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Louis Post: Outlines of Louis F. Post's Lectures, with Illustrative Notes and Charts (1894) — Appendix: FAQ
Charles B. Fillebrown: A Catechism of Natural Taxation, from Principles of Natural Taxation (1917)
Ted Gwartney: Estimating Land Values
THE SOURCE OF PUBLIC REVENUE
What are the factors that cause land to have market value and to whom does this market revenue advantage properly belong? Land has market value for three reasons:
Land rent is the price that people and businesses are willing to pay for the exclusive right to possess and use a good land site for a period of time. For example, people prefer to use sites of good location because it gives them an advantage of spending less time in travel by being near what they choose to do and where they work. A businessman can sell more goods at a site where many people pass each day, compared to a site where only a few people would pass.
The collection of land rent should be used as revenue, by the community for supplying public needs. This returns the advantage an individual land possessor receives from the exclusive use of a land site, to the balance of the people who live within the community and have allowed the land possessor the exclusive use of the land site for the period of time.
It is the responsibility of the local communities to insure that the market rent of land is collected for public purposes. When a major part of land rent is not collected, which is the case in most of the world today, land title holders obtain rights to sell the value of the public improvements which were made by the whole community. The community added to the market value of land by making improvements which increases demand and rent for the land. The longer the possessors hold the land out of use the greater will be the bonus they obtain.
By prohibiting people from using good land, the possessors force the premature use of other less desirable land, which is more distant from the city. This raises the cost of community improvements and the rental value of the unused, but better located, land. This precipitates the degradation of the rural environment by using city land inefficiently -- and creates huge unnecessary pressures on the natural environment.
A problem that we face is that cities throughout the world are spreading out and using land prematurely which is not needed and should not be used. That is because failure to collect land rent subsidizes the waste of natural resources and clutters the environment. Cities that collect the full rental value of land are more compact and provide greater and less costly amenities for their citizens.
Any moves to enact good government principles without collecting the full market rent of the land may result in a failure. People are guided by the profit motive. When people can make a larger profit by doing nothing, but keeping the land they possess out of use for a long period of time, they will do so. When the community collects the full market rent of land, they eliminate the motive for keeping land out of efficient use, because the unearned profit has been collected as public revenue.
Efficient land use appeals to all people because it surpasses the political constraints of most people. Everybody understands that the earth belongs equally to all people. They want a clean environment on earth and to leave a healthy inheritance to the future generations, regardless of their political viewpoints.
The major function of a competent city government is to provide good community services by collecting the land rent created within the community to ensure the efficient use of land and equal opportunities for all of its citizens. Transportation is an important function of government which would facilitate the creation of a compact city, where people can easily find the facilities they desire for education, commerce, religion and recreation. Good land use, with the freedom of individuals to achieve the highest and best use of land, would ensure a desirable community. A compact city would reduce the need to invade the wilderness and devastate the environment. ... Read the whole article
Fred E. Foldvary — The Ultimate Tax Reform: Public Revenue from Land Rent
Creating a More Productive Economy
The ideas we espouse are attractive not only for their embodiment of principles of justice, but also because they can be expected to lead to a more productive economy.
Economists agree that the imposition of taxes generally retards an economy. The reason for this is that with almost all taxes, it is possible for a tax payer to reduce total tax collections by doing less of whatever is taxed--work less, spend less, save less, etc. This means that taxes generate an incentive to be less productive.
With fees for the use of government-assigned opportunities, on the other hand, the only thing that a person can do to reduce the amount of money that he or she pays is to use fewer of these opportunities. But then the opportunities can be used by someone else, who will pay the fees, and total public revenue will be unchanged. There is no possibility reducing total government revenue by being less productive. Thus these fees can be collected without dragging down the economy in the way that existing taxes do.
Our ideas provide for the natural financing of any worthwhile public expenditure that makes a particular area more attractive or productive--parks, freeways, subways, sewer systems, etc. These public expenditures raise the rental value of land in their vicinity, and thereby raise the fees that can be collected for using the land. If the activity is worthwhile, the increase in rental values will be sufficient to pay for the activity.
Another way in which our ideas promote a more efficient economy is by eliminating the opportunity grow rich by having government promote one's own interest at the expense of others. Such distortions of the political process can occur either by persuading a government agency to spend money in a way that raises the value of land that one owns while others foot the bill, or by persuading a government agency to prohibit others from doing what one is permitted to do. In both kinds of cases, the person who promotes his or her own interest has no reason to take account of the costs that are thereby imposed on others, and typically these costs to others are greater than the self-seeking benefits. This makes the economy less productive.
Furthermore, the very possibility
of growing rich by manipulating
government action draws talented people into the effort to manipulate
government decisions, when they could be employed doing something
useful. ... Read the whole article
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.
The PTS reduces the profit from land, making land use less of a political football. Developers will have less money to spend on distorting the democratic process. Then society can more easily resolve land use issues. ...
A big problem needs a big solution which in turn needs a matching shift of our prevailing paradigm. Geonomics -- advocating that we share the social value of sites and natural resources and untax earnings -- does just that. Read the whole article
Dan Sullivan: Are you a Real Libertarian, or a ROYAL Libertarian?
Even the indirect effects are substantial. Land speculations gone sour chew up inner cities, so poor people turn to crime (if drug selling and prostitution be crimes) and the government gets an excuse to beef up the police state.
Politically connected real estate
interests see that they can buy
up land in the boondocks for a pittance and then get other taxpayers
to build them a superhighway, increasing the value of their holdings
by orders of magnitude. With land value tax they would have
ultimately paid for their own highway or more likely would not have
had it built in the first place.... Read the whole piece
Bill Batt: How Our Towns Got That Way (1996 speech)
There were many arguments to be made for the classical tradition, the result of which would be to rely upon payment of rent of land according to its value to society. George recognized that land value is largely a function of how society has elected to invest in any general neighborhood; there is no argument for any one titleholder to reap the reward of what others have invested. Gaffney points out that, from the standpoint of economic theory, the framework had the following virtues: ... read the whole article
Weld Carter: A Clarion Call to Sanity, to Honesty, to Justice (1982)
Back in the early days of this century, Winston Churchill saw and recorded an example of this. There had been a ferry fare over the river Thames for the common laborers who lived on the wrong side of the river to pay in order to get to work. A spirit of nobility prompted the absorption of this fare by the City, and almost immediately rents in the working class area were increased by the same amount as the fare had been. When this thing was done, the guys who got the benefit were not the poor working class people, but the owners of the homes in which they lived, or, more accurately and more critically, the owners of the land on which those homes stood. The laborers were thus charged a higher rent, and that rent diverted the benefit from the seemingly intended beneficiary (i.e., the public) to landowners in the affected area.
This occurs every day in this country. A new road is built, or a superhighway is constructed, which makes access to a particular site much easier. We tell ourselves that we justify this as an expenditure of public funds by the benefits that accrue to the traveling public; but the benefits go, in the form of higher land prices and rents, to the owners of the sites that are served by this new road. If you doubt this, consider the jockeying for the insider information or for influence over the selection.
Robert Caro, in his biography of Robert Moses, recalls the time in the early 1920s that Moses suggested to the authorities the building of a causeway from the Long Island mainland over to Jones Island. This proposal was rejected outright by the Long Island Park Commission. Some months later, Moses presented them with a drawing showing precisely where this causeway would run, and, after a suitable period of during which these public employees could buy up the land along the proposed highway, he resubmitted his proposal. This time, they officially approved the suggested construction.
In the town of Antioch, Illinois, there were two developments underway almost simultaneously. In the one, roads were provided, together with water and sewer lines, but no sidewalks; in the other, just across a main road from the first, the mayor of the city had storm sewers, curbs and sidewalks installed at public expense, for which of course, any prospective buyer or tenant would gladly pay for use of that land the higher price these added benefits provided. Any reader will recognize this chain of events and set of economic relationships as being the course of everyday life and business at the local, state and national level. The cynic would say that a primary motivation for entering local or even national politics would be the opportunity for personal gain offered daily by publicly financed improvements. ...
Thus, the benefits of a tax-supported public work accrued once more not to the benefit of the public at large, but to that of a very limited and narrowly defined class, those who were rich enough to own land in that location.
There are undoubtedly many other
problems to be resolved before
the ills of our society are cured; but what many do not recognize and
understand is the primacy of the adoption of land value taxation over
all these other corrections. The reason for that can be very simply
stated: If any of these other measures already adopted have no
merit and have only added to the burden of our problems, then they
are disqualified at the outset. On the other hand, if they are of
themselves beneficial, any benefit from them will be immediately
capitalized into land values and will therefore exacerbate the very
problems which otherwise might be helped toward a cure. Thus it
is that our first step toward any possible remedy for the awesome
plight into which we have been led increasingly over the recent years
must be the adoption of land value taxation. ... read
the whole essay
Mason Gaffney: Cannan's Law
Public spending should feature "Citizen Dividends." These are social dividends limited to citizens, thus discouraging free or illegal immigration that would dilute the dividends and erode their voter support. (The degree, pace, and conditions of legal immigration is an issue to treat separately.) Dividends take many forms other than outright per head cash grants. The G.I. Bill was a splendid example. Social Security payments are another. School equalization payments based on a.d.a. are another. A state or province cannot easily restrict benefits to its old time citizens, as Zobel showed -- but a nation can.
At the same time, there should be
no more capital grants to
localities for public works. When cities pay for their own public
works they must attract population to justify the capital outlays and
service the debt.... read the whole article
The federal aid in Canada goes
to provinces, whereas in the
United States it goes to specific cities, The U.S. Congressman likes
to have his fingerprint, as they say, on every dollar that goes from
Washington. The Canadian provinces are much larger and stronger,
and fewer than the American States. There is much more horizontal
balancing among provinces in Canada than there is among States in the
United States. The Maritimes for instance get about 50% of their
provincial revenues from equalisation entitlements. Fifty percent.
Nothing in the United States matches that. In fact, if you look at
the U.S. Constitution, it's quite specifically planned to prevent
that sort of thing. Equalisation is not what the Founding Fathers had
in mind. On the contrary, there is a provision which you may be
familiar with which says that direct taxes will be apportioned among
the States according to their respective populations. So in the
States the idea has been: Tax the States according to their
population and then give the money back according to political
power. In the United States Senate it means that the smallest
State has just as much clout as the biggest State or would have if
their senators weren't so merchantable. (I mean, in California when
we need something we just look to Nevada or one of those places for a
Senator who is having difficulty raising funds for his next election.
But that's another story.)... read the whole article
Mason Gaffney: George's Economics of Abundance: Replacing dismal choices with practical resolutions and synergies
Fostering economy in government in the very process of raising revenue
Anti-governmentalists often identify any tax policy with public extravagance. Georgist tax policies, on the contrary, help save public funds in at least two general ways.
a. Putting the unemployed to work saves many public costs, like welfare, obviously, crime-fighting, and, ultimately, putting down civil disturbances and insurrections.
At the same time, these policies deflate the "rent-seeking" motivations of land speculators to sue for state and federal aid. Under George's scheme, the unearned increments secured by "rent-seeking" lobbying for public works would be taxed away.
In the longer run it seems
reasonable to expect that more genuine
productive job opportunities at home would reduce the pressures for
military spending, at least those portions which are strictly
boondoggling of a make-jobs nature. ... read the whole article
Mason Gaffney: Full Employment, Growth And Progress On A Small Planet: Relieving Poverty While Healing The Earth
Territorial expansion: Regional cross-subsidy, with subeconomic extension of public works and services. George’s critique of land speculation came to be focused on “Speculator Type #1,” who withholds good lands from timely use. Georgists have neglected to condemn the counterpart “Speculator Type #2,” who acquires marginal lands cheaply, and then lobbies public agencies to extend roads, utilities, military and police protection, and other public services to them, below cost.
Some Georgists may even see this as a legitimate way, and an easier way, to combat the artificial scarcity of land that Speculator Type #1 causes – a way of perpetuating the “frontier safety-valve.” However, it unbalances development severely: too much roading, et al., too little use of the land thus “opened up.” Some taxpayer must pay for the roading et al. If the taxes are activity-based or improvement-based (i.e. anything but land taxes) they will sterilize marginal land, and lower the intensity of use of all land.
This is a pervasive, immanent bias in most of our institutions, from city departments of public works up through state and provincial public utilities commissions and highway departments, clear to the Pentagon, World Bank, and CIA. Types #1 and #2, in tandem, create our form of Imperialism, that perpetual quest for Lebensraum that is our curse.
In my political experiences, one collects more cuts and bruises combating Speculators Type #2 than Type #1. I was, for example, able to lead the local countywide campaign against Howard Jarvis’ “Proposition 13” without being seriously punished, but a few years later when I led the campaign against southern California’s favorite public water-works boondoggle, the “Peripheral Canal,” my academic and professional world collapsed about me. Earlier, when I joined the furor against American imperialism (Gaffney, 1971) and the myth of infinite natural resources (Gaffney, 1972), I became persona non grata at Resources for the Future, Inc., where I then worked. In British Columbia, 1975, I learned that the self-styled “socialist” government under Premier David Barrett was unwilling even to consider withdrawing any of its expensive cross-subsidies to speculators Type #2, and resented me for raising the issue. The moose-pastures of northern B.C. “are a mighty empire,” they told me, and the rich retirees on the Gulf Islands are important constituents who should have both their subsidized ferry service and their exclusionary zoning to keep hoi polloi from sharing it. I have war stories, but the objective point is that the socio-political bias for territorial expansion is even stronger than the bias against cultivating, intensifying and renewing our internal frontiers. The Georgist dream of taxing central rents to finance public services becomes a nightmare when the public money is dissipated in enriching Speculators Type #2. This kind of spending not only dissipates rents, and wastes capital, at the same time it despoils the environment. Worst of all, as the subeconomic land development proceeds, each new settlement makes a platform for the next, so there is no end to it short of the limits of capital and of Earth. It is perhaps fortunate for Earth that, historically, the limits of capital have been reached first, at the ends of bursts of territorial overexpansion. ... read the whole article
Nic Tideman: A Bill of Economic Rights and Obligations
Nic Tideman: Revenue Sharing under Land Value Taxation
Charles T. Root — Not a Single Tax! (1925)
Frank Stilwell and Kirrily Jordan: The Political Economy of Land: Putting Henry George in His Place
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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper