Could other taxes on use of nature get passed this way?
Powerful people push a Citizens Dividend
| We trim, blend, and append three 2009 articles from: (1) the Associated Press, June 30, on home prices by J.W. Elphinstone; (2) New York Times, July 4, tax appeals by Jack Healy; (3) California Governor Arnold Schwarenegger, May 22, in an open letter to AB 32 Economic and Allocation Advisory Committee; and (4) back in 2008, the Wall St. Journal, June 4, on dividends by Robert Reich, professor of public policy at the University of California at Berkeley and former Secretary of Labor under Bill Clinton. |
by Elphinstone, by Healy, by Schwarenegger, and by Reich
- Home prices drop 18.1%
Is the descent of home prices moderating? While the Standard & Poor's/Case-Shiller index of 20 major cities tumbled by 18.1% in April from the year before, it marked the third straight month the decline was not a record.
But the number of homeowners at least two months behind or in foreclosure jumped in the first quarter from the previous quarter.
Defaults from borrowers with good credit contributed to much of the increase in seriously delinquent loans, echoing data last month from the Mortgage Bankers Association.
And nearly one in four borrows who received a mortgage payment reduction fell behind again within six months.
The 20-city index is off almost 33% from its peak in 2006 Q2, which means home values are now around 2003-levels.
In Phoenix and Las Vegas, home prices have shrunk more than half their value since their peaks.
JJS: Thus governments that depend upon taxing land value lose revenue.
- Tax Bill Appeals Squeeze Governments
Homeowners across the country are challenging their property tax bills in droves as the value of their homes drop.
According to the National Association of Counties, 76% of large counties said that falling property tax revenue was significantly affecting their budgets.
Municipalities are laying off employees, renegotiating labor contracts, freezing salaries, and cutting services.
The call for counties to reassess land values is loudest in states where taxes are highest, or the housing crisis has hit the hardest.
The appeals are coming not just from individual homeowners. Condominium associations and entire subdivisions are pushing for new tax assessments, as are companies that own office towers, industrial parks and shopping malls.
JJS: The problem is not that residents pay the public treasury too much of the socially-generated value of their land. The problem is they pay too little, and too much tax on their buildings, businesses, and earnings. See, when the tax on land (half the property tax) is low, the price of land becomes high, inflated by speculators, creating a bubble that must burst. The solution is to pay in those ground rents yet get back an equitable share. It’s a formula other taxists promote.
- CA Gov. Arnold Schwarzenegger’s Letter
Assembly Bill 32, the Global Warming Solutions Act of 2006, requires California to reduce greenhouse gas emissions to 1990 levels by 2020. A key element of that plan is the creation of a California cap-and-trade program. Consider various options for freely distributing or auctioning allowances potentially worth billions of dollars and, if auctioned, for distributing or deploying auction revenues. There is one idea in particular I would like you to explore: returning the value of allowances back to the people, in the form of a rebate or dividend, in order to minimize the cost to California consumers and maximize the benefits to the state’s economy.
- How About a Cap-and-Trade Dividend?
A carbon auction -- the equivalent of a carbon tax -- makes more sense than a system that allocates permits on the basis of how much greenhouse gas a company already emits. Setting initial allocations by emissions invites every big corporation to fight for the biggest possible allocation and claim the largest emissions. The resulting free-for-all would be a bonanza for K Street.
One likely result would be the issuance of so many permits as to break the overall cap. The EU gave initial permits away for free, and many companies discovered ways to grab even more of them than their previous emissions would warrant. Since the European Union adopted the system three years ago, carbon emissions are actually up by several percentage points.
While carbon auctions invite far less political maneuvering, they raise another problem. The market value of all permits would be about $7 trillion by 2050. With that sum, some senators propose subsidizing alternative energy; lobbyists for ethanol, nuclear, and coal are already salivating.
Instead, cycle auction revenue back to citizens. And rather than launch another endless debate over how and to whom -- a payroll tax cut for people earning under the median wage, or a cut in capital gains? -- adopt the simplest possible formula: Every adult citizen should receive an equal share. If the carbon auction yields $150 billion in the first year, for example, each of America's 150 million adult citizens should receive a Treasury check that year of $1,000.
Since some costs will be passed along to consumers who are already walloped by high fuel and food costs, the yearly dividend checks will be a welcome offset.
Our atmosphere belongs to all of us; corporations should pay to use it. The citizens of Alaska and Alberta, Canada, get yearly dividends from the oil companies that take away their natural resources. Why shouldn't the same principle apply when industries use the biggest common resource of all?
JJS: The man sounds like a geonomist! Apply that principle to all nature that somebody uses to the exclusion of others. Recover the annual value of sites, resources, ecosystem services, fields of knowledge (patents/copyrights), and other privileges. Return that to registered voters. At the same time, eliminate counterproductive taxes on our efforts. People would pay less tax plus get back this rent share. They won’t need so much government, so government won’t need so much revenue.
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Jeffery J. Smith runs the Forum on Geonomics.
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Also see: Budget Cut Battles
Prepare for the Best
Did the big speculators who lost recoup by scaring the public ... |
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