front from 56th Street to 57th Street, according to real estate website Streeteasy.com.

For shareholders at Trump Plaza, buying the land beneath them means coming up with large sums of cash up front. Each owner was assessed a fee of about $2,329.40 a share, according to Bailey.

A resident of a two-bedroom unit who holds 440 shares in the corporation, for example, would be charged $1.02 million, Bailey said. A 1,600-square-foot three-bedroom apartment, worth 671 shares, would get a $1.56 million assessment. Residents get more shares the higher up their apartments are in the 39-story building.

The 154-unit Trump Plaza, at 61st Street and Third Avenue, was completed in 1983, according to StreetEasy. A 2,800-square-foot unit on the 32nd floor with views of Central Park is listed for sale at $3.95 million. The monthly maintenance charge for the three-bedroom, four-bathroom apartment is $7,228, according to the website.

LVTfan here: One might reasonably wonder how much (a) the sellers of the land were paying NYC in property taxes; (b) how much of the monthly "maintenance charge" for the condo is paid by the condo complex to the city in property taxes (which pay for the schools and lots of other public services) and how much is for the building and its services to the condo owners; and (c) how much the land share of that 32nd floor unit is.  If a 1600sf apartment gets a $1.56 million assessment, the 32nd floor apartment, at 2800sf should be roughly twice that, or about $3 million.  Thus, the $3.95 million asking price on the 32nd floor is about 4/7 of the total value, or 56%; the other 44% is land value.

Resale Value

The sale of the ground beneath the tower hasn’t gone into contract yet. Douglas Harmon and Adam Spies, brokers at Eastdil Secured LLC, are representing the owners, who are listed in public records as the estate of Donald S. Ruth and members of the Ruth family. Spies declined to comment on plans for the sale.

A purchase of the land by the co-op ultimately would add resale value to the building’s apartments, Stein said. Extinguishing the ground lease permanently removes the threat that rents will reset to unaffordable levels. With that uncertainty gone, future buyers would be willing to pay more for a unit in the tower, he said.

“If you’re the co-op, getting rid of that threat is a really good thing,” Stein said. “There’s a lot of value being created.”

To contact the reporter on this story: Oshrat Carmiel in New York at [email protected]

To contact the editors responsible for this story: Kara Wetzel at [email protected] Christine Maurus

 

Here's the second article

http://therealdeal.com/blog/2014/11/06/werner-led-group-pays-285m-for-land-under-100-west-57th-street-sources/

Werner-led group pays $285M for land under 100 West 57th Street: sources

324-unit Carnegie House co-op faces ground rent reset in 10 years, insiders say

November 06, 2014 11:30AM  By Adam Pincus

• Print

Carnegie House at 100 West 57th Street (Photo credit: Google)

David Werner, a Borough Park investor who has wowed New York City with a series of big buys this year, partnered with Rubin Schron and the Cohen family to pay $285 million for the land under 100 West 57th Street, sources told The Real Deal. The 324-unit Carnegie House cooperative building is the ground tenant on the property.

A person close to the deal said the investment group closed yesterday on the purchase of the property, which is located at the corner of Sixth Avenue and 57th Street.

This is the third major acquisition by David Werner this year. He purchased 5 Times Square for $1.5 billion and the leasehold for the Mobil Building at 150 East 42nd Street, for $855 million. Werner, Schron and the Cohen family’s Carlton Associates did not immediately respond to requests for comment.

Insiders expect to see more pricey sales of land under co-op buildings with resets looming.

In fact, the sale is being mirrored nearby with the marketing of the ground under the Trump Plaza at 167 East 61st Street, which has a rent reset in 2024. Eastdil Secured brokers Doug Harmon and Adam Spies have that listing.

The co-op building has a ground lease that runs for another 51 years with the property owner, currently paying about $4.4 million per year. In approximately 10 years, the rent for the ground lease payments will reset. That reset will be based on market values.

an average of $13,600 per year per family -- ignoring the commercial tenants

Ground resets typically price the new rent at about 6 percent of the current market value.

Investment sales broker Robert Knakal, chairman of Massey Knakal Realty Services, estimated the value of the land to be at least $1,200 per square foot and up to $1,500 per foot, if the value of the retail is taken into consideration. Knakal is not involved in this property.

At that value, the land with 377,000 square feet of development rights, would be worth $452 million. That could work out to an annual rent payment of $27 million per year, if reset today, according to an analysis by TRD.

An average of $83,300 per family -- ignoring the commercial tenants

To help fund the purchase, the group obtained a $180 million loan from Natixis Capital Markets in a deal arranged by Drew Anderman, a senior managing director at the mortgage brokerage firm Meridian Capital Group, insiders familiar with the deal said.

 

 

Basic Principles of Ground Lease Agreements – Yes, a Contract!

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.)

Basic Principles of Ground Lease Agreements – Yes, a Contract!.

PUBLISHED: JANUARY 7, 2013  

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.

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The Earth-for-All Calendar: Undecimber 13 -- Arnold

The landlord is recognized as a costly anachronism, whose moral claim, even to compensation for expropriation, is constantly getting weaker.

—Matthew Arnold, quoted in London Daily News.

Henry George's chapter in McNeill's "The Labor Movement: The Problem of Today" (1887)

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)

http://archive.org/stream/labormovementpro00mcneiala/labormovementpro00mcneiala_djvu.txt

THE LABOR MOVEMENT;
THE PROBLEM OF TODAY.

THE HISTORY, PURPOSE AND
POSSIBILITIES OF LABOR ORGANIZATIONS
IN EUROPE AND AMERICA; GUILDS, TRADES-
UNIONS, AND KNIGHTS OF LABOR; WAGES AND PROFITS;
HOURS OF LABOR; FUNCTIONS OF CAPITAL; CHINESE LABOR:
COMPETITION; ARBITRATION; PROFIT-SHARING AND
CO-OPERATION; PRINCIPLES OF THE KNIGHTS OF
LABOR; MORAL AND EDUCATIONAL AS-
PECTS OF THE LABOR QUESTION.

EDITED BY GEORGE E. McNEILL,
First Deputy of Mass. Bureau of Statistics of Labor; Sec.-Treas. of D. A. 30, Knights of Labor.

ASSOCIATE AUTHORS: TERENCE V. POWDERLY, G. M. W., K. of L.; DR. EDMUND J. JAMES, University of Pennsylvania; HON. JOHN J. O'NEILL, of Missouri; HON. J. M. FARQUHAR, of New York; HON. ROBERT HOWARD, of Massachusetts; HENRY GEORGE, of New York; ADOLPH STRASSER, Pres. Cigar Makers' Union; JOHN JARRETT, of Pennsylvania; REV. R. HEBER NEWTON, of New York; F K. FOSTER, of Massachusetts; P. M. ARTHUR, Chief Engineer Locomotive Brotherhood; W. W. STONE and W. W. MORROW, of California; FRANKLIN H. GIDDINGS, "Springfield Union"; JOHN McBRIDE, Secretary Coal Miners' Union; D.J.O'DONOGHUE, of Toronto, Canada; P. J. McGUIRE, Secretary Carpenters' Brotherhood, Ohio.

NEW YORK: THE M. W. HAZEN CO.
1887.

Copyright 1886, by
A M. BRIDGMAN & CO.

CHAPTER XXIII.  THE LAND QUESTION.

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.

BENEATH all the great social questions of our time lies one of primary and universal importance, the question of the rights of men to the use of the earth.

The magnitude of the pecuniary interests involved, the fact that the influential classes in all communities where private property in land exists are interested in its maintenance, lead to a disposition to ignore or belittle the land question: but it is impossible to give any satisfactory explanation of the most important social phenomena without reference to it; and the growing unrest of the masses of all civilized countries, under conditions which they feel to be galling and unjust, must at length lead them, as the only way of securing the rights of labor, to turn to the land question.

To see that the land question does involve the problem of the equitable distribution of wealth; that it lies at the root of all the vexed social questions of our time, and is, indeed, but another name for the great labor question in all its phases, it is only needful to revert to first principles, and to consider the relations between men and the planet they inhabit.

We find ourselves on the surface of a sphere, circling through immeasurable space. Beneath our feet, the diameter of the planet extends for eight thousand miles; above our heads night reveals countless points of light, which science tells us are suns, that blaze billions of miles away. In this inconceivably vast universe, we are confined to the surface of our sphere, as the mariner in mid-ocean is confined to the deck of his ship. We are limited to that line where the exterior of the planet meets the atmospheric envelope that surrounds it. We may look beyond, but cannot pass. We are not denizens of one element, like the fish; but while our bodies must be upheld by one element, they must be laved in another. We live on the earth, and in the air. In the search for minerals men are able to descend for a few thousand feet into the earth's crust, provided communication with the surface be kept open, and air thus supplied; and in balloons men have ascended to like distances above the surface; but on a globe of thirty-five feet diameter, this range would be represented by the thickness of a sheet of paper. And though it is thus possible for man to ascend for a few thousand feet above the surface, or to descend for a few thousand feet below it, it is only on the surface of the earth that he can habitually live and supply his wants; nor can he do this on all parts of the surface of the globe, but only on that smaller part, which we call land, as distinguished from the water, while considerable parts even of the land are uninhabitable by him.

By constructing vessels of materials obtained from land, and provisioning them with the produce of land, it is true that man is able to traverse the fluid-surface of the globe; yet he is none the less dependent upon land. If the land of the globe were again to be submerged, human life could not long be maintained on the best-appointed ships.

Man, in short, is a land-animal. Physically considered, he is as much a product of land as is the tree. His body, composed of materials drawn from land, can only be maintained by nutriment furnished by land; and all the processes by which he secures food, clothing and shelter consist but in the working up of land or the products of land. Labor is possible only on condition of access to land, and all human production is but the union of land and labor, the transportation or transformation of previously existing matter into places or forms suited to the satisfaction of man's needs.

Land, being thus indispensable to man, the most important of social adjustments is that which fixes the relations between men with regard to that element. Where all are accorded equal rights to the use of the earth, no one needs ask another to give him employment, and no one can stand in fear of being deprived of the opportunity to make, a living. In such a community, there could be no "labor question." There could be neither degrading poverty nor demoralizing wealth. And the personal independence arising from such a condition of equality, in respect to the ability to get a living, must give character to all social and political institutions.

On the other hand, inequality of privilege in the use of the earth must beget inequality of wealth and power, must divide men into those who can command and those who are forced to serve. The rewards which nature yields to labor no longer go to the laborers in proportion to industry and skill; but a privileged class are enabled to live without labor by compelling a disinherited class to give up some part of their earnings for permission to live and work. Thus the order of nature is inverted, those who do no work become rich, and "workingman" becomes synonymous, with "poor man." Material progress tends to monstrous wealth on one side, and abject poverty on the other; and society is differentiated into masters and servants, rulers and ruled.

If one man were permitted to claim the land of the world as his individual property, he would be the absolute master of all humanity. All the rest of mankind could live only by his permission, and under such conditions as he chose to prescribe. So, if one man be permitted to treat as his own the land of any country, he becomes the absolute sovereign of its people. Or, if the land of a country be made the property of a class, a ruling aristocracy is created, who soon begin to regard themselves, and to be regarded, as of nobler blood and superior rights. That "God will think twice before he damns people of quality," is the natural feeling of those who are taught to believe that the land on which all must live is legitimately their private property.

Baltimore Ground Rents -- some history and some principles

Just Taxation

Among no class of reformers do we find more clear thinking or a sounder political economy than among the "single-taxers." Following the writings of the late Henry George there is a considerable and important literature upon this subject. Land monopoly and speculation should be stopped. Labor should not be taxed. The resources of nature should be made to minister equitably to the whole people. Now the weakest pay the most tax. It should be the strongest and they whom the government most benefits. 

A Baltimore Instance

The Public

A single tax man of Baltimore, Mr John Salmon, expresses no little surprise that Senator Hanna's candidate for governor of Ohio supposes that the single tax has been a disastrous failure wherever tried. Of Mr Herrick and his notion Mr Salmon writes: This stamps him as being a twisted thinker and a loose observer. The single tax is in operation all over the United States, flowing into the pockets of private individuals, which is what single taxers object to. Here in Baltimore more than in any other section of the country, it is strongly apparent. We have the ground rent system in operation, 90 percent of the real estate being held on leaseholds. The custom is an old English one grafted on the Maryland colonies by Lord Baltimore and his English compeers, and it has grown and flourished like a green bay tree. When one buys a home here it is in nine cases out of ten subject to a ground rent. These ground rents are dealt in as a form of investment the same as a mortgage or any other form of investment; but the point to observe is that they are a single tax, pure and simple, the price paid for the use of the ground per se and for ground only.

Our last assessment separated the value of the land from the value of improvements, and it is done every day in our community. Baltimore has more houses per capita than any city in the country, due to the ground rent system; and a house costing $1,200 to build is very often sold for $800 or $900 in order to create a ground rent ranging from three dollars a front foot to $20 and $40 a front foot. To explain more fully: Bonus buildings are run up on plats of ground split up into lots of 15x90, and a ground rent say of $6 per front foot is put on the lot, making $90 a year ground rent, which the buyer agrees to pay, and in his ground rent is a clause that he will also pay all taxes. This $90 is essentially a single tax. The agreement to pay it is exactly the same kind of a contract that is in vogue in Fairhope, Ala. With this extremely important exception, that whereas we in Baltimore bind ourselves to pay all the taxes, in Fairhope the company or lessor, agrees to pay all taxes. Talk of its being a disastrous failure! Not on your life. Ground rents are as scarce as hen's teeth, and can only be bought on a three percent basis. They command as good a price as government bonds, and it is estimated that $14,000,000 at least is raised in Baltimore alone from this source —  nearly twice as much as the city and state taxes amount to. And what is this tax of $14,000,000 paid for? Why, merely for the privilege of living in the city of Baltimore. That's all the payers get for it. And the only kick we've got coming is that the private individuals get that money instead of the city and state.

-- found in "The American Cooperator" (1903); "The Public" was a weekly newspaper, out of Chicago, edited by Louis F. Post, who went on to serve in Woodrow Wilson's administration.

The Earth-for-All Calendar: December 10 -- Spencer

After all, nobody does implicitly believe in landlordism.

— HERBERT SPENCER, in 1850, Social Statics, Chap. IX.

Not only have land tenures an indefensible origin, but it is impossible to discover any mode by which land can become private property.

— HERBERT SPENCER, in 1850, Social Statics, Chap. IX.

The right of mankind at large to the earth's surface is still valid, all deeds, customs and laws notwithstanding.

— HERBERT SPENCER, in 1850, Social Statics, Chap. IX.

The Earth-for-All Calendar: December 9 -- Murray and Arnold

To turn a landed proprietor out of the seat you have once allowed him to occupy is about as pleasant a job as trying to root up a live oak with a pocket-knife.

— E. C. GRENTVILLE MURRAY, The Member for Paris, p. 157.

Landowners hate parting with their land.

— MATTHEW ARNOLD, The Incompatibles, Irish Essays, p. 29.

The Earth-for-All Calendar: December 5 -- Sismondi

The economists have concluded from this that the landowners were the only masters of the situation, and that they could turn the nation out when they pleased.

— SISMONDI, New Principles of Political Economy (1820), Book III., Chap. 5.

The Earth-for-All Calendar: December 3 -- John Bright

We have the landowner first, who is always becoming richer.  . . . But if you come to the laborers, who cultivate the land, by whose toils and whose sweat your tables are furnished with bread and with beef and with many other things that they produce, you find these laborers at this moment, I believe, at a comparatively greater distance from the landlord . . .  than they were at any former period.

— JOHN BRIGHT, Speech at Birmingham, January 26, 1864.

The Earth-for-All Calendar: December 2 -- Cobden

The landlords have been revelling in prosperity — in a bloated and diseased prosperity — at the very time when the people have been suffering the greatest privation and want of food.

— RICHARD COBDEN, Speech at London, September 28, 1843; Speeches of Richard Cobden, p. 35. (Edited by John Bright and Thorold Rogers.)

The Earth-for-All Calendar: November 28 -- Morris and Ruskin

He may, and often he does, engross the first necessity of labor, land, and neither use it himself or allow anyone else to use it, and though it is clear that . . . he is injuring the community, the law is sternly on his side.

— WILLIAM MORRIS, Signs of Change, p. 194.

Land should be given to those who can use it.

— JOHN RUSKIN, Fors Clavigera, Part II., Letter ii, p. 96.

The Earth-for-All Calendar -- addendum: St. Ambrose and Pope Paul VI

A sig-file on a listserv brought to my attention a quote from St. Ambrose, which, to my surprise, Ernest Crosby didn't include in his Earth-for-All Calendar:

"You are not making a gift of what is yours to the poor man, but you are giving him back what is his. You have been appropriating things that are meant to be for the common use of everyone. The earth belongs to everyone, not to the rich."

 

A bit of research led me to a number of mentions of this passage, including Pope Paul VI's 1967 encyclical, Populorum Progressio, which sets it in this context:

Issues and Principles

22. In the very first pages of Scripture we read these words: "Fill the earth and subdue it."(19) This teaches us that the whole of creation is for man, that he has been charged to give it meaning by his intelligent activity, to complete and perfect it by his own efforts and to his own advantage.

Now if the earth truly was created to provide man with the necessities of life and the tools for his own progress, it follows that every man has the right to glean what he needs from the earth. The recent Council reiterated this truth: "God intended the earth and everything in it for the use of all human beings and peoples. Thus, under the leadership of justice and in the company of charity, created goods should flow fairly to all." (20)

All other rights, whatever they may be, including the rights of property and free trade, are to be subordinated to this principle. They should in no way hinder it; in fact, they should actively facilitate its implementation. Redirecting these rights back to their original purpose must be regarded as an important and urgent social duty.

The Use of Private Property

23. "He who has the goods of this world and sees his brother in need and closes his heart to him, how does the love of God abide in him?" (21) Everyone knows that the Fathers of the Church laid down the duty of the rich toward the poor in no uncertain terms. As St. Ambrose put it: "You are not making a gift of what is yours to the poor man, but you are giving him back what is his. You have been appropriating things that are meant to be for the common use of everyone. The earth belongs to everyone, not to the rich." (22) These words indicate that the right to private property is not absolute and unconditional.

No one may appropriate surplus goods solely for his own private use when others lack the bare necessities of life. In short, "as the Fathers of the Church and other eminent theologians tell us, the right of private property may never be exercised to the detriment of the common good." When "private gain and basic community needs conflict with one another," it is for the public authorities "to seek a solution to these questions, with the active involvement of individual citizens and social groups." (23)

The Common Good

24. If certain landed estates impede the general prosperity because they are extensive, unused or poorly used, or because they bring hardship to peoples or are detrimental to the interests of the country, the common good sometimes demands their expropriation.

Vatican II affirms this emphatically. (24) At the same time it clearly teaches that income thus derived is not for man's capricious use, and that the exclusive pursuit of personal gain is prohibited. Consequently, it is not permissible for citizens who have garnered sizeable income from the resources and activities of their own nation to deposit a large portion of their income in foreign countries for the sake of their own private gain alone, taking no account of their country's interests; in doing this, they clearly wrong their country. (25)

 

(19) Gn 1. 28.

(20) Church in the World of Today, no. 69: AAS 58 (1966), 1090 [cf. TPS XI, 306].

(21) 1 Jn 3. 17.

(22) De Nabute, c. 12, n. 53: PL 14. 747; cf. J. R. Palanque, Saint Ambroise et l'empire romain,Paris: de Boccard (1933), 336 ff.

(23) Letter to the 52nd Social Week at Brest, in L'homme et la révolution urbaine, Lyon: Chronique sociale (1965), 8-9.

(24) Church in the World of Today, no. 71: AAS 58 (1966), 1093 [cf. TPS XI, 308].

(25) Ibid., no. 65: AAS 58 (1966), 1086 [cf. TPS XI, 303].

 

Those interested in Catholic Social Thought should look for a new book which came out of a 2007 conference held at the University of Scranton, and edited by Professor Kenneth R. Lord of UScranton, entitled "Two Views of Social Justice: A Catholic/Georgist Dialogue."  The version I've seen is the October, 2012, issue of The American Journal of Economics and Sociology, and I understand that it will be made available in other forms as well.

The abstract for the book:

Sixteen scholars have come together in this issue to examine eight social-justice themses from the perspectives of Catholic Social Thought and the philosophy of Henry George.  The themes they address are natural law, human nature, the nature of work, the nineteenth-century papal encyclical Rerum Novarum, causes of war, immigration, development, and wealth, and neighborhood revitalization.  While they sometimes wrangle with each other, their common aspiration is the same as their nineteenth-century predecessors,: to find solutions to the human suffering caused by injustice. 

The Earth-for-All Calendar: November 21 -- William Morris

"And how shall it be when these are gone? What else shall ye need when ye lack masters?  Ye shall not lack for the fields ye have tilled nor the houses ye have built nor the cloth ye have woven."

— WILLIAM MORRIS, A Dream of John Ball, Chap. IV., p. 40.  (Speech of John Ball.)

The Earth-for-All Calendar: November 20 -- Isaiah

They shall build houses and inhabit them; and they shall plant vineyards and eat the fruit of them. They shall not build and another inhabit; they shall not plant and another eat.

— Isaiah, LXV., 21-2.

Land Speculation in Rural Indiana

It isn't just urban land that is the subject of speculation.  Rural farmland can also be speculated upon, to the private benefit of individuals, and the loss of ... the rest of us, the community!   

 

http://www.indystar.com/article/20121110/NEWS05/211100339/StarWatch-investigation-State-paid-twice-what-some-69-land-worth

StarWatch investigation: State paid twice what some I-69 land was worth
To secure path for I-69, INDOT offered $7M for property appraised at $3.34M
Written by Ryan Sabalow and Tim Evans  |  7:47 PM, Nov 10, 2012   

BLOOMINGTON, Ind. -- In 2006, Barry Elkins paid $850,000 for about 200 acres in Monroe County owned by former Indiana University basketball coach Bob Knight.

$4,250 per acre

Elkins told a local newspaper he had no plans to develop the land. He said he also was quite aware state officials planned to acquire at least some of the property for the new I-69 freeway project.

Nonetheless, Elkins told a reporter: "It's a heck of a piece of ground."

Turns out, it produced a heck of a profit, too.

In July, state highway officials paid Elkins $2.41 million for an easement covering 140 of the 200 acres. That's almost four times the $658,800 that state appraisers said the easement was worth.

$17,214 per acre for the 140 acres. $658,800 is $4,705 per acre. The $2.41 million represents a profit of $1.56 million since 2006, still leaves the owner with 60 acres with no easement and 140 acres with an easement.  The $1.56 million profit in 6 years on an $850,000 investment is 84%!  Quite a return!  For what effort?  What did society get in return?

... 
According to I-69 cost estimates INDOT provided this summer, $162.6 million in state and federal funds were spent on right-of-way purchases along the new stretch of freeway.

...

He said the property payments also haven't caused the project to go over budget. He said the I-69 project is 25 percent under budget estimates. Officials this summer pegged the cost of the Evansville-to-Bloomington project at $1.5 billion.

...

The land Elkins bought from Knight wasn't the only Monroe County property along I-69's path that he sold to the state for far more than its fair market value. He and two co-owners also got $348,600 for a 27-acre property appraised at $194,625; and $795,956 for 58 acres appraised at $278,295.

As for the former Knight property, the state purchased the easement to create an "environmental mitigation site" to make up for damage to forests, wetlands, wildlife habitat and other natural resources caused by the new freeway.

After the $2.41 million payday -- which was nearly three times the amount Elkins paid Knight for the entire 200 acres -- Elkins still owns the picturesque expanse of undeveloped pasture and woods about eight miles southwest of Bloomington.

The easement forbids any development on 140 acres of the land but allows Elkins to use it for "low-impact" recreational activities such as hiking, photography and hunting.

And he doesn't have to pay property taxes.

One might reasonably ask what valuation Elkins was paying property taxes on before the transactions.

One might reasonably ask how much the labor costs on this project were -- what men and women got paid for their hours of labor put into building the highway, and then compare that to Mr. Elkins' and others' receipts as passive landholders!!  Quite amazing that we treat the "rights" of landholders as more sacred than we make the rights of the community or of those who work.

One might reasonably wonder how soon the communities along the route of this new highway will revalue their land, and whether the communities will collect more from those whose land benefited from the presence of this highway (and less from those whose properties were in reality negatively impacted, should that be the case).   In general, the aggregate benefits will far exceed the aggregate negative impacts, and would likely be enough to pay all the costs of the construction.

Mr. Elkins' free lunch did not come out of thin air.  And likely, his heirs will continue to enjoy the benefit of it.  

THIS is how wealth concentrates.  This is why we are forced into taxing wages, and sales, and other things we have no business taxing!

The Earth-for-All Calendar: November 15 -- O'Reilly

The dead are below and the landless and those who live to labor,
And grind forever in gloom that the privileged few may live.

— JOHN BOYLE O'REILLY, From the Earth, A Cry, The Statues in the Block, and Other Poems, p. 41.

The Earth-for-All Calendar: November 14 -- Jones

Our place we know, we're so very, very low,
    'Tis down at the landlord's feet;
We're not too low the grain to grow,
     But too low the bread to eat.

— ERNEST JONES (1819-1868), Song of the Lower Classes, Songs of Freedom, p. 127.

Corn Belt Farmland: The Newest Real Estate Bubble? : NPR

Corn Belt Farmland: The Newest Real Estate Bubble? : NPR.

As you read this, recall that a single acre of urban land can be worth $250,000,000 or more -- over 23,000 times what the recently-doubled farmland described in this article sold for!!  Also, it seems worthwhile to point out that 160 acres (one quarter of a square mile), at $10,700 each, works out to $1.7 million -- currently well below the threshold for the federal estate tax! 

Consider, too, what it is that the land speculator brings to the process of production, and what he is rightly entitled to in a fair and just society, and what society is entitled to, and what the workers -- the farmer and his employees -- are entitled to, and what the capitalist -- the fellow who pays for the buildings and equipment -- is entitled to.  Seems like the land speculator is making out awfully -- awefully! -- well but isn't producing or creating anything!!  Why do we do things this way?  Did the absentee landlord deserve a share of the crop the farmer created?  If the farmer has to pay rent to someone, shouldn't it be the community?  Wouldn't it be better if America's investors were motivated to put their funds into better equipment (capital) or employing people (labor)?

November 8, 2012 

Howard Audsley has been driving through Missouri for the past 30 years to assess the value of farmland. Barreling down the flat roads of Saline County on a recent day, he stopped his truck at a 160-acre tract of newly tilled black land. The land sold in February for $10,700 per acre, double what it would have gone for five years ago.

Heading out into the field, Audsley picked up a clod of the dirt that makes this pocket of land some of the priciest in the state. 

"This is a very loamy, very productive, but loamy soil," Audsley said. "A high-clay soil will just be like a rock and that's the difference between the ... soils. And the farmers know this and the investors know this. That's why they pay for it what they do."

A Steep Surge In Prices

It's not just the value of Missouri cropland that's rising. Corn Belt farmland prices from Iowa to Illinois and Nebraska to Kansas have been sky-high lately, boosted by $8-a-bushel corn.

"We paid about $3.3 million for [about 650 acres] in Southeast Illinois in 2009," said Diggle, who is the CEO of Singapore-based Vulpes Investment Management. The company handles $250 million of investor money, about 15 percent of which is in farmland.The high commodity prices have helped encourage investors like Steve Diggle, who have no connection to farming, to compete for their very own acreage in the Heartland.

"This year we sold it at auction and we got $5.1 million," he said, referring to the Illinois farmland. "That's 55 percent higher than we paid. Plus we got two yields — one of 3.5 percent and one of 5 percent. So, you know, as an investment, that's 63 percent over three years. [It] is great and we're extremely happy with it."

Diggle says his firm also purchased a 1,400-acre tract in Illinois two years ago. The company plans to hold on to it to make money through cash rents and land appreciation.

"The value of your land may go up or down. But as long as bond prices remain where they are, it's very hard to see how we'll have a sustained bear market for agriculture," Diggle said. By comparison, he said, the extremely low returns in the bond market are "just so inferior."

A Safer Investment

You don't have to be a billionaire to invest in farmland.

Physics professor Andy Trupin, who lives in Delray Beach, Fla., bought a 155-acre tract of farmland in Lebo, Kan., two years ago because it looked like it would make him more money than gold or the stock market. He also owns another tract that's primarily pastureland.

"Farmland seemed like a much safer vehicle to get an income stream even though ... it's not a high-income stream. At least it's more than you would get on Treasuries at any duration," Trupin said. "And at the same time, [farmland offers] price appreciation or to at least [holds] its value in the event of an inflation period."

The investment has paid off so far, Trupin said. He rented out the land to a local farmer who grows corn, soybeans and wheat. Even the brutal drought failed to knock down the investment.

"Amazingly we managed to get 20 bushels to the acre of corn even though the place was as dry as Las Vegas last year," Trupin said. "I'm willing to let the income from this thing fluctuate. In bad years, it's a slight loss — maybe a couple of thousand on the year — and in good years, you gain up to $10,000 on it."

Trupin found the land online and got help purchasing it by Realty Executives of Kansas City. The company says 90 percent of its new customers are investors like Trupin, and it holds seminars for investors that walk them through the process of evaluating and buying farmland and how to find local farmers to rent the land.

"There's probably a higher percentage now of people who are strictly investors, stock market people, money-market-type investors, and ... they're buying all types of land," said Dale Hermreck, a broker for Realty Executives who says he sold $21 million worth of farmland in Kansas last year.

"We have a lot of outside interest from Texas, Chicago, New York," Hermreck said. "I get calls and inquiries all over the United States."

The Specter Of A Bubble

But to University of Missouri agriculture economist Ron Plain all of this sounds a bit like the housing bubble burst of 2006. He is concerned a similar bubble could be happening in farmland.

"You get several years going up faster than that long-term trend of 6 percent [annual increases] and you're then in a situation where you're sort of due for a correction," Plain said. "And the way you correct is pull those land values down — or 'pop the bubble' ... and so there's concern about that and it's kind of reasonable to worry."

Plain said that with mortgage rates at their lowest in 60 years, it's reasonable to expect the cost of borrowing to go up eventually. And if crop prices retreat from record highs, he said, that means "less income per acre and therefore less ability to pay for farmland."

Should a bubble burst, farmland might be harder to sell, especially compared with other more liquid investments. But investors argue that any bubble is still far off, and they believe that farm acreage will remain a solid long-term investment so long as the demand for food continues to grow.

It remains to be seen whether investors will be able to compete with farmers for the small supply of high-quality cropland available in the Midwest, says broker Hermreck.

"I have people call me all the time and I just don't have what they're looking for," Hermreck said. "Simply supply and demand. It's just not there. I could sell an awful lot more of this land if it was available. And people seem to hang on to something that's making some money and real popular. It's just real popular now to own land."

Abbie Fentress Swanson reports from Missouri for Harvest Public Media, an agriculture-reporting project involving six NPR member stations in the Midwest. For more stories about farm and food, check out harvestpublicmedia.org

The Earth-for-All Calendar: October 16 -- Plutarch

His next task, and indeed the most hazardous he ever undertook, was the making a new division of their lands.  For there was an extreme inequality among them, and their State was overloaded with a multitude of indigent and necessitous persons, while its whole wealth had centered upon a very few.

— PLUTARCH, Life of Lycurgus.

Born Yesterday

Well, not quite.  The film's a little older than I am.

Watched that film last night ... great quote:

Billie: Because when ya steal from the government, you're stealing from yourself, ya dumb ass.

And when we allow others to steal from the commons what rightly belongs to the community, what are we?   Some of that theft we all recognize as theft, and other kinds are perfectly legal, even honored, under our current laws.  I find the latter even more troubling than the former.

And when neither our economists nor our leaders even SEE it, it is fair to call that a corruption of what their businesses are supposed to be.

 

The Earth-for-All Calendar: October 3 -- Marmontel

Let us suppose that a people is excluded from the ownership of the land.  I say that this exclusion, even if followed by no other injustice (which I think impossible), by making a man a stranger to the commonwealth, makes him indifferent to the existence of the State.

— MARMONTEL, Address in Favor of the Peasants of the North (1757), Oeuvres, Vol X., p. 72.

The Earth-for-All Calendar: September 30 -- Exodus and the Bishop of Meath

The land which the Lord thy God giveth thee.

— Exodus, XX., 12.

Any settlement of the land of a country that would exclude the humblest man in that country from his share of the common inheritance would be not only an injustice and a wrong to that man, but moreover would be an impious resistance to the benevolent intentions of the Creator. 

— BISHOP OF MEATH, Letter to Clergy and Laity, April 2, 1881.

The Earth-for-All Calendar: September 25 -- Arnold

All things spoke peace and plenty and the Prince
Saw and rejoiced.  But, looking deep he saw
The thorns which grow upon the rose of life;
How the swart peasant sweated for his wage,
Toiling for leave to live.

— SIR EDWIN ARNOLD, The Light of Asia, Book I., p. 20

The Earth-for-All Calendar: September 13 -- Winstanley

That which is yet wanting on your part to be done is this, to see that the oppressor's power be cast out with his person; and to see that the free possession of the land and liberties be put into the hands of the oppressed commoners of England.

— JERRARD WINSTANLEY,  Epistle Dedicatory to Oliver Cromwell, in

The Law of Freedom in a Platform, or True Magistracy Restored.

The Earth-for-All Calendar: September 12 -- Grant Allen

"But how is it that you allow these chiefs — landlords, don't you call them? — to taboo the soil, and prevent you all from even walking on it? Don't you see that if you choose to combine in a body, and insist upon the recognition of your natural rights — if you determined to make the landlords give up their taboo, and cease from injustice, they'd have to yield to you? And then you could exercise your natural right of going where you pleased, and cultivate the land in common for the public benefit, instead of leaving it as now, to be cultivated anyhow, or turned into waste, for the benefit of the tabooers?"

— GRANT ALLEN, The British Barbarians (Words spoken by Bertram).

The Earth-for-All Calendar: September 10 -- Arnold

We . . . may solace our minds with the imagination of right-minded Englishmen . . . acting as a commission to draw up a list of the thoroughly bad landlords,  . . .  and then bringing their list back to London and saying, "Expropriate these, as the monks were expropriated, by Act of Parliament."

— MATTHEW ARNOLD, The Incompatibles, Irish Essays, p. 33.

The Earth-for-All Calendar: September 8 -- Sir Thomas More

The nobility and gentry and even those holy men, the abbots, not content with the old rents that their farms yielded, nor thinking it enough that they, living at their ease, do no good to the public, resolve to do it hurt instead of good.  . . .  As if forest and parks had swallowed up too little of the land, those worthy countrymen turn the best inhabited places into solitude.

 — SIR THOMAS MORE, Utopia (1516), Book I.

The Earth-for-All Calendar: September 6 -- A. R. Wallace

A great landholder may legally convert his whole property into a forest or hunting ground, and expel every human being who has lived upon it.  In a thickly populated country like England, where almost every acre has its owner and occupier, this is a power of legally destroying his fellow-creatures; and that such a power should exist, and be exercised by individuals, in however small a degree, indicates that as regards true social science, we are still in a state of barbarism.

— ALFRED RUSSEL WALLACE,The Malay Archipelago, Chap. 40.  Final Note to the book. (1869)

The Earth-for-All Calendar: September 14 -- Abbe Lamennais

If you know how to defend your rights, if you accomplish your duty, this frightful disorder will cease, the human race, lifted up after its long downfall, will no longer be the property of a few tyrants, neither will the earth be their exclusive heritage.  All will share in the good things destined by Providence for all.

— ABBE LAMENNAIS, The Book of the People, Chap. XVI.

The Earth-for-All Calendar: August 13 -- Emerson

Then he says: "If I am born into the earth, where is my part? Have the goodness, gentlemen of this world, to show me my wood lot, where I may fell my wood, my field where to plant my corn, my pleasant ground where to build my cabin."

"Touch any wood or field or house-lot on your peril," cry all the gentlemen of this world; "but you may come and work in ours for us, and we will give you a piece of bread."

— EMERSON, The Conservative.

The Earth-for-All Calendar: August 12 -- The Abbe Lemennais and Pascal

You are in this world as strangers.  Go north or south or east or west, and wherever you stop you will find a man to chase you away crying, "This is mine."  And after you have gone through all the countries of the world, you will come back knowing that there is nowhere a poor bit of land where, as a matter of right, your wife can bring forth her firstborn, where you can rest after tilling the soil or where your children can bury your bones.

— THE ABBE LAMENNAIS, Paroles d'un Croyant (1834), Chap. IX.

"This dog belongs to me," said these poor children; "that place in the sun is mine!"   Behold the beginning of all usurpation upon earth!

— BLAISE PASCAL, Pensees, Article VI., Sec. 53.

The Earth-for-All Calendar: August 10 -- Dickens

In love of home the love of country has its rise, and who are the truer patriots or the better in time of need — those who venerate the land, owning its woods and streams and earth and all that they produce, or those who love their country, boasting not a foot of ground in all its wide domain?

— CHARLES DICKENS, Old Curiosity Shop, Chap. XXXVIII.

The Earth-for-All Calendar: August 7 -- Thorold Rogers and Ede

I can easily imagine a great proprietor of ground rents in the metropolis calling attention to the habitations of the poor, to the evils of overcrowding, and to the scandals which the inquiry reveals, while his own income is greatly increased by the causes which make house-rent dear in London, and decent lodging hardly obtainable by thousands of laborers.

— PROF. THOROLD ROGERS, Work and Wages, Chap. XX., p. 550.

Efforts should be made to prevent the increase of value which is occasioned by the growth of the population of towns enriching private individuals.

— The REV. W. MOORE EDE, Honorary Canon of Durham, The Church and Town Problems, p. 88, note.

The Earth-for-All Calendar: July 31 - John Stuart Mill

The ordinary progress of a society which increases in wealth is at all times to augment the incomes of landlords — to give them both a greater amount and a greater proportion of the wealth of the community, independently of any trouble or outlay incurred by themselves. They grow richer as it were in their sleep, without working, risking or economizing. What claims have they, on the general principles of social justice, to this accession of riches?

— JOHN STUART MILL, Principles of Political Economy, Book V., Chap. 2, Sec. 5

 

The Earth-for-All Calendar: July 30 -- Wallace

Unrestricted private property in land gives to individuals a large proportion of the wealth created by the community at large.

— PROF. ALFRED RUSSEL WALLACE, Land Nationalization, Chap. VIII., pp. 235-2.

The Earth-for-All Calendar: July 27 -- John Morley

It will be thought an intolerable thing that men shall derive enormous increments of income from the growth of towns to which they have contributed nothing — that they shall be able to sweep into their coffers what they have not produced — that they shall be able to go on throttling towns, as they are well known to do in some cases. It is impossible to suppose that the system will not be vigorously, powerfully, persistently and successfully attacked.

—JOHN MORLEY, Speech at Forfar, October 4, 1897. The Times, October 5, 1897, p. 5, column 3.

Bankrupt in California

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.

 

To make America more egalitarian, tax the value of land

To make America more egalitarian, tax the value of land - FT.com.

Sir, Joseph Stiglitz is concerned that America has become less egalitarian, and no longer the land of opportunity (June 26). He mentions reducing rent-seeking as a solution, but he does not mention the paradigmatic form of rent-seeking: collecting the ground rents of land. If an increasing share of gross national product is going to the top 1 per cent, it is at least in part because they are the people who own most of the valuable land, and the rents of land are absorbing a larger share of production. No one is making more land to keep the price down by competition.

I'll leave it to you to go read the rest. (Registration is free.)

The Earth-for-All Calendar: June 19 -- John Stuart Mill

The greatest "burthen on land is the landlords."

— JOHN STUART MILL, Elements of Political Economy, Book II., Chap. 2, Sec. 6.

License fees for every worker, or tax land value for revenue?

Dewey tells bands to pay up

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.

Land value taxation is the way to go.

The Earth-for-All Calendar: May 12 -- Adam Smith

As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce.

— ADAM SMITH, Wealth of Nations, Book I., Chap. 6.

Sagacity

This is a paragraph from a book written about 100 years ago about Dr. Edward McGlynn, a much-loved Roman Catholic priest in Manhattan (St. Stephen's Church) who, with Henry George, was active in the Anti-Poverty Society in the last 15 years of the 19th century.  It comes from a section listing "Thoughts of Dr. McGlynn."

Sagacity

It was told of a recently deceased Judge of the Supreme Court of the United States, a man who sat in the Senate of the United States, one of the most eminent men of his generation, how he, a poor lawyer, in a comparatively poor western town, had been able to accumulate some two or three millions of dollars worth of property. How? By "sagacity" in investing in lands at some distance from villages and towns, with foresight that in the course of a few years the growth of those communities, the industry, thrift, talent, virtue, patience of large communities would all keep adding to the value of his property, and in course of time cities, towns and villages would grow up on these lands, and he would be able to command an enormous price for land that cost him but a song. Now, while the law tolerated or even sanctioned what he was doing, he was guilty of an iniquity, of reaping where he had not sown, of exacting tribute where he had contributed nothing.

Appropriating the Gifts of Nature

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."

The Last Remnant of Sorcery

THE LAST REMNANT OF SORCERY

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 Earth-for-All Calendar: April 13 -- Jefferson

Wherever there is in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on.

— THOMAS JEFFERSON (1785), Ford's Writings of Jefferson, Vol. VII., 36.

The Earth-for-All Calendar: April 10 -- Goldsmith

Where, then, ah, where shall poverty reside 
To 'scape the pressure of contiguous pride?
If to some common's fenceless limits strayed,
He drives his flocks to pick the scanty blade,
Those fenceless fields the sons of wealth divide
And e'en the bare-worn common is denied.

— OLIVER GOLDSMITH, The Deserted Village.

The Earth-for-All Calendar: April 4 -- Cardinal Vaughan

Without ties to bind the people to the land, they have been driven, especially of late years, in ever increasing multitudes to the towns. Here they have herded apart from the better classes, forming an atmosphere and a society marked on the one hand by an absence of all the elevating influences of wealth, education and refinement, and on the other by the depressing presence of almost a dead level of poverty, ignorance and squalor. They are not owners either of the scraps of land on which they live or of the tenements which cover them; but they are rackrented by the agents of absentee landlords, who know less of them than Dives knew of Lazarus.

— CARDINAL VAUGHAN, Inaugural Address to the Annual Conference of the Catholic Truth Society, Stockport; published in the St. Vincent de Paul Quarterly, New York, November, 1899; p. 286.

Goldsmith, a supplement to the "Earth for All" collection

"One only master grasps the whole domain,
And half a tillage stints thy smiling plain.

*   *   *   *   *   *

Ill fares the land to hastening ills a prey:
Where wealth accumulates and men decay:
Princes or lords may flourish or may fade;
A breath can make them as a breath has made;
But a bold peasantry, their country's pride,
When once destroy'd can never be supply'd.

*   *   *   *   *   *

A time there was ere England's griefs began;
When every rood of ground maintained its man;
But times are alter'd, trade's unfeeling train
Usurp the land, and dispossess the swain."

Goldsmith: The Deserted Village

Other excerpts from this poem appear in Crosby's Calendar, but this one does not.  I hereby add it!