|Wealth and Want|
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Rev. A. C. Auchmuty: Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)
Fred Foldvary: The Rent, the Whole Rent, and Nothing but the Rent
... The philosophy and economics of using rent for community services and sharing the rent equally is called "geoism." The economist Henry George popularized this idea, so it has been called "Georgism" after him, although the concept was proposed a hundred years earlier by the French economists calling themselves the Physiocrats, physiocracy meaning the rule of natural law.
The public and community collection of rent puts land at its most productive use, maximizing the wages of workers while minimizing sprawl as well as boom/bust cycles. We need to understand rent to fully understand the market process and the cause and remedy of many of today's social problems. Read the whole article
Mason Gaffney: Oil and Gas Leasing: a Study in Pseudo-Socialism
Thus, to define Distributive Socialism we need to define "surpluses." These are primarily rents from lands and resources given by nature. In an open tax jurisdiction, labor and capital are mobile and their supply is elastic; only land is fixed. Land rent is the basic taxable surplus. Where there is no land rent, an attempt to levy any tax can only abort production and land use, rather than collect the tax. Where is there no land rent?
The statement above expresses "The Physiocratic Doctrine" of tax incidence, harking back to Francois Quesnay, and even earlier writers like John Locke and Jacob Vanderlint. The Doctrine has staying power: it is used, for example, by Bogart, Bradford, and Williams writing in the National Tax Journal, December, 1992, on tax incidence in New Jersey. ...
Capital, unlike land, migrates among taxing jurisdictions. The return to reproducible, depreciable capital is not, therefore, generally a surplus. Capital differs from land. Capital has to be attracted, and, if domestically generated, dissuaded from emigrating. It is true that in the short run existing capital, if affixed to land, cannot be exported. Its returns thereby become a temporary taxable surplus -- hence the name "quasi-rent." Capital can still be dissaved, however, through neglect of maintenance, and will not be replaced. The demonstration effect of disappointing old investors' earlier expectations will have a high cost in repelling future investing by them and others. Old buildings, unmaintained, will shed blight on their surroundings. Non-replacement, in a dynamic world, guarantees early obsolescence. Capital finds many subtle ways of emigrating, or being disinvested and consumed. Its yields are not really a taxable surplus when we factor in the consequences of trying to tax them: withering away of the community.
The Physiocratic rule, which may seem novel and subtle in tax discourse, stands out nakedly whenever landowners, public or private, negotiate leases. If a lessee is required to pay a share of his gross sales (a royalty), he compensates by offering that much less on the "bid variable," (often a "bonus" paid up front). Lessors and lessees understand this well: it is central to all their negotiations. Whatever the twists and turns, the rule of compensation applies: take more here, get less there. The lessee is to supply labor and capital at full cost; acquiring use of land will yield him a surplus above costs. That surplus is all he can and will pay for. The maximum of economic surplus is the rent of land in its highest and best legal use. ...
...Distributive Socialism, then, means tapping land and resource rents for the public. On the public domain, acknowledged to be public property, the institutional basis of Distributive Socialism is fully in place. We need only apply a good leasing system, keeping rent payments up to current values. On fee simple lands, Distributive Socialism means and requires modifying tax systems to rifle in on rents.
Rifling in is essential. Recall, the Physiocratic rule of compensation says all taxes are shifted to rents anyway; some take that to mean any tax will do. However, "broad-based" taxes like VAT or a general sales tax sterilize lands that would be just marginal before tax. They also abort all marginal and near-marginal activity on all lands, for marginal inputs (where marginal cost equals price) generate no rent. That in turn forces rates to be kept low, to avoid destroying half the economy. Such taxes socialize all the rent from lands that are now made marginal after-tax, but leave most rent untapped on the most rentable lands and resources. Taxes that rifle in on rent, on the other hand, inherently exempt marginal activity. They may be set at very high rates, tapping more of the taxable surplus, or rent. Read the entire article
1. Common Property in Land is Compatible with the Market Economy.
2. The Net Product of Land is the Taxable Surplus
A. To socialize the taxable surplus, land rent, effectively, you must define and identify it carefully, and structure your taxes to home in on it.
B. Taxable surplus is also what you can tax without driving land into the wrong use.
C. To tax rent we must be sure there is rent to tax, and we must adopt public policies to husband and maximize it, and avoid policies that lower and dissipate it.
i. Avoid "perverse subsidies."
ii. Avoid letting lessees of public land conceal their revenues.
iii. Avoid letting lessees or taxpayers pad their costs to understate their net revenues.
iv. Avoid dissipating rent by allowing open access to resources like fisheries,
v. Avoid trying to distribute rents to consumers by capping prices below the market.
D. Raising output by removing tax bias
E. Maximizing public revenue.
F. Sustaining the tax base
3. Taxing the Net Product of Land Permits Untaxing Labor
4. Taxing the Net Product of Land Permits Untaxing Capital
5. Taxing the Net Product of Land Provides Ample Public Revenues: a Master Solution to Many Problems
A. Public revenues will support the ruble.
B. Your public credit will, of course, recover to AAA rating when lenders see that there is a strong flow of revenue to pay public debts.
C. Never again need you bend to any "advice" or commands from alien lenders, nor endure patronizing, humiliating homilies from alien bankers, nor beg any foreign power for aid.
D. If you again feel the need (as I hope you will not) to rebuild your military, you will of course require strong revenues.
E. Strong national revenues are required to unite Russia, and keep it one nation.
1. Common Property in Land is Compatible with the Market Economy.
You can enjoy the benefits of a market economy without sacrificing your common rights to the land of Russia. There is no need to make a hard choice between the two. One of the great fallacies that western economists and bankers are foisting on you is that you have to give up one to enjoy the other. These counselors work through lending and granting agencies that seduce you with loans and grants to learn and accept their ideology, which they variously call Neo-Classical Economics, or "monetarism," or "liberalization." It is glitter to distract you and pave the way for aliens to acquire and control your resources.
To keep land common while shifting to a market economy, you simply use the tax system. Taxation is the form that common property takes in a monetary, market-oriented economy. To tax is to socialize. It's then just a simple question of what you will socialize through taxation, and how; but in the answers lie success or failure.
Not only can you have both common land and free markets, you can't have one without the other. They go together, like love and marriage. You need market prices to help identify land's taxable surplus, which is the net product of land after deducting the human costs of using it. At the same time, you must support government from land revenues to have a truly free market, because otherwise you will raise taxes from production, trade, and capital formation, interfering with free markets. If you learn this second point, and act on it, you will have a much freer market than any of the OECD nations that now presume to instruct you, and that are campaigning vigorously to make all nations in the world "harmonize" their taxes to conform with their own abysmal systems.
The very people who gave us the term laissez-faire -- the slogan at the core of a free market economy -- made communizing land rents a central part of their program. These were the French economistes of the 18th Century, sometimes called "Physiocrats," who were the tutors of Adam Smith, and who inspired land reforms throughout Europe. The best-known of them were François Quesnay and A.R. Jacques Turgot, who championed land taxation. They accurately called it the "co-proprietorship of land by the state."
12. George and religion. Georgist value judgements come from the world’s great religions. George’s overt religiosity contrasts sharply with the militant atheism of Marx. This did not stop the Vatican under Pope Leo XIII from putting George’s works on the Index of Forbidden Books, where they evidently still remain. Leo excommunicated George’s ally, Fr. Edward McGlynn, and let Archbishop Michael Corrigan of New York order his flock to vote against George for mayor, 1886. George was not anti-Catholic – he married one. It was Pope Leo who was anti-Georgist. (Gaffney, 2000, and works there cited). At the same time, George’s icons included Enlightenment Deists like the French Physiocrats, Paine, and Jefferson, and Radical Republican land reformers like Lincoln, and Sen. George Julian of Indiana.... read the whole article
Albert Jay Nock — Henry George: Unorthodox American
Fred E. Foldvary — The Ultimate Tax Reform: Public Revenue from Land Rent
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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper