We say that all the social
difficulties we see here, all the
social difficulties that exist in England or Scotland, all the social
difficulties that are growing up in the United States--
- the lowness
- the scarcity of employment,
- the fact that though labor is
the producer of wealth, yet everywhere the laboring class is the poor
--are all due to one great
primary wrong, that wrong which makes
the natural element necessary to all, the natural element that was
made by the Creator for the use of all, the property of some of the
people, that great wrong that in every civilized country disinherited
the mass of men of the bounty of their Creator. What we aim at is not
the increase in the number of a privileged class, not making some
thousands of earth owners into some more thousands. No, no; what we
aim at is to secure the natural and God-given right to the humblest
in the community--to secure to every child born in Ireland, or in any
other country, his natural right to the equal use of his native
land. Read the whole speech
Jeff Smith: Giving Life to the
Property Tax Shift (PTS)
John Muir is right. "Tug on any one thing and find it connected
to everything else in the universe." Tug on the property tax and find
it connected to urban slums, farmland loss, political favoritism, and unearned
equity with disrupted neighborhood tenure. Echoing Thoreau, the more familiar
reforms have failed to address this many-headed hydra at its root. To think
that the root could be chopped by a mere shift in the property tax base
-- from buildings to land -- must seem like the epitome of unfounded faith.
Yet the evidence shows that state and local tax activists do have a powerful,
if subtle, tool at their disposal. The "stick" spurring efficient use of
land is a higher tax rate upon land, up to even the site's full annual
value. The "carrot" rewarding efficient use of land is a lower or zero
tax rate upon improvements.
Economic Problems to Solve
Taxing built-value penalizes construction and maintenance
of buildings. This deadweight loss on the local economy constrains housing supply
and raises land values, driving speculation. Fewer people can then own parcels
for homes and businesses, and debt
Environmental Problems to Solve
Rus (rural regions) provide
resources as urbs (cities) provide services. Yet neither does so efficiently
now. Allowed by a present property tax that takes aim at buildings while treading
lightly on sites, owners of sites and resources both overextract and withhold
appropriate land from use, speculating on a higher future return. Vacant and
underused sites waste on the average about 22 percent of city surface. Using
land less than optimally means more land must be
used. Clark County, Washington, combines the empty storefronts, vacant
lots, run-down buildings in Vancouver, the county seat, with one of the fastest
growth rates in the nation. The inflated prices are hardly affordable by governments
intending to purchase open space;
hence parks are smaller and fewer.
Political Problems to Solve
To manage growth, counties adopt boundaries and other
restraints -- which are neither effective nor politically
stable. The once "green" Oregon legislature, for instance, in '95 and '97 (controlled
by Republicans) passed over ten bills to drastically weaken long-established
land use laws. Also under siege is the property tax, formerly the largest
source of public revenue in the US (back when the federal and state governments
were much smaller). Voters in many states have passed caps and rate reductions,
spurring a search
for alternative revenue sources.
Equity Problems to Solve
America is rapidly turning back the clock; we are on
the path to becoming a two-class society struggling on a ravaged planet. For
the first time since European settlers carved out their own country, tenants
outnumber owners. Farm workers outnumber farm owners. Growers under dictatorial
contracts to food processors outnumber farmers still calling their own shots.
Tenants, as in Portland, Oregon, outnumber homeowners. That gulf widens dramatically
when defining owners as those not under a mortgage. In communities of rapid turnover,
crime invades along with government corruption.
Previous Reform Attempts that Failed
To bolster their local economies and fatten their tax
base, local governments compete to attract large new employers. Hoping to recoup
down the road when businesses pay full property taxes, elected officials offer
such inducements as five-year abatements and low system development charges.
Yet each locality must outdo others' incentives. Enterprise zones and tax privileges
major subsidies that would otherwise generate substantial tax revenues.
Already, Washington, Oregon, and other states employ a nonregulatory means to
reward preservation of unbuilt-upon land. They assess farm and resource lands
at current use rather than at market value to avoid pressuring owners to develop.
However, as long as demand for land persists, and the more central locations
are not offered in the market, then the temptation before farmers to sell out
to developers also
Our Different Idea
To send a clear message to new businesses that their
growth will not be unnecessarily impeded, government can permanently shift taxes
off sales, income, and buildings and onto land. Since taxing land lowers its
cost, business could pay this greater land tax from what otherwise would be spent
on purchasing land. This higher land levy would remain affordable as long as
owners use their land
Developers argue that abundant land lowers its price and thus the property tax
burden. While true, newly-available land need not be current open space. Without
baring the countryside to new development, both land price and the property tax
can be lowered. The price of land drops when the tax rate on land is raised.
And yet this higher rate, if coupled with a lower or absent rate on buildings,
does not swell the
property tax burden of most residents. Indeed, this property tax shift
(PTS) is progressive, providing relief for most residents. And by taxing
land, society impels owners who had been speculatively withholding or underutilizing
theirs to develop or offer their parcels for development. Hence the newly-available
land comes from recycled
sites, not from open space.
The PTS not only lowers the price of land, it also lowers the cost of buildings.
Untaxing structures, besides reducing their cost, also augments their supply.
More buildings means lower prices and rents. As the prices of both buildings
and land drop, more people are able to
purchase a home, apartment, or condominium.
Ethically, the PTS simplifies the revenue system, leaving fewer decisions to
be made by politicians in favor of their backers. All the essential facts are
open to public scrutiny: the land's owner, value, use, and levy. And since mere
speculation would no longer be profitable, owners would have less monetary motive
to try to unduly
influence the political process. ... read the whole article