"Planet-friendly economic activity is currently suppressed in favour
of the promotion of land monopoly, speculation, urban sprawl and environmental pollution." - Bryan Kavanagh, ATO Land Valuer (ret)
... without a knowledge [of the law of rent], it is impossible to understand the effect of the progress of wealth on profits and wages, or to trace satisfactorily the influence of taxation on different classes of the community. – David Ricardo (1772-1823) "Ricardo's Law"
"The weakness at the heart of the capitalist economy,
which is structured to shove entrepreneurship aside
in favour of speculation which generates the maximum
gains out of land. That is the Achilles heel of capitalism." – Fred Harrison, (2010) "When's the Next Property Crash?" Excerpt:
Finally, relevant analysis of what caused the Depression of 2010. And since the cause was exclusively related to the economics of the land market, which brought the last business cycle to an end, this inevitably leads to the question: Will the next cycle also be driven by a land-led boom/bust?
The onset of the new realism began when Martin Wolf analysed my book 2010: The Inquest in the Financial Times (July 8). He summarised the mechanism that drives the economy to distraction in these terms:
“Buyers rent property from bankers, in return for a gamble on the upside. A host of agents gain fees from arranging, packaging and distributing the fruits of such highly speculative transactions. In the long upswing (the most recent one lasted 11 years in the UK), they all become rich together, as credit and debt explode upwards. Then, when the collapse comes, recent borrowers, the financial institutions and taxpayers suffer huge losses. This is no more than a giant pyramid selling scheme and one whose dire consequences we have seen again and again. It is ultimately, as Mr Harrison argues, a ruinous way of running our affairs.”
That message has to sink into the heads of economists if they want to guide the western economy out of the depression. But there is a long way to go, as evidenced by the confusion in Britain’s Office for National Statistics (ONS). It reports that the UK only escaped the relapse into recession by the scale of government money pump-priming. But the figures were not disclosed for two weeks, without explanation for the delay. Something is awry in the numbers game, and the ONS won’t allay suspicions by explaining what was odd about its data. >>>more
How to calculate land value
with the land tax as a component value
Estimating
Land Values by Ted Gwartney, MAI
Land Value Assessor (retired), Greenwich, Connecticut, USA
Characteristics of Land
Land, in an economic sense, is defined as the entire material universe outside of people themselves and the products of people. It includes all natural resources, materials, airwaves, as well as the ground. All air, soil, minerals and water is included in the definition of land. Everything that is freely supplied by nature, and not made by man, is categorized as land.
Land holds a unique and pivotal position in social, political, environmental and economic theory. Land supports all life and stands at the center of human culture and institutions. All people, at all times, must make use of land. Land has no cost of production. It is nature's gift to mankind, which enables life to continue and prosper.
Land's uniqueness stems from its fixed supply and immobility. Land cannot be manufactured or reproduced. Land is required directly or indirectly in the production of all goods and services. Land is our most basic resource and the source of all wealth.
Land rent is the price paid annually for the exclusive right (a monopoly) to use a certain location, piece of land or other natural resource. People receive wages for work, capital receives interest for investment, and land receives rent for the exclusive use of a location. Equity and efficiency require that the local general public, who created land value, should be paid for the exclusive use of a land site. That Payment is in the form of a land tax.
When considering world-wide economics, most people think that land rent contributes only a small insignificant portion of value. But as societies progress, land has become the predominant force in determining the progress or poverty of all people within a community. Land in major or cities is so costly that people are forced to move further away and travel great distances in order to get to work and social attractions. In the more developed countries of the world, land rent represents more than 40% of gross annual production. >>> more
PASSTAX explained: Rates and land tax are notionally already in the gross rent paid by a tenant, and cannot be ‘passed on’ again to the tenant.
Introduction by Bryan Kavanagh Land Valuer (ret) Australian Taxation Office.
Public capture of economic rent curbs land price bubbles. Therefore, replace taxation with public capture of economic rent to curb land price bubbles. ...The beneficial owner of land gets taxed, based upon its value—more correctly, pays the land’s annual net rent, because economic rents are not arbitrary taxes, as they cannot be passed on as taxes are.Therefore, there are virtually no deadweight costs flowing throughout the economy in prices under a system where land and natural resource rents are paid as an alternative to taxation. That part of the US property tax relating to land (not buildings) is actually economic rent. E.g. Houston, Texas, is a successful city which is attracting population and business, and has low median house prices because it has a high property tax (although it would be better if it taxed only the land values and not the buildings). If municipalities capture more publicly-generated land rent, there is less can be privately capitalised into high land prices, and taxes can be reduced concomitantly on businesses and workers. No more repetitive property booms and busts, because the lid is kept on real estate bubbles (which are basically land price bubbles).
A. THE CLASSICISTS:
1 Though the landlord is in all cases the real contributor, the tax is commonly advanced by the tenants, to whom the landlord is obliged to allow it in payment of the rent.
– Adam Smith "Wealth of Nations" Book 5, Ch 2
2 A tax on rent falls wholly on the landlord. There are no means by which he can shift the burden upon anyone else... A tax on rent, therefore, has no effect other than the obvious one. It merely takes so much from the landlord and transfers it to the State.
– John Stuart Mill (1806-1873) "Principles of Political Economy" Book 5, Ch 3, Sect 2
3 The power of transferring a tax from the person who actually pays it to some other person varies with the object taxed. A tax on rents cannot be transferred. A tax on commodities is always transferred to the consumer.
– Professor James E Thorold Rogers "Political Economy" 2nd ed Ch 21, p 285
4 A tax levied in proportion to the rent of land, and varying with every variation of rents... will fall wholly on the landlords.
– Walker's "Political Economy", p 413
5 The incidence of the ground tax, in other words, is on the landlord. He has no means of shifting it; for, if the tax were to be suddenly abolished, he would nevertheless be able to extort the same rent, since the ground rent is fixed solely by the demand of the occupiers.
The tax simply diminishes his profits.
– ERA Seligman "Incidence of Taxation" pp 244-245
6 A tax on rent would affect rent only: it would fall only on landlords and could not be shifted. The landlord could not raise the rent, because he would have unaltered the difference between the produce obtained from the least productive land in cultivation and that obtained from land of every other quality.
– David Ricardo, Principles of Political Economy and Taxation (1817),
Ch 10, Sect 62
7 The way taxes raise prices is by increasing the cost of production and checking supply. But land is not a thing of human production, and taxes upon rent cannot check supply. Therefore, though a tax upon rent compels owners to pay more, it gives them no power to obtain more for the use of their land, as it in no way tends to reduce the supply of land. On the contrary, by compelling those who hold land for speculation to sell or let for what they can get, a tax on land values tends to increase the competition between owners, and thus to reduce the price of land. – Henry George, Progress and Poverty (1879), Book 8, Ch 3
B.
SOME MODERN ECONOMISTS
1 Pure land rent is in the nature of a "surplus" which can be taxed without affecting production incentives.
– Paul A Samuelson, Hancock & Wallace, Economics - An Introductory Analysis (Australian Edition) Ch 28 p 595
2 .... the complete inelasticity of the supply of land means that a tax on land rent has no effect on price or output and therefore does not alter resource allocation...This outcome is in contrast to property taxes on buildings.
– Jackson & McConnell, Economics, 2nd Aust Ed pp 540-541
3 The (land) tax cannot be passed on to consumers... The failure of the single tax idea does not change the fact that a large increment of value does accrue to the owners of land, particularly in or near urban areas, due to the growth of the economy, without the landlord having to contribute any productive factor services in order to earn it.
– Richard G Lipsey, An Introduction to Positive Economics (3rd ed.)
4 Aside from its compelling appeal to the public's sense of justice, a single tax on land has another advantage over most other forms of taxation - it is neutral in its effects on production incentives and resource allocation.
– Waud, Hocking, Maxwell & Bonnici, "Economics" (Australian Edition)
C.
SO, FOR THE SAKE OF EFFICIENCY AND GREATER HOUSING AFFORDABILITY, WHY NOT PUT MORE REVENUE WHERE IT ULTIMATELY FALLS ANYWAY?
It is in vain in a country whose great fund is land to hope to lay the publick charge of the Government on anything else; there at last it will terminate. The merchant (do what you can) will not bear it, the labourer cannot, and therefore the landholder must: and whether he were best to do it by laying it directly where it will at last settle, or by letting it come to him by the sinking of his rents, ... let him consider.
– John Locke, (1691) Some Considerations of the Lowering of Interest.
Poverty is not only the lack of income and wealth but also the poverty of power. A key part of the poverty of power is to be defined as dependent: dependent on charity, handouts, welfare. Yet, it is the wealthy, not the poor, who are dependent on government subsidies.
To transform dependency into self-determination is the work of poor people's movements. To demonstrate the dependency of the wealthy on welfare as well as on the labor of the poor must be our collective work.>>> more
Why haven't economists eliminated poverty? Symptoms of economic suffering and injustice have reached 'developed' countries, with wide-spread poverty, health crisis, political unrest, and war. The cause of the economic crisis is also the cause of the energy and ecological crisis which is impacting quality of air, soil, water and food.
WAR is usually about confiscation of resources - land, minerals, etc., resulting in catastrophic involuntary displacement. The number of homeless (landless) people– refugees, asylum seekers, and internally displaced people worldwide, has exceeded 65 million for the first time since World War II.
The World Bank Group (WBG) is "required" to identify and monitor "Involuntary displacement" caused by environmental degradation, natural disasters, conflicts or development projects.
World Bank Group policy "prescribes" compensation and other resettlement measures to achieve its objectives and requires that borrowers prepare adequate resettlement planning instruments prior to Bank appraisal of proposed projects. >>> more
The Costs of War
A new report from Brown University on the 'costs' of war since 9/11. "This spending has largely been financed by borrowing. Unless the US changes the way it pays for the wars, future interest will exceed $8 trillion by the 2050s."
Overview:
The Costs of War Project, housed at Brown University, was launched by a large group of scholars and other experts in order to document the hidden or unacknowledged costs of the post-9/11 wars in Iraq and Afghanistan, and related violence elsewhere in the “war on terror.” The project has issued, among other reports, the most comprehensive recent estimates of the human toll and US budgetary costs of these wars. >>> more
SUMMARY
– Over 480,000 have died due to direct war violence, and several times as many indirectly
– Over 244,000 civilians have been killed as a result of the fighting
– 21 million — the number of war refugees and displaced persons
– The US federal price tag for the post-9/11 wars is over $5.9 trillion dollars
– The US government is conducting counterterror activities in 76 countries
– The wars have been accompanied by violations of human rights and civil liberties, in the US and abroad
About the author, Steven Aftergood, Federation of American Scientists
Steven Aftergood directs the FAS Project on Government Secrecy, which works to reduce the scope of national security secrecy and to promote public access to declassified government information. He writes Secrecy News, which reports on new developments in secrecy policy and provides direct access to significant official records that are otherwise hard to find. Mr. Aftergood has been the plaintiff in Freedom of Information Act lawsuits against the Central Intelligence Agency and the National Reconnaissance Office which resulted in the release of intelligence budget records. >>> more
According to the Refugee Council of Australia, in 2013, 51.2 million people were foracbly displaced due to conflict or persecution– six million more than in 2012. In 2016 the figure jumped to 65.5 million refugees.
Michael Kumhof, IMF Economist/Deputy Division Chief (2004-2014) and Senior Research Advisor, Bank of England (2015-Present), believes "an inclusive society is a safer society".
Like everything important, it's actually very simple...
"If we are born with equal rights, why are some people rich, while most people are poor? It is really about justice – economic justice. Social justice is a worthy aim, but without economic justice it is unattainable. There is a fairer way to share the earth’s bounty, so that the widening gap between rich and poor can be closed." – Leo Foley, 2011, elected Alderman, Hobart City Council, Tasmania, AU.
United Nations General Assembly
ISSUE IN FOCUS – “Housing is a RIGHT, not a commodity”
– “The vast amount of wealth has left governments accountable to investors rather than their international human rights obligations.”
Special Rapporteur on adequate housing as a component of the right to an adequate standard of living, and on the right to non-discrimination in this context.
See the report overview here
Download the official 2011 report in pdf format here.
When you've paid your rent,
you've paid your taxes. If governments would collect their necessary revenue in the form of site rents, resource rents, monopoly rents and licence rents —all of which, by reason of their origin, accrue preferentially to the rich — they would not find it necessary to impose 'progressive' taxes on earned income.
—Dr Gavin Putland, Land Values Research Group
Though the landlord is in all cases the real contributor, the tax is commonly advanced by the tenants, to whom the landlord is obliged to allow it in payment of the rent.
— Adam Smith Wealth of Nations Book 5, Ch 2
A tax on rent falls wholly on the landlord. There are no means by which he can shift the burden upon anyone else... A tax on rent, therefore, has no effect other than the obvious one. It merely takes so much from the landlord and transfers it to the State.—John Stuart Mill (1806-1873) Principles of Political Economy Book 5, Ch 3, Sect 2
Perfectly understated – A closer look at what has gone on suggests that
a large fraction of the increase in wealth
is an increase in the value of land,
not in the amount of capital goods. — Professor Joseph Stiglitz, Dec. 2014
"If, as claimed by vested interests, the land value tax can be passed on, why do not these representatives of special privilege pass the measure and allow their friends to pass it on? The reason is they know that the land values tax cannot be transferred." – E.J. Craigie, former South Australian politician, circa 1958.
Replacing property taxes and payroll tax By Dr Gavin Putand The revenue from payroll tax, property transfer duty, insurance duty, and the existing land tax could be replaced by a broad-based “land tax”, with no exemptions or thresholds, at a flat rate of about 1.5% per annum. ... Alternatively, the same revenue could be replaced by a property-vendor duty levied on the real increase in the land value since the last sale, at a rate of about 45%. ...
Either option would:
(i) create jobs by reducing or eliminating taxation of labour and its products,
(ii) encourage construction by reducing taxation of buildings,
(iii) make new infrastructure pay for itself through the ensuing uplifts in land values.>>> more
SHARE The EARTH (Aonymous)
On the central role 'space' plays in our economy. Our economic system doesn't recognise the central role 'space' plays in our economy. Adam Smith understood it…
David Ricardo understood it…
More than anyone else, Henry George understood it...
So we can use all the energy we want - but we can only use the space we have. There is no way to get around it.
The central component of our economy is... LAND So if you want to make the world a better place, or a better "space" you'd better get your head around that. Take famines for example.
We all know that some people starve to death.
Right now, at this very second, a child is dying from malnutrition.
Is it a problem of food resources?
No. It's a problem of distribution.
What do we use to distribute resources? ECONOMICS So, until we get the land question right, the world will never make sense. People will die of hunger, eco-systems will be destroyed in the name of progress. Entire species will be wiped out and one day that species will be us.
But we already have the solution. It's actually very simple! SHARE THE EARTH
SLRG Scotland: Scottish Land revenue Group "We want to pay for public services out of land rents instead of taxes so that Scotland can move from perpetual deficits to an annual £12 billion surplus. ... What is the link to Scotland's rampant inequality? We depend upon the sums to be removed from the public purse — after which public services can no longer be afforded. Thus, our addiction as home-owners leads directly to the growing use of the coping mechanisms of hopelessness in our communities. The spiralling sums we like to keep are socially-generated Economic Rent which we all produce together. If we allow its collection in place of current damaging taxes on incomes and trade, all areas of Scottish life will be positively transformed. For example, our children will be able to afford to rent or buy homes." There is no shortage of roofing tiles.
There is no shortage of cement.
There is no shortage of window glass.
There is no shortage of house bricks.
There is no shortage of doors.
There is no shortage of insulation.
The only crisis is one of land. A crisis created by the cynical interference of Government — all on its own.
Free-capital-gains-for-site-owners is the single flawed Government policy choice responsible for rendering land under houses unaffordable.
Choosing AGR/LVT will make quality homes plentiful and affordable for us and our children – to either buy or rent – by cancelling speculation in land.
We can choose to end the housing crisis NOW. And at the same time cancel damaging taxes on incomes and trade.
1.
The Danish welfare state and why it is hard to copy The support for the Danish welfare state and welfare system has always been strong in Denmark. One important reason is the high level of trust within the Danish society - another important reason goes way back in history. . .
Tax-funded benefits and services in Denmark
- Paid parental leave and child benefits
- Subsidized daycare centers
- Primary school, high school, vocational high school, business school as well as further- and higher education
- Student grants during youth-, further- and higher education
- Healthcare - general practitioners, hospitals and specialty care
- Psychological care for youth age 18-24
- Unemployment-, disability- and sickness benefits
- Housing allowance (rented housing)
- Early retirement for persons with disabilities
- State retirement pension (67+)
- Elderly care
- Public libraries
- Subsidised public transportation
- Subsidised cultural activities and sports/social clubs
- Roads and highways without tolls
- Police, courts and national defense
Happy tax-payers and broad public support
It is common to hear Danes - and foreigners alike - say that education and health care in Denmark is 'free'. However, this is a truth with some modification.
The Danish welfare system might be 'free of user charge' for e.g. public schools and doctors appointments meaning that free access is provided at the point of entry, but the welfare system in its totality is financed by way of progressiv taxation. . . .
Elements significant to the Danish welfare state
- Subsidized childcare from a very early age facilitating equal integration of women and men into the labour force.
- Broad-based and union driven work negotiations leveling salaries.
-Flexicurity labour market model: Easy to hire/fire, state funded unemployment benefits and active labour market policies.
-Stated funded training and skills upgrading of unemployed and people at the margin of the labour market.
Excerpt:
While the White House and lawmakers haggle over the terms of an emergency economic-stabilization package, Denmark has gone big—very, very big—to defeat the unprecedented challenge of the coronavirus.
This week, the Danish government told private companies hit by the effects of the pandemic that it would pay 75 percent of their employees’ salaries to avoid mass layoffs. The plan could require the government to spend as much as 13 percent of the national economy in three months. That is roughly the equivalent of a $2.5 trillion stimulus in the United States spread out over just 13 weeks. Like I said: very, very big.
In 2015, Finland planned to become the first European country to provide to each adult citizen a basic income, replacing its existing welfare, social security, and unemployment payments.
Two Commentaries: 1. Finland's Basic Income experiment – can it work?
Finland has become the latest country to propose a basic income for all. If put into practice, the scheme would eventually see all Finnish citizens receiving an 800 euro stipend, per month, tax-free.
How it would work
Social benefit systems are complex and more often than not bureaucratic. The Finnish proposal, and others like it, seek to simplify those expenses by doing away with complex benefit systems. >>> more
2. Cautionary note from Economics Professor Fred Foldvary: The adoption of basic income would be an economic revolution, but it will fail if the source of funds is even higher market-crushing taxes. A complete and successful revolution towards economic justice and prosperity requires the funding of basic income from a land value tax. The people of Finland have valued their national independence and social justice, and they would find the fulfilment of both values with a land-rent basic income. >>> more
"Yes, regulation was important, but it wasn't sufficient reason. If you look in other EU countries where they had broadly the same regulatory system, they didn't get the same kind of 'boom and bust'. So, what else did they have is the question. What was the real cause? I have to talk about home ownership incentives." >>> more
Avoid Ireland's mistake See synopsis of Chapter 8, Ireland: Serfs not citizens from the book Who owns the world? (2009) by Kevin Cahill – the first-ever landownership survey of all 197 states and 66 territories of the world.
Excerpt: Quia Emptores Act, 1290 AD
...The law that denied land ownership to the Irish, the Quia Emptores Act of 1290 AD, is still on the Irish statute book. It is this basic feudal law, restated, which placed the actual ownership of all physical land in the hands of the Crown. Subsequently this law was placed in the hands of the Irish Free State, thus making all ‘land owners’ in Ireland tenants of the State, having to pay rent in contradiction of their alleged status as ‘freeholders’. The underlying principle in Quia Emptores also underlaid the Acts of Settlement which evicted the native Irish ‘landowners’ and substituted English and Scottish settler landowners in the 17th and 18th Century. The basic argument in law was that the Irish ‘landowners’ were mere tenants of the Crown, and the Crown could dismiss and evict its tenants, legally, as indeed it could, under Quia Emptores and associated laws..... To be a citizen is to have the innate right to obtain and own land. There is a direct connection between the first human right, the right to life, and the right to land, which is seldom raised, especially by lawyers. >>> more
Michael Davitt (1846-1906),
"Father of the Irish National Land League" and one of the most influential leaders of Ireland’s independence movement, was an advocate of land tax:
‘I would abolish land monopoly by simply taxing all land, exclusive of improvements, up to its full value...In other words, I would recognize private property in the results of labour, and not in land.’
(Source: Some Suggestions for the Final Settlement of the Land Question, by Michael Davitt, 1902) See dedicated Michael Davitt page here
The Big Shift: Rethinking Money, Tax, Welfare and Governance for the Next Economic System
by Deirdre Kent (2017) SUMMARY
Abailable on Amazon
About
This important little book is a very dense read. The current growth-dependent economic system is not only broken must be completely replaced with a new paradigm.
The book gives a glimpse of a potential future economy going so well that many have a great deal of leisure time and the arts and sciences flourish. The children so well nurtured and the adolescents so hopeful that the state no longer has so much need for huge mental health budgets. Environmental groups, so used to fighting the system, find they can ease up, as the soil and water are being restored because the tax system is helping not hindering.
Based on the discussions of the New Economics Party of 2011-2015 to develop policy, the author argues that neither monetary reform nor tax reform are possible at central government level as the banks are too powerful these days. A change from an intrusive welfare system to a basic income should come from sharing the rents from land, natural resources and natural monopolies like airports, ports, railways.
To design an economic system to serve the planet in a post fossil fuel age requires new thinking on money design, land tenure and governance. Examples from history are used as evidence of stable and prosperous societies using these principles.
This leads to the conclusion that the most localised government should assume powers of money creation, land purchase and rule-making about taxes for trades in the new currency.
Selected REVIEWS
1.
Bryan Kavanagh, Property Valuer, ex Australian Tax Office “Brilliant! Well written and mind-bogglingly researched. Deirdre Kent certainly covers all bases and has a light easy style for such an intensive topic. Although there may be other solutions for land and money reform, I can’t fault her approach.”
2.
Juliet Adams at LIFT Library in Lyttelton It’s a very short book, 93 pages, and can easily be read in one morning if you don’t follow up on the many footnotes indicating useful backup information in books (some in LIFT) and online links.
Most of it will be easily understood by the common reader with no background in economics, because it is full of real examples of failures and successes of various methods of managing economic systems.
Unlike most books on the topic, the author presents on p.5 a summary of the book’s proposed new system, so you don’t have to plough through the background to reach the conclusions. Then you get the detailed proposals, with examples of past and present failures that cause the need for change, and successes proving the value of the suggestions. Climate change is one of the big risks the world faces, especially with the fossil fuel issue, bringing the need for action now in the economic world, if we want to successfully adapt to the next economic collapse. Buckminster Fuller is quoted: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” This book’s new model will include a money system, a tax-and-dividend system and a partnership model of governance. “
1. From bank-created money to a consciously designed and publicly created and controlled currency.
2. From ‘ownership’ of land and resources to sharing the values of the commons.
3. From domination to partnership.”
Why should a reader who is not an economist read this book?
“Though banks and oil giants have size going for them and ‘corporations rule the world’, their size is also their weakness……Smaller groups can be more nimble.” Think of the effectiveness in NZ of the waves of small-group action in the anti-smoking movement, and the Nuclear-Free groups. “If small communities reassert their right to govern and reclaim some major functions, the corporations won’t know who to sue first.”
And here in Lyttelton and greater Christchurch we already are stepping along the way of transition, for example with worker cooperatives, social enterprises, savings pools (and hopefully Christchurch dollars); in other parts of New Zealand other initiatives have been set up – land value rating (local tax) systems in Wellington and Napier, and a community land trust for Kotare village; and public banks rather than private have been hugely successful in the BRIC countries.
The book concludes with 20 brief statements of the positive results of this “BIG SHIFT”. My favourite is “No.2 – New life in industry, and a sea change in horticultural and agriculture methods.”
But I applaud all of them!
“Who Owns Your Nation?” (2015), Jeffery J. Smith
On why the disproportionate ownership of land (and, more importantly, its rent: the money we spend for the nature we use) remains at the foundation of social unrest: “Gene Wunderlich of the USDA in the 70s calculated that 3% of the US population own 95% of the privately held land. While ownership of land matters, even more important is ownership of rent—if you want to have a middle-class and no coup d’etats.” - Jeffery J. Smith, “Who Owns Your Nation?” (2015).
The wisdom of Jeffery J. Smith includes the term "Citizen Dividend" - representing an equal share of annual consolidated revenue surplus. He is a member of the US Society for Ecological Economics and Mensa, and the editor of The Progress Report and The Geonomist, which won a Greenlight Award. His writing credits include Terrain, Eco IQ, Car Free Times, USC’s Planning and Markets, the American Journal of Economics & Sociology, and numerous others.
The United States of America is the only country in the world where land title is not exclusively 'owned' by the government, harking back, for example, to the mid-1700s "Reformation Restoration colonies" when British colonial plantation land was granted in direct compensation for restoring the English monarchy under Charles II in 1660. "The politics of the people from top to bottom had been formed in the crucible of 'Oliver’s Days' – overturning the egalitarian values of the English Revolution." –Noeleen McIlvenna, 2009, A Very Mutinous People: The Struggle for North Carolina, 1660-1713, University of North Carolina Press.
(See excerpts from Professor McIlvenna's research findings here)
When the land rent is distributed equally among the people, and when there is no legal restriction or imposed cost on peaceful and honest enterprise, nor on the consumption of goods, then a basic income from rent, plus the easy ability to become self-employed, prevents firm owners from exploiting workers, and prevents landlords from becoming housing tyrants. The case for landlord and company tyranny by billionaires collapses when closely examined. But the critics cannot do such analysis, as they keep confusing capitalism as a free market with capitalism as today’s mixed economies. And when they do use the term “free,” they don’t delve into the natural-law ethic that gives freedom and liberty their meaning. The welfare-statist critique of markets is a failure to think things through.
— Dr. Fred Foldvary (1946-2012), Economist, San Jose State University & Santa Clara University
Collecting Economic Rent via Land Value Tax It's a tax, just like property tax, except that the improvement values are exempt [e.g. buildings]. Those who refuse to pay risk losing the land, just as with property tax. As all taxes depress land values, the question is not how much a land value tax can replace other taxes, but how quickly. It is important to allow the market to adjust, and also to minimize disruption for those who have built businesses based on other expectations. - Dan Sullivan, Saving Communities.org
Defining 'land' as 'capital' – A CATEGORICAL ERROR American economic history is best reported by Professor Mason Gaffney.
(Follow his BLOG)
Read an excerpt from his contribution to the best-selling book on The Corruption of Economics, explaining the mystery of persistent economic failure. The authors accuse the founders of neoclassical economics of distorting the science to protect vested interests and of preventing governments from adopting policies that would yield prosperity for everyone.
All taxes ultimately come out of economic rents, anyway, so if there is enough tax there must also be sufficient economic rent. The meaning and relevance of ATCOR is that when we lower other taxes, the revenue base is not lost, but shifted to land rents and values, which can then yield more taxes.– Professor Mason Gaffney >>> more
See detailed analysis of ATCOR here.
"I think the banks just want to speculate and feel thwarted.
They need to start looking at home loans like car loans. Do they speculate on the cost of roads? No, because it doesn't effect the value of the car, and is none of their business. It ought to be the same for land. If they can't stand that, maybe they should get into something more predictable, like becoming a professional gambler."- Scott Baker
"As speculative demand for land drops, demand for the use-value of land more than makes up. This is not just theory; empirical studies show that the medium-run boost to land value due to increased productivity outweighs the short-run decline from increased land efficiency. Therefore, when we say that land values will decrease, what we mean, to be precise, is that land values would decline relative to GDP (to wages and interest). Nominal values would actually increase in the long-run due to lower taxes on labor/production and due to productivity on communities using land efficiently. However, if high LVT were implemented all of a sudden, land values would probably decrease, but nobody has ever tried that, as far as I know. There is good reason to believe that there is much more land value than needed anyway. That comes partly from logic, partly from Stiglitz's "Henry George Theorem", and partly from a theory that all (or most) taxes come out of rent (ATCOR). LVT does not exactly cause people to use less land; it causes people to own less land that they aren't using. That means there would be in-fill, higher density in valuable locations, more economic activity and higher wages. Where are high land values found?" - Nate Blair: Comment on Facebook LVT open group, Nov. 5, 2013
Abomination of Public Finance By Nate Blair
There are three sources of public revenue: fees, fines, and taxes. Fines are pretty well understood, but the Georgist example would be a Pigovian "tax" on environmental damage. A fee is when the state charges $10 for a licence; charging $100 for the licence would be mostly a tax. Land value "tax" (LVT) is actually a user-fee, not a tax. LVT is the price landowners should pay for the privilege to exclude others from the value of locations in nature that the community is creating.
Currently, society donates the value of locational privilege to landowners mostly free of charge---in fact, we even pay them with *negative* LVT for agricultural land and with public investment projects that enhance land value. Government donates all that to landowners, mostly the wealthy, and pays for it with real tax on our labor and productive enterprise. Then, even though it sounds like the system could not get any worse, we are taxed again, this time by the very landowners we just donated to! When land/ground-rents are captured by private location monopolists, that is technically a private tax/toll. We are obliged to pay that private toll to access the very same benefits our hard work and taxes just created.
LVT simply reclaims our donations by charging owners of location for the annual market value of the privilege they are renting from the community.
We would use that revenue to remove taxes on good things like labor and to provide more of the social services that enhance locational value.
This is exactly the same method a mall uses to finance restrooms and security. Malls do not tax vendors a percentage of sales or for each employee hired---but what if they did? Imagine that the malls also allowed speculators to hoard perpetual, rent/fee-free titles to vendor-locations, preventing actual businesses from using the locations... making the mall look and work like shit, with location monopolists capturing the value of improvements for themselves, so that each time businesses worked harder, the economy improved, or the mall enhanced its services, the rent-seekers would increase the private tax to access mall locations.
THAT WOULD BE CRAZY!
The tragic truth is that what we are doing is much crazier. This has *deadly* consequences. Every time you read about the need for austerity or that there is not enough money for nice things, it is a lie: nice things increase land value in proportion to their niceness. What we are actually saying is that the power of parking lot owners is so great that we willingly condemn vast numbers of people to poverty, death of the mind, body, and spirit.
We can [save our communities], but not like this. Ricardo's "Law of Rent" makes that impossible in the long-run.
– Nate Blair, January 10, 2014. >>> Source
Is the parasitical 0.1% deliberately engineering this depression–its so-called form of “creative destruction”–because it no longer has the ability to repay its debts?
Was Alan Greenspan correct: “Household debt has created wage stability.”
Is this why average real wages declined over the last 40 years and we still haven’t realised it? Many people believe average real wages HAVE risen. [Check out the US Bureau of Labor Statistics, because you can’t even get this data from the Australian Bureau of Statistics!]
Have we morphed from constructive industrial capitalism into a fatal form of finance capitalism?
Is the parasites’ claim correct that further reducing wages is the ANSWER? [They know it’s NOT!]
Will people allow the parasites to continue sucking them dry?
[Apparently so!]
>>>full transcript
Summary Many of us already sense on one level or another that capitalism creates inequality and also engenders the ecological destruction of our planet. What we don’t seem to understand is why: For example, why does the economic system we call capitalism lead to financial insecurity for many, even for those who, by all accounts, shouldn’t have to worry about money? And why exactly are we destroying our planet in our frantic conversion of nature into digits and little bits of paper we call money?
One of the main reasons our current form of capitalism is no longer working is because the commons—the gifts of nature—have been privatized. This privatization of nature is one of the root causes of economic recessions, ecological destruction, as well as social and cultural decline.
All of nature is community wealth, including—and especially—land. People give value to land through the goods and services they provide to their communities.
For example, because people offer more goods and services in the city than in the countryside, urban land tends to be much more expensive than rural land. As communities become more attractive to live in, some property owners—mostly the financial institutions that finance them —then extract this value by making money from real estate (buildings, like cars, decrease in value, but land increases in value the more valuable a community becomes), and this extraction is one of the root causes of wealth inequality, ecological destruction, and even economic recessions.
Land—even undeveloped land—costs a lot of money in our society. Why is that? It’s because land has an intrinsic value to human beings: We all need land. And because we all need land, those that own land can make money by buying and selling land at the expense of other people who have to pay money to live on it. Under our current land ownership model, property owners only pay other property owners for land as well as the banks that finance property ownership.
While land can certainly be privately used, its value is created by the community and therefore belongs to the community. Land has to be owned in common, and whenever people use land, they need to reimburse their local communities for their exclusive use of it.
They can do this by making community land contributions for the land they use. A land contribution approximates the market rental value of land, and the rental value of land is a measuring stick that reveals the financial value of the benefits that land users receive from their exclusive use of land. In most nations around the world, land has already been privatized: If communities were to suddenly impose land contributions upon existing property owners, property owners would end up having to pay twice for their ownership of land—first to the previous landowner (from whom they bought land), and a second time to their local communities.
In order to transition from a land ownership model to a land stewardship model local governments and community land trusts would either have to financially compensate existing property owners for the land value portion of the properties in question or cancel their existing mortgage debts. Land users would then be required to share the value of land with all members of their community through community land contributions. And finally, these contributions would then have to be redistributed to all community members in the form of a Universal Basic Income to prevent gentrification, reduce wealth inequality, and create a truly fair economy for all participants. >>> more
Science explains and understands the world of matter;
philosophy explains and understands the world of spirit.
Economics is the meeting place of these two worlds.
Whilst the immediate concern of economics is policy in the “world of matter”, the key participant in economic life is the human being, whose ultimate purpose of participation is to do with the “world of spirit”. Hence economics meets these two realms, stands at their interface. Its task is to ensure the rule of justice. — Dr John Tippett, A Philosophers Take on Economics (2012)
Political Economy has been called the dismal science, and as currently taught, is hopeless and despairing. But this, as we have seen, is solely because she has been degraded and shackled; her truths dislocated; her harmonies ignored; the word she would utter gagged in her mouth, and her protest against wrong turned into indorsement of injustice. Freed, as I have tried to free her-in her own proper symmetry, Political Economy is radiant with hope. — Henry George, Progress and Poverty (1879)
1. Who's in Charge of Outer Space?
All extraterrestrial activity today is governed by a 50-year-old, Cold War-era treaty. Will governments agree on an update before the final frontier becomes the Wild West?
By Adam Mann
May 19, 2017 Excerpt: … In March, Goldman Sachs announced to investors that a single asteroid containing $25 billion to $50 billion of platinum could be mined by a spacecraft costing only $2.6 billion—less than a third of what has been invested in Uber.
“While the psychological barrier to mining asteroids is high,” the Goldman report concludes, “the actual financial and technological barriers are far lower.” In April, NASA selected Trans Astronautica Corp., an aerospace company based in Lake View Terrace, Calif., for $3.25 million in technology study grants. Among TransAstra’s NASA-approved projects: an asteroid-hunting telescope whose stated mission is “to start a gold rush in space.”
The final frontier is starting to look a lot like the Wild West. As more companies announce ambitious plans to do business beyond Earth, serious questions are emerging about the legality of off-planet activity.
Everything that happens in space falls under the purview of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies. This international agreement, also known as the Outer Space Treaty, turned 50 years old in January. More than 100 countries, including the U.S., Russia and China, are parties to the treaty. “It’s the Constitution and the Magna Carta of space law,” says Sagi Kfir, general counsel for Deep Space Industries, an asteroid-mining company based in Mountain View, Calif. “It’s so fundamental that its principles have become customary international law even for those countries that aren’t signatories.” ...
The treaty declares the moon and other celestial bodies to be res communis, meaning they exist for the common good and belong to no one. Michael J. Listner, an East Rochester, N.H., lawyer with a specialty in space policy, says the res communis designation means resources found in outer space aren’t for the taking. “Everybody can use the resource of a local park,” Listner says, “but they can’t just chop down a tree and walk away with it to build their house.”>>> more
The case for a new form of democracy
based on human rights to the earth as a birthright.
Public Finance Based On Early Christian Teachings
by Alanna Hartzok, Co-Director, Earth Rights Institute and UN NGO Representative, Christianity and Human Rights Conference
Samford University, Birmingham, Alabama
November 2004
This paper makes a case for a new form of democracy based on human rights to the earth as a birthright, linking this to the Judeo-Christian Jubilee Justice tradition and Old and New Testament teachings. It presents a tax fairness practical policy approach based on the ethical stance of these teachings.
The United Nations Millennium Declaration was adopted by the world's leaders at the Millennium Summit of the United Nations in 2000. Secretary General Kofi Annan has said that the Declaration "captured the aspirations of the international community for the new century" and spoke of a "world united by common values and striving with renewed determination to achieve peace and decent standards of living for every man, woman and child." >>>more
