We are Hanno Beck, Lindy Davies, Fred Foldvary, Mike O'Mara, Jeff Smith, and assorted volunteers, all dedicated to bringing you the news and views that make a difference in our species struggle to win justice, prosperity, and eco-librium.
These two excerpts of the BBC on rich Chinese are of 2014 Jan 23 by Celia Hatton and 2013 Spt 11.
Report Reveals Offshore Dealings of China’s Elite
More than $1tn in illicit funds flowed out of China from 2002-2011 via the secret offshore banking dealings of thousands of well-connected people in China, Hong Kong, and Taiwan, including China’s richest woman, Yang Huiyan, and the brother-in-law of China’s President, Xi Jinping.
The yuan worth over a trillion dollars often comes from criminal activity, tax evasion, or state corruption.
This ICIJ report has not been mentioned in state media reports and has been censored on Weibo, China’s version of Twitter.
Strictly speaking, it is not illegal for a Chinese citizen to set up a company in an offshore tax haven, like the Cayman Islands or the British Virgin Islands. Chinese entities often set up offshore parent companies in such locations.
According to Chinese law, individuals can exchange just $50,000 (£30,000) worth of Chinese yuan a year into another currency.
However, wealthy Chinese have developed a variety of techniques to skirt those laws. They trade their yuan for the harder currency of a foreign investor. Or visit Macau, an autonomous region south of China, where they gamble in casinos, buying chips in official yuan while cashing in chips for Hong Kong dollars, and in jewelry stores buying expensive jewelry with a credit card then returning the jewelry for cash.
Ed. Notes: Before communism, the rich were the large landowners. Now after communism, the rich are once again becoming the owners of land, not so much agricultural land but residential land in that oh-so crowded.
In a formerly communist country, indeed in every country, the value of land is a commonwealth. Given their history, the Chinese may be more sensitive to that moral position and could any time demand that their government recover the socially-generated value of land and resources. Before that day befalls, the current recipients of all those natural “rents” evacuate their undue fortunes to foreign accounts for safekeeping and later spending on a lifestyle of opulent luxury.
If the Chinese do geonomize, and make their standard of living comfortable for all Chinese, they could lead the world to universal economic justice.
These three 2014 excerpts on land tax sanity are from: (1) The Canberra Times, Jan 23, by the Editors; (2) Quartz, Jan 23, by Noah Smith of Stony Brook University; and (3) Slate, Jan 24, by Matthew Yglesias, author of The Rent Is Too Damn High.
Scrapping Stamp Duty and Taxing the Land is the Only Fair Solution
A good tax – from a government’s perspective, at least – is one that is cheap to administer and almost impossible to avoid. It also helps if the tax applies very widely, because that lightens the burden on individual taxpayers. The perfect tax, in this respect, is land value tax.
Land cannot be hidden: governments record the use and ownership of all land in Australia. This no doubt helps explain why taxing land has always been so difficult politically: no matter how clever one’s accountants are, land tax cannot be dodged.
Former federal Treasury secretary Ken Henry, whose thorough review of Australian taxes was published in 2010, recommended abolishing many of the narrow, inefficient, unfair taxes currently levied on Australians – including stamp duty, payroll tax, and others – and replacing them with a simpler tax on land value.
Unfortunately, his sensible, considered advice has been largely ignored. The sole exception has been the ACT, where the Gallagher government began, in 2012, a generational switch to land tax that it says will be completed in 10 to 20 years’ time. The benefits will be immense.
As such, it is disappointing that the ACT’s Liberal opposition campaigned strongly against the policy at the last election. Equally disappointing has been the refusal of other jurisdictions to embrace similar reforms.
This 100-year-old Idea could End San Francisco’s Class War
The solution was thought of more than 100 years ago, by a San Francisco economist. His name —- sadly forgotten in this day and age —- was Henry George.
As any broker will tell you, there are three important things in real estate: Location, location, location. A plot of land in downtown Manhattan will be worth much more than an identical plot in rural Kansas, even if they have identical houses built on top of them. So when a city grows or enjoys a boom, a lot of the new economic value will go to the people who own the land, regardless of what they build on it.
A century later economists realized that the land value tax (or Henry George Tax) was not just fair but efficient as well. Joseph Stiglitz, along with co-author Richard Arnott, showed that it makes sense for the city to tax the value of land to pay for things like infrastructure. As Paul Krugman showed when a bunch of people move to the city —- for example, as the result of a tech boom —- productivity goes up. Some of the fruits of that productivity will be captured by whoever owns the locations.
A George Tax actually encourages landlords to build useful, valuable stuff on top of the land they own. What San Francisco needs now is a Henry George Tax. The policy would bring rents down. At the same time, it would raise the money the city needs to build better trains, run more bus lines, and build more public housing that will benefit the poor and middle class of San Francisco.
It’s time for San Francisco to embrace the brainchild of its first legendary economist. It’s time for Henry George to become a household name again.
I love the idea of a land value tax. Instead of taxing human labor (and disincentivizing work) or taxing accumulated capital (and disincentivizing savings) you tax land. You get revenue (good!) in a progressive way (because landowners are rich!) without any bad incentives (amazing!) and everyone’s happy. Noah Smith thinks it could greatly ameliorate the class tensions currently gripping San Francisco. I’m afraid that I’m skeptical.
There are lots of places in the United States of America —- most places, even —- where a tax on land value would be a great thing for housing affordability. For example, if Harris County in Texas replaced its property tax with a land value tax it would alter the incentives facing property owners in the Houston area. You’d get more building, less idle land, more housing supply, and lower rents.
But in a place like San Francisco (or Cambridge, Mass.; or Manhattan; or Santa Monica, Calif.; or D.C.), the constraint on the supply of new buildings isn’t really taxes it’s zoning.
The median value of an owner-occupied house in San Francisco is $750,900 —- almost double the California average and more than quadruple the national average. Under the circumstances, the financial incentives to build new housing units are already extremely strong. The problem is that it’s hard to get regulatory permission to build.
If a city wanted to have robust population growth, affordable housing, and lots of construction sector job opportunities then it could easily change its zoning code to allow for more housing. Having upzoned for density, prosperity, and environmental sustainability, it would find itself in a situation where a land value tax is much smarter than a traditional property tax. But for the already-built-up, already-expensive, restrictively-zoned cities of America you need to fix your zoning first.
Ed. Notes: Some have suggested that if society were to recover all of its socially-generated location value (the presence of society generates it), it might be able to dispense with zoning all together. Instead, have government really go after anyone creating a nuisance with their noise or pollution, and anyone putting neighbors at risk by disturbing steep cliffs and riparian areas, and anyone taking too much of any natural resource without compensating neighbors. Do all that and land users and owners would leave space open along creeks and cliffs. To open up space in the city center for a plaza, well, that’s where site value is at its absolute spendiest, and the city, as the richest local entity, could outbid anybody. Looks like another issue that public recovery of publicly-created rents could resolve.
These two excerpts are from a “movement” press release by Masimo, a wealthy med-tech company, 2014 Jan 16, and Forbes, 2013 Spt 23 by Leah Binder, Contributor.
More than 100 Hospitals and Med Tech Companies Join the Call to Reduce Preventable Patient Deaths
At the second annual Patient Safety, Science & Technology Summit more than 100 hospitals and med tech companies made public commitments and pledges to help reduce preventable patient deaths to zero by 2020 in U.S. hospitals.
In addition, 20 medical technology companies pledged to make their devices interoperable so the patient data collected and displayed on their products are accessible for patients and clinicians. To date, 29 medical technology companies have made this public pledge.
More than 200,000 people die every year in U.S. hospitals in ways that could have been prevented.
In 1999, Americans learned that 98,000 people were dying every year from preventable errors in hospitals. That came from a analysis by the Institute of Medicine (IOM) called “To Err Is Human”. As it turns out, those were the good old days.
According to a new study from the Journal of Patient Safety, four times as many people die from preventable medical errors, as many as 440,000 a year.
With these latest revelations, medical errors now claim the spot as the third leading cause of death in the United States, dwarfing auto accidents, diabetes, and everything else besides cancer and heart disease.
What do these errors look like? The sponge left inside the surgical patient, prompting weeks of mysterious, agonizing abdominal pain before the infection overcomes bodily functions. The medication injected into a baby’s IV at a dose calculated for a 200 pound man. The excruciating infection from contaminated equipment used at the bedside.
Over a thousand people a day are dying from these kinds of mistakes. And you are paying for it. Hospitals shift the extra cost of errors onto the patient, the taxpayer and/or the business that buys health benefits for the infected patient.
A study a few months ago in the Journal of the American Medical Association found that employers paid $39,000 extra every time an employee suffered a surgical site infection. That’s enough money to create a good job. Instead, it’s rewarding a hospital for creating an infection.
Hospitals that put a priority on safety and use proven techniques show results, and their patients are safer. Those that minimize the importance of patient safety kill more of their patients.
This 2014 excerpt of The New York Times, Jan 23, is by Julie Creswell and Reed Abelson.
This month, the Justice Department said it had joined eight separate whistle-blower lawsuits against Health Management Associates, a for-profit hospital (H.M.A.), in six states. The lawsuits describe a wide-ranging strategy that relied on a mix of financial incentives and threats in an attempt to inflate the company’s payments from Medicare and Medicaid by admitting patients like an infant whose temperature was a normal 98.7 degrees for a “fever.”
Federal regulators have multiple investigations into admissions, procedures, and billings at many hospital systems, including the country’s largest, HCA. Community Health Systems, the Franklin, Tenn., company from which H.M.A. hired its former chief executive in 2008, faces similar accusations that it inappropriately increased admissions.
Like their Wall Street bank counterparts, the mega-hospital systems, with billions of dollars in revenue, are more challenging to regulate.
Many settlements run only into the tens of millions of dollars. That’s a corporate slap on the wrist.
H.M.A. also faces shareholder lawsuits and a federal securities investigation. A former executive was indicted late last year on an obstruction charge related to these investigations.
Ed. Notes: Yawn. Hospitals lie, like these hospital chains, to charge too much in the sense over the legal limit. Yet almost everybody involved in medical car charges too much in the sense of more than a fair return for service: private ambulances, local government “emergency” response, doctors, specialists with their tests, pharmaceuticals, they all take as much as they can get.
The greed got its start with doctors and their licenses keeping out competitors, such as doctors from a different jurisdiction, or from an unconventional field such as chiropractors, and different treatment such as vitamins (however useful), which the AMA tried to get listed as medicines needing prescriptions. The solution to that is to let competition back in. Abolish licensing. Instead, require doctors and any sort of healer to post their won/lost record. Since as many people are healed by placebos and by traditional cures as by mainstream medicine, and the medical establishment is the third leading cause of death, the absence of licensing can not do any harm, not as long as potential patients are fully informed by all healers of any stripe by declaring their success rate.
With easier entry into the field for newcomers, and with prestige earned not by conformity to norms but by actual healing, the cost of true health care will fall. And it will fall even further if the populace gets healthier. What will help everyone get healthier are (a) a healthier environment and (b) metro regions friendlier to pedestrians and cyclists. Both a cleaner environment and a compact, car-free urban region follow from geonomics, from turning land values into common wealth. Once the populace gets healthy, perhaps the greedy can visit health practitioners to heal themselves and learn some more sociable mental values.
This 2014 excerpt of MarketWatch, Jan 13, is by Robert Schroeder.
The U.S. government recorded a record budget surplus of $53 billion in December, helping to bring the government’s deficit down 41% in the first quarter of fiscal 2014.
Nearly $40 billion in payments from government-controlled mortgage giants Fannie Mae and Freddie Mac contributed to the surplus, the largest on record for the month of December. The last time there was a December surplus was in 2007, of $48 billion.
Tax receipts were also up 5% in the month. Spending fell 8% in the same period, reflecting lower outlays on agri-business, military, and other programs.
The deficit for October, November, and December was $174 billion, $120 billion below the year-ago period.
In fiscal 2013, which ended Sept. 30, the budget gap dropped to $680 billion, its lowest level in five years. Thanks to record revenues and modestly lower spending, it was the first gap of below $1 trillion of Barack Obama’s presidency.
Ed. Notes: When we pay mortgages we pay for both the house and the land. It’s not the house going up in value; the house is getting older, more worn out. It’s the land, or location, that actually rises in value.
Why now? The recession has created winners and losers. While losers are pushed aside, winners get busy again. As the money flows from investor to business, from buyer to seller, winners use hefty amounts to buy housing, pumping up its locational value again, profiting Fannie and Freddie.
Having to spend more for land is not presently a good thing. Now it means spending less for things people do produce: goods and services. It means speculators get lured in and they’ll inflate site values. It means the business cycle (of 18 years) will culminate in recession, yet again.
OTOH, the US owes less money. That displeases the left who prefer government spending, the more the merrier. But even when public spending is not for war and bailouts, it still requires expensive bureaucracy who make choices that should be left to free individuals.
The cuts Congress has made so far to the military and corporate welfare are just the tip of the iceberg. Trillions more could be cut. We should replace taxes on earnings, sales, and buildings with fees and dues that recover the socially-generated value of land and resources. We should replace almost all social programs with a dividend paid to the citizenry. Then public revenue will go straight to the people (mollifying the left?) and government won’t operate in red ink anymore but boast a surplus every month.
This 2014 excerpt of Huffington Post, Jan 21, is by Mary Manning Cleveland of Columbia University.
In its program of “Quantitative Easing” or “QE”, the Federal Reserve Bank creates brand new money to buy billions of U.S. Treasury bonds and other Federal securities from the big banks. QE keeps down longer-term interest rates, which will, it is hoped, encourage investment and stimulate the economy.
By purchasing bonds from Fannie Mae and Freddie Mac, which buy mortgages, QE has kept mortgage rates down and real estate prices up. That’s nice if you qualify for a loan, or if you’re a bank holding real estate collateral.
By keeping bond yields very low, QE has sent investors away, into the stock market looking for better returns, creating a stock market boom — nice if you own or issue stocks.
QE has also supplied the biggest banks with cheap money for profitable trading in the international financial markets, enabling them to recover from the 2008 crisis and continue paying big bonuses. QE has done quite well for members of the One Percent.
But what about stimulating the economy by encouraging investment with low interest money? That hasn’t happened. The cost of money is less the driver in business decisions, vs. market potential, the absolute level of commitment required, competitor dynamics, etc; funding cost is more a brake. Making money cheaper is not going to make anyone want to take risk if they think the fundamental outlook is poor.
Further, the overwhelming majority of banks no longer do small business lending. Character-based lending and the use of knowledge of the local market have gone out the window. The easy credit path to recovery went with it.
QE has only further entrenched the too-big-to-lend banks. We can’t effectively stimulate the economy unless we address the core problem: inequality.
Ed. Notes: Some people seem more concerned about the health of the economy than they do about the wellbeing of human beings, those whom the economy is supposed to serve — a misplaced emphasis. Banks would serve entrepreneurs if government would quit serving banks. The role of government should not be to interfere in the economy on behalf of any special interest by taxing and spending according to their faulty analyses. All government need do is defend rights and make sure that socially-generated values — the values of land, resources, and privileges like banking charters — are recovered and shared. Charge full-annual value for deeds to land and charters to banks, then disburse that raised revenue to the citizenry. With that extra income, people won’t have to borrow so much and the economy can take care of itself.
This 2014 excerpt of the Drug Policy Alliance Blog, Jan 17, is by Avinash Tharoor. It also appeared on AlterNet.
The illegal drug trade accounts for around eight percent of all international trade.
Legal marijuana business in Colorado has proven to be highly lucrative, with $5 million made in the first week of 2014. Several Colorado legislators have made a bipartisan appeal to the federal government, requesting clear guidelines for marijuana businesses’ regulation within the banking sector.
Despite liberalization of marijuana laws in Colorado and elsewhere, the plant remains illegal at the federal level; this means that banks won’t open accounts for marijuana businesses, so the majority of their transactions are cash-only. The movement of such large amounts of cash can be highly dangerous for business owners, and troublesome for both customers and tax collectors.
Banks have avoided allowing these new companies to open accounts, ironically, for the fear of being penalized, or implicated as launderers.
Hypocrisy? Bank of America, Western Union, and JP Morgan, are among the institutions allegedly involved in the drug trade. HSBC has admitted its laundering role, and evaded criminal prosecution by paying a fine of almost $2 billion.
The lack of imprisonment of any bankers involved is indicative of the hypocritical nature of the drug war; an individual selling a few grams of drugs can face decades in prison, while a group of people that profit from the trade of tons escape incarceration.
This 2014 excerpt of Naked Capitalism (by Yves Smith), Jan 16, is by Bob Goodwin, an investor and medical device entrepreneur, was posted in Dubious statistics, Guest Post, Health care, and Regulations and regulators.
The US Center for Disease Control is on record taking the position of the Infectious Disease Society of America on treatment of Lyme disease. But it seems odd for the CDC to be taking a position to kill a new test, especially considering that two different university hospitals are currently doing independent reviews of the same test.
I wrote here last week that I was getting blocked on Wikipedia from providing details about the Lyme Wars because Wikipedia only wanted to present the mainstream view.
The two camps in the war have only one scientific disagreement that I can detect. The mainstream medicine’s view is that the Lyme bacteria is non-persistent if treated with a few weeks of antibiotics, and even if untreated, the infection should be considered cleared when the immune system is no longer fighting the bacteria. People can still be sick later, but this sickness is likely due an auto-immune reaction. The minority position is that the bacteria hides and burrows, changes forms and builds biofilm colonies that both make the bacteria resistant to antibiotics, but also invisible to the immune system.
For 20 years there has been no meaningful change in the treatment For Lyme disease or the scientific consensus due to the war. Contrast that with the HIV epidemic, and the pace of innovation by the exact same set of researchers and doctors, and yet the CDC estimates that 4 million people in the US may have been infected, and only 10% of those diagnosed.
A good Lyme test would go a large way to ending the wars, because at some point in the debate one side is right and the other is wrong.
There are microscopes now that can see the details of bacteria and microbiology is flourishing with new insights. And testing a test is very easy. Unless there is a war.
With 2 universities already testing the culture, and the ability to independently test so simple, why is the CDC wading into research wars? In the words of Professor Durland Fish of Yale University, “This battle cannot be won on a scientific front. We need to mount a socio-political offensive; but we are out-numbered and out-gunned. We need reinforcements.” (here)
Ed. Notes: Bureaucrats and scientists put opinion and bias above fair analysis, as do most people, us being a political species. Left unsaid above is that insurance companies don’t want to deal with the cost of another chronic disease, and the new test would show that Lyme disease could be chronic.
How do we de-politicize big businesses like insurance and big bureaucracies like the CDC? We make them responsible to, and beholden to, the patient. Researchers and officials should not get their paychecks from a central, powerful source but from many clients. That would introduce the discipline of the market.
To introduce the discipline of the government, politicians and bureaucrats need to be free of corporate influence. Corporations should not be so big as to wield so much influence. That calls for reforming limited liability of business and empowering consumers with shares of society’s surplus.
This 2014 excerpt of the Housing Assoc.’s Charitable Trust blog, Jan 15, is by Matt Leach, HACT’s Chief Executive.
The idea is simple – rather than imposing ever more complex (and sometimes punitive) welfare benefits on the poor, it would be more straightforward and practical to guarantee every citizen a flat basic allowance, which would be unaffected by any earnings they gained on top of it.
With jobs increasingly being squeezed out of economies by technology, and real wages in developed economies largely stagnant as income levels amongst the richest continue to grow, increasingly we can make more goods and services than we can afford to buy with the wages most of us are getting paid.
Some 10,000 UK citizens signed a recent cross-continent initiative to get the Basic Income on the agenda at an EU level. Is it time housing providers became part of that debate?
Ed. Notes: The author, who is an affordable housing leader, mentioned the question of funding an extra income but did not mention the solution of using the value of land, the stuff that housing sits on and that swells and swallows so much of most family budgets. Already places like Aspen CO and Singapore do capture a slice of that “ground rent”, via taxation, and use some of it to help make housing affordable for residents.
It’s a huge font of funds for government to tap, since people spend so much for natural assets like locations and resources and EM spectrum and ecosystem services. Of course, if society as a whole were to receive that spending, then lenders, speculators, and absentee owners would no longer be able to capture it. A small price to pay for economic justice!
If government were to recover the socially-generated value of nature, and of the privileges it grants such as corporate charters, there’d be no need or excuse for counterproductive taxes. Taxes on earnings, sales, and buildings could all be repealed. And if the citizenry were to receive a share of surplus public revenue, there’d be no need or excuse for wasteful and addictive subsidies. Corporate welfare and white-elephant infrastructure projects and such could all be eliminated.
With Land Dues instead of the whole array of taxes, and with Citizen’s Dividends in lieu of bureaucratic subsidies, everyone could delight in the disappearance of mindless work to automation. Universal material security would become a norm, letting the worries of econo-man slip thankfully into the past. Ah, blessed geonomics!
Is this the world’s worst oil spill? Is it an accident? This 2014 excerpt of Daily Kos, Jan 21, is by Ashley Allison, SierraRise Senior Campaigner.
For three decades, Texaco, now part of Chevron, dumped 18 billion gallons of toxic oil waste into the Ecuadorian Amazon. In 1994, when Texaco was done pillaging Ecuador, it left behind a toxic wasteland. More than 900 open and unlined waste pits dot the landscape, overflowing toxic chemicals into the waterways that Ecuadorians rely on for cooking and bathing. Thousands were left suffering cancers and devastating birth defects.
In an unprecedented move, the oil giant is using a U.S. law intended to rein in mobsters to sue Ecuadorian activists and supporters — branding them as criminals just for speaking out.
The Sierra Club and thirty other organizations have joined forces to call out Chevron for their dirty tactics.
Ed. Notes: The law is on the polluter’s side. The best example of this bias is limited liability, AKA, the corporate charter. For a mere filing fee, anyone can get one, no matter if you intend to do business without harming nature, worker, or consumer, or if you conduct your enterprise with reckless disregard of others. While activists must react to every violation of rights as they come up, activists must also become proactive and repeal the government’s interference in business on the side of the polluter. Let those dirty companies try to get insurance from private insurers. And let stockholders sign contracts with firms to settle the liability issue. Business could become responsible if government would quit looking the other way when business is liable.
But to shift government from being a servant of business to being a servant of the people, it may be necessary to shift “rents” (the spending for land and resources) from lining the pockets of owners, lenders, and speculators to filling up the treasuries of the public. That is, use dues, fees, leases, and taxes to redirect society’s spending for nature to the government and have government use the revenue to pay the citizenry a dividend, a la Alaska. Such sharing of natural rents makes it possible to eliminate counterproductive taxes and wasteful subsidies.
Further, as beneficiaries of the earth’s worth, citizens become de facto owners of earth herself, better positioned to demand sustainable treatment of ecosystems by extractors, acknowledging some amount of harvesting is necessary for human civilization.
This 2014 excerpt of USA Today, Jan 20, is by Kim Hjelmgaard.
Almost half of the world’s wealth is owned by just 1% of the world’s population, according to a report published just days before the start of the World Economic Forum’s annual meeting, where the topic of rapidly increasing income disparities will be a major focus.
In its study titled Working for the Few, the British-founded development charity Oxfam concludes that the $110 trillion wealth of the 1% richest people on the planet is some 65 times the total wealth of those floundering at the “bottom half” of the world’s population.
Further, this poorer “bottom half” now has about the same amount of money as the richest 85 people in the world, and the wealthiest grew their share of bounty in 24 out of 26 countries surveyed between 1980 and 2012, the study says.
“This massive concentration of economic resources in the hands of fewer people presents a significant threat to inclusive political and economic systems. Instead of moving forward together, people are increasingly separated by economic and political power, inevitably heightening social tensions and increasing the risk of societal breakdown,” the report says.
The World Economic Forum has identified income inequality as one of the greatest risks facing the world in 2014, and it will be a big topic of discussion during the organization’s annual meeting in Davos, Switzerland.
Ed. Notes: People own less than they need. To deal with that, Oxfam calls for redistribution, minimum wage, and more bureaucratic programs. But are those policies — which are already in place — actual solutions? Instead of “take from the rich to give to the poor” — a downstream strategy — maybe don’t create the undeserved rich in the first place. Humanity would be wiser to predistribute society’s surplus, thus precluding the amassing of undue fortunes — an upstream strategy.
What makes the rich rich and the poor poor is society’s spending for nature, for land and resources, for the very valuable goodies that nobody’s labor or capital brought into existence. Now, thanks to deeds and loans and other social contracts, we direct all that spending into the pockets of the very few. Using different social contracts, such as fees, dues, leases, even taxes, we could direct all that spending into the public treasury then pay it back out as monthly dividend checks to the citizenry.
It’s fair, since nobody made land, everybody needs land, and all of us — society in general — make land valuable, just by generating population density. And it’s efficient, because Earth’s worth is a social surplus. Since nobody had to be rewarded to create land (unlike producing goods and services), the receipt of “rent” is a bonus to lenders and absentee owners.
Along with “god-given” land, resources, EM spectrum, and ecosystem services, there are also government granted privileges, such as corporate charters and utility franchises. Together, nature and privilege are worth many trillions each in the US alone. It’s the stuff of vast inequality, presently, but it could become the extra income for everyone.
To cut to the root of the problem, we need to share Earth by sharing her worth. It’s a huge solution that fits a huge problem. It’s called geonomics and it’s something the Oxfams of the world need to look into.
These three excerpts are from: (1) P2P Foundation, 2014 Jan 14, on history by Pat Conaty; (2) Next City, 2013 Aug 5, on cities by Bill Bradley; and (3) Toronto Star letters, 2014 Jan 19, on jobs by Frank de Jong, President, Earthsharing Canada.
Land as a Commons in the Cooperative Tradition
Land became a growing political issue in the 16th and 17th centuries in the face of the first major wave of enclosures. Gerard Winstanley and the Diggers were early prophets of democratic land ownership in the mid 17th century. Their efforts were defeated and the loss of the commons intensified in the late 18th century as thousands of parliamentary acts of enclosure gathered pace.
In 1775 Thomas Spence, the son of a shoemaker from Newcastle-upon-Tyne, proposed a practical solution in a pamphlet: ‘Property in Land, Every One’s Right’. Spence argued that local parishes should own all land democratically and that rents collected should be used first to provide support for those unable to work and second to be shared to meet the needs of children and local residents equally. Spence called his solution the Parish Land Trust and this reform became known in the nineteenth century as Spence’s Plan. Both advocacy and pioneering spread and inspired other land reform thinkers like Thomas Paine.
American land reformer Henry George was active in the co-operative movement and he had a huge following in Great Britain and Ireland. His proposal for land taxation through a Single Tax was aimed at encouraging the steady and peaceful transfer of private land ownership for securing the substantial economic benefit and social security of the vast majority of households and businesses.
All these precedents gave Ebenezer Howard the confidence to develop the Garden City model and with important support from those active in the co-operative movement to develop Letchworth and Welwyn Garden Cities.
Six years after the founding of Letchworth Garden City, Lloyd George as Chancellor with the active backing of Winston Churchill as trade minister introduced the famous People’s Budget of 1909 that included a land value tax inspired by Henry George and set at 20% on any increases in value when land changed hands. This attempt by a Government to distribute “rents” to the people led to a twelve-month battle in Parliament. In April 1910 the land tax was dropped after the first House of Lords veto of a Government budget in two hundred years.
Why Don’t More Cities Tax Based on Value of Land Rather Than What You Put On It?
The Center for an Urban Future and NYU’s Wagner Innovation Lab released a report last month for the next mayor of New York City, “Innovation and the City”. Its Part II look at the split-rate property tax.
The majority of U.S. cities apply a singular property tax rate to both the land and the buildings. In several Pennsylvania cities, including Harrisburg, the land is taxed higher than improvements on the actual buildings. So developers can’t simply sit on land, unless they want to foot the bill for the taxes. The lower tax rate on improvements has incentivized more density.
Milton Friedman, free-market proponent, conceded that “the least bad tax is the property tax on the unimproved value of land.” I’d like to see other municipalities, especially the depopulated urban cores of cities (looking at you, Detroit), take a long, hard look at this tax rate. Dan Gilbert is sitting on so many properties in downtown Detroit right now it’s hard to keep track.
The best way for finance minister Jim Flaherty to reverse Canada’s disastrous de-industrialization is to stop taxing jobs, businesses, and sales. We tax cigarettes and alcohol to discourages their use, so it follows that income taxes are a tax on employment while sales taxes make products less affordable for many, translating into fewer local manufacturing jobs.
To address this job-killing double whammy, the federal government should shift taxation off of the productive economy and on to the non-productive economy. Most taxes should be on the use and abuse of nature, which would result in a double bonus of creating jobs plus conserving resources for future generations.
For example, Canada should collect the economic rent of oil, a policy that has effectively made all the citizens of Norway into millionaires, without discouraging their oil industry. Contrast this with Canada, where oil companies are allowed to pocket most oil super profits, putting Canadians, collectively, deeply in debt and out of work.
Every so often, the media reports on the smog made in China, blowing across the Pacific Ocean, into the lungs of Americans living on the West Coast.
These excerpts are from 2014, the Weather Channel, Jan 21; from 2011, Discover magazine, Mar 18 by David Kirby; and from the late 1990s in The Oregonian of (perhaps 1999, Mar 5 and 1997, Dec 12, but unclear)
Pollution from China Reaches U.S.
Air pollution from China is blowing across the Pacific Ocean to the U.S. West Coast and causing at least one extra day of smog each year.
The pollution that reaches the West Coast is largely a by-product of production of consumer goods for the U.S. and Europe.
It’s the first study to measure exactly how much of the Chinese pollution reaching the U.S. West Coast is from the production of items for the U.S., like cell phones, televisions, and electronics.
Even as America tightens emission standards, the fast-growing economies of Asia are filling the air with hazardous components that circumnavigate the globe.
None of the contamination we pump into the air just disappears. It might get diluted, blended, or chemically transformed, but it has to go somewhere. And when it comes to pollutants produced by the booming economies of East Asia, that somewhere often means right here, the mainland of the United States.
Carbon dioxide, the predominant driver of global warming, is not the only industrial by-product whose effects can be felt around the world. Prevailing winds across the Pacific are pushing thousands of tons of other contaminants —- including mercury, sulfates, ozone, black carbon, and desert dust —- over the ocean each year. Some of this atmospheric junk settles into the cold waters of the North Pacific, but much of it eventually merges with the global air pollution pool that circumnavigates the planet.
China now emits more mercury than the United States, India, and Europe combined. “What’s different about China is the scale and speed of pollution and environmental degradation. It’s like nothing the world has ever seen.”
Pollution Violating a New Ozone Limit Crossed Pacific
Even as America tries to slow down its emission, other nations are speeding up. People on the West Coast breathe a pollution a portion of which — 11% — that comes from China, found a University of Washington researcher.
To see the source, one must pay the newspaper.
Ed. Notes: The media is short on memory, long on news hooks. Unlike a modern journalist, if you were a student in college and wrote a paper on air pollution crossing the Pacific without doing any research on previous reports, your professor would not be pleased. So to get a bigger picture, both across time and into the facts, you have to rely on sites like this.
Whether or not reporting can be improved, can industry be cleaned up? Is it too late for the West to set a better example of industrial development? To use the cutting-edge technology sitting on shelves, awaiting use — clean fuels, efficient motors, solar powers, better batteries, lightweight vehicles, efficient mass transit, and settlement patterns that are compact (common destinations within walking and pedaling distance — that would generate heat and light cleanly? Is there still time to export what works (even if we’re not using it yet)?
No matter what lies over the time-horizon, it’s never too late to start doing the right thing. In this case, policy-wise, that means every jurisdiction should:
extend full liability to knowing polluters
quit subsidizing the old ways of burning fossil fuels
make polluters pay; i.e., shift taxes from goods to bads, and
level the playing field; i.e., shift subsidies from bads to goods, to everyone, paying the citizenry an extra income.
These policies would “internalize the externalities” (to use the jargon) and support the garage startups that are more creative than the cautious corporations. In such an open economy, great ideas would take over market share in record time. It’s the policy of geonomics, based on earth’s natural patterns of feedback and able to harmonize human desires with ecosystem constraints. So what’s the world waiting for?
This 2014 excerpt of MacroBusiness, Jan 21, is by Leith van Onselen.
In Australia as of 2013 Q4, personal loans enquiries have stabilised at a much higher level after a period of strong growth. This suggests ongoing challenging conditions for retailers of big ticket items and reflects a slowdown of car sales, which have shown no growth year on year, and a reduced demand for larger purchases among consumers in the mining states.
The December quarter is typically a strong period for credit demand, reflecting the seasonal peak in spending associated with the Christmas period. The relatively weak outcome in loans and credit cards suggests low interest rates are not leading to a significant lift in consumer borrowing as households remain cautious about rising unemployment.
It’s worth also pointing out that the latest credit aggregates data from the Reserve Bank of Australia revealed that the share of credit flowing to mortgages hit the highest level on record (60.2%), with the share of loans flowing to business (33.4%) hitting a record low.
Ed. Notes: Aussie debt is not a thing of beauty, as debt isn’t anywhere. There, personal borrowing has topped out, business borrowing has bottomed out, hopefully, while borrowing to buy housing with, especially, the land beneath it keeps expanding. So, Aussies spend more for something nobody made — land — and less for the goods and services that their neighbors make. That’s a recipe for a recession. So where in the business cycle is the Aussie economy? Perhaps they’re lagging seven or so years behind America’s.
This 2014 excerpt of IPS, Jan 20, is by Dennis Engbarth.
The Taiwan farmers victory in a landmark court case in a years-long battle has delivered a shock to government officials and given a morale boost to citizen campaigns.
The win followed a bitter resistance campaign against expropriation of farmland that has already cost two lives.
The dispute in Dapu in Miaoli county has been the most high-profile case in Taiwan of resistance to ‘zone expropriations’ in which large zones are subject to compulsory sale to government for projects which use part of the land for infrastructure and sell other portions to raise funds for construction or local government finance.
“Many large-scale zone expropriations of excellent farmland have taken place all over Taiwan usually under the pretext of creating new towns or industrial zones without consideration of actual need, and the land is often sold for speculation,” said Taiwan Rural Front (TRF) chairman Hsu Shih-jung.
The case in Dapu made international news in June 2010 after a Taiwan citizen reporter filmed Miaoli county government excavators, protected by hundreds of police, destroying hectares of green rice paddies ready for harvesting.
A protest sit-in was joined by more than 10,000 citizens.
Professor of land economics Tai Hsiu-hsiung of Taipei’s National Chengchi University told IPS that Taiwan’s excessively low tax rates had pushed local governments to use this method to first finance public infrastructure and then use zone expropriations get land for sale to improve their overall fiscal balance sheets.
Ed. Notes: So if government were collecting the annual rental value of land in Taiwan all along it would not need to sell off land that did not belong to them or the public. Government could also charge fees to the users of infrastructure, the utility bills everyone is familiar with. And government could cut its expenses by eliminating waste and graft. Like other governments in Southeast Asia, Taiwan could recover more site rent, as does Hong Kong, and pay citizens a dividend, as does Singapore — and get completely out of the insider land-trading racket.
a study of a phenomenon David Ricardo noted going on two centuries ago. When wine grapes rise to $10,000 a ton from the very best land (last year, cabernet sauvignon commanded an average of $4,021 a ton in the Napa Valley), then vineyard prices soar from $18,000 an acre in the 1980′s to $100,000 an acre five years ago and now for a top pedigree up to $300,000 an acre (The New York Times, April 9, via Wyn Achenbaum). Pricey land does not make wine pricey; spendy wine makes land spendy. While vintners make their wine tasty, nature and society in general – not any lone owner – make land desireable. Steve Kerch of CBS’s MarketWatch (April 5) notes that much of what a home sells for on the open market is a reflection of intangible factors such as what school district the house sits in. The price the builder has to pay for the land also tends to be driven by the same intangibles. Because the value of land comes from society, and because one’s use excludes the rest of society, each user owes all others compensation, and is owed compensation by everyone else. Sharing land’s value, instead of taxing one’s efforts, is the policy of geonomics.
what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, in-cluding the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.
what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, including the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.
about the money we spend on the nature we use. It flows torrentially yet invisibly, often submerged in the price of housing, food, fuel, and everything else. Flowing from the many to the few, natural rent distorts prices and rewards unjust and unsustainable choices. Redirected via dues and dividends to flow from each to all, “rent” payments would level the playing field and empower neighbors to shrink their workweek and expand their horizons. Modeled on nature’s feedback loops, earlier proposals to redirect rent found favor with Paine, Tolstoy, and Einstein. Wherever tried, to the degree tried, redirecting rent worked. One of today’s versions, the green tax shift, spreads out of Europe. Another, the Property Tax Shift, activists can win at the local level, building a world that works right for everyone.
a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old loggers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heritage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a dividend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jefferson suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.
the Great Green Tax Shift maxed out”
Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net.
Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent. Better settlement patterns do reduce extraction upstream and pollution downstream.
Politically, green fees have less impact if applied locally; local is where grassroots movements have more impact. Yet getting rent usually entails shifting the property tax (or charging user fees), the province of local jurisdictions; both mayors and city voters have been known to adopt a site-value tax.
Ethically, putting into practice “tax bads, not goods” skirts the issue of sharing Mother Earth which collecting rent confronts head on. Since nothing is fixed until it’s fixed right, ultimately, greens must lead humanity into geotopia where we all share the worth of Mother Earth.
shaped by reality. In the 1980′s, the Swedish government doubled its stock transfer tax. Tax receipts, however, rose only 15%, since traders simply fled to London exchanges. Fearing a further exodus, the Swedish government quickly rescinded the tax altogether. (The New York Times, April 20) That willingness to tax anything leads us astray. Pushing us astray is that unwillingness to pay what we owe: rent for land, our common heritage. Assuming land value is up for grabs, we speculate. We cap the property tax on both land and buildings and the rate at which assessments can go up; while real market values rise quicker, assessments can never catch up. Our stewards, the Bureau of Land Management, routinely sell and lease sites below market value, often to insiders, says the Government Accounting Office. Once we grasp that rent is ours to share, we’ll collect it all, rather than let it enrich a few, and quit taxing earnings, which do belong to the individual earner. That shift is geonomic policy.
a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heri-tage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a divi-dend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jeffer-son suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.
not exactly Georgism, the Single Tax on land value proposed by Henry George. He did, tho’, inspire most of the real-world implementations of the land tax that some jurisdictions enjoy today, and modern thinkers to craft geonomics. While his name and our remedy both begin with “geo” since both words refer to “Earth”, the two have their differences. (a) George pegs land monopoly as the fundamental flaw while geonomics faults Rent retention. (b) To fix the flaw, George was content to use a tax, while geonomics jettisons them in favor of price-like fees. (c) George focused on the taking while geonomics headlines the sharing. George envisioned an enlightened state judiciously spending the collected Rent while geonomics would turn the lion’s share over to the citizens via a dividend. (d) And George, as was everyone in his era, was pro-growth while geonomics sees economies as alive, growing, maturing, and stabilizing. Despite these differences, George should be recognized as great an economist as Euclid was a geometrician.