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| Wealth and Want | |||||||
| ... because democracy alone is not enough to produce widely shared prosperity. | |||||||
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Soviet
Union
The Soviet Union, a decade or two ago,
had an opportunity to remake its economy. A number of Georgists
presented recommendations. You might also think about Iraq and
the US as you read these
An Open Letter to Mikhail Gorbachev (1990), signed by 30 economists
1. Rents are a taxable surplus.
I estimate that this taxable surplus constitutes 35% or more of the
national income in most nations with market economies, and more in
resource-rich nations. ...
2. The value of rent is huge. Every economy produces a large excess over wages. To be sure, not all of it is surplus. Some of it goes to replace capital that wears out each year. This is not part of the net surplus, nor income to the capitalist; it is a return of capital. ... 3. Rent will become huger yet when you abate taxes presently levied on production and exchange, because these now depress the rent of land. That is, in a tax-free market economy, the benefit of abating present taxes will lodge mainly in land rents. The taxable surplus simply shifts from one form to another. This is more than a simple shift of a fixed amount. When you substitute land revenues for existing taxes, the surplus actually grows, as if by synergy. You gain more revenue base than you lose, because existing taxes now suppress much latent production. Payroll taxes directly drive workers from taxable jobs to untaxed gains from crime. Abating those taxes will unleash suppressed economic giants, along with all the new surplus values their latent production will generate. "Monetarists" warn you that "there are no free lunches." In fact, however, good policy creates lots of "free lunches." It makes the whole greater than the sum of its parts. Imagine the benefits, alone, of turning people from destructive careers in crime to useful jobs producing goods. 4. Some of the benefit of abating existing taxes will lodge in higher after-tax wage rates, rather than higher rents. ... 5. Many varieties of natural resources generate rents. City land is the greatest single source. For example, one city, Vancouver, contains half the value of taxable property in B.C. - a province of 934,000 sq. kilometers, or 70% larger than France. ... read the whole article |
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Wealth
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www.wealthandwant.com
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... because democracy
alone hasn't yet led to a society in which all can
prosper
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