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This 2014 excerpt of the Weekly Wastebasket, Oct 3, is by Taxpayers for Common Sense.
The U.S. Department of Agriculture (USDA) “resolved” a trade dispute with Brazil. The resolution? U.S. taxpayers will pay Brazilian cotton growers $300 million.
Because the US subsidizes cotton growers — even those that simply owned land that once grew cotton — the World Trade Organization (WTO) granted Brazil the right to levy restrictions and tariffs on U.S. products, including on intellectual property and other high value goods – not agriculture products. To avoid such retaliation, and to continue subsidizing U.S. cotton farmers, the US made its deal with Brazil.
The USDA is requiring taxpayers to fork over $300 million to Brazilian cotton growers in order to squander nearly $4 billion on US cotton farmers.
The nearly trillion dollar farm bill passed into law this spring creates new subsidy programs for dozens of crops from corn and soybeans to chickpeas and mustard seeds. This is on top of the billions we spend each year subsidizing crop insurance policies for 130 different crops, still more shallow loss programs, government-set price supports, marketing loans, quotas, import restrictions, and sweetheart deals for sugar.
Any other country with a significant cotton industry, say India, or other crop that the US subsidizes, could be next in line for a handout.
Ed. Notes: Landowners have such an easy time wringing subsidies from politicians! Ironically, that’s exactly the opposite of what government should be doing: which is recover the socially-generated land values from land owners. And then share them out among citizens while not taxing the earnings, purchases, and buildings of citizens.
This 2014 excerpt of Common Dreams, Oct 2, is by Deirdre Fulton.
Global income inequality has returned to levels recorded in the 1820s —- when the Industrial Revolution produced sizable wealth gaps between the rich and poor —- according to a new report released by the Organization for Economic Cooperation and Development (OECD).
“How Was Life? Global Well-Being Since 1820″ affirms great strides have been made in some areas such as literacy, life expectancy, and gender inequality. Income inequality began falling at the end of the 19th century.
Around 1970, it began to rise markedly. The number of those living in households without any income from work has doubled in Greece, Ireland, and Spain.
Ed. Notes: Obviously, machines and factories produced more wealth and more income for more people. But that extra money in the pocket let people bid up the price of land. That’s how success sows the seeds of its own failure; as spending for land goes up, spending for goods and services must go down.
It might take a while for the improvement in distribution to peter out — almost 200 years — but from here on out it will only get worse.
That is, until people wise up and share the value of land, sort of like what Alaskans do with oil revenue and what Singapore does with the surplus revenue generated by keeping taxes on people’s efforts low and taxes that recover rents high. Nobody has to wait for a national government to recover location value; geonomics is something reformers can do with their local government’s cooperation.
This 2014 of Guardian Liberty Voice, Spt 26, is by Carolette Wright.
Rate tables released by the Organization for Economic Corporation & Development (OECD) shows the US has the “highest burden” of corporate taxes than any other leading country. The top corporate rate is 39.1 percent. “High” is relative; many countries are contenders.
The OECD, founded in 1961, is the organization for industrialized governments whose mission is to advise on foreign taxation policies. The OECD also brings a resolution for issues such as tax competition with economies not affiliated with OECD, as well as cases of tax evasion tax proceedings on environmental issues.
Worldwide Tax Summaries published by the PwC, a tax consultancy, lists the 34 countries in the organization that make up the industrialized world; four countries were recently added in 2010, among them were Israel, Chile, Estonia, and Slovenia.
Ed. Notes: To avoid this rate, big rich US corporations re-incorporate in the Cayman Islands and other tax havens where the rate is lower. Plus, there are other ways US corporations avoid this rate so that few if any actually pay such a high rate. Indeed, each year the magazine Business Week lists all the businesses that not only totally dodged taxes but actually got multi-million dollar checks back from the US Treasury.
Better than trying to take profit from successful companies would be to not give them so much money in the first place. That means an end to corporate welfare. That also means an end to most taxes as we know them, since they tilt the playing field in ways that favor Big Business. For example, the tax on wages helps make hiring employees less affordable. So jobs are fewer and workers more desperate, too desperate to negotiate higher wages.
Conversely, the absence of a tax on land, or of land dues, lets owners and speculators and lenders do things like withhold prime sites from use and flip buildings and collusively bid up their prices. A tax on land, or land dues, would wipe out these practices and spur owners to put and keep prime locations at best use, which would also require work, generate jobs, and raise wages. Thus as labor got a bigger share of the pie, capital would get a smaller share and would not be such big targets of envious taxists.
Further, much profit is not exactly a return to capital but a return to land or to privilege. McDonald’s, for example, does not make its fortune from selling hamburgers but by leasing franchises to fast-food restauranteurs at busy locations. Thus most of McDonald’s income is actually land rent. Other companies gain not by beating their competition with a better mousetrap but by using patents and regulations to prevent other companies from competing with them at all. Governments need to get out of the business of granting such favors to so-called rent-seekers.
One more factor: Presently, since land is not taxed much nor are there land dues, individual and corporate owners can use land as collateral and qualify for fat loans. Not only does their borrowing awash the economy in debt and de-stabilize the economy with the boom/bust cycle, it also creates this “heads I win, tails you lose” phenomenon whereby they rake in inflated profits during booms and rake in massive bailouts during busts. It’s these unearned gains that corporations shelter and taxists target.
All these problems become non-issues in a just economy. Simply repeal counterproductive and taxes and replace them with land dues and other user fees. Abolish biased subsidies and replace them with dividends to citizens.
Putting geonomics into practice means government, business, workers, and even those beyond the economy would be pulling on the same end of the rope.
This 2014 excerpt of Open Secrets, Spt 25, is by Lalita Clozel.
As of mid-2014, the wealthiest American towns had spent about $14 million on the midterms, while benefiting Democrats and Republicans almost equally.
They were more willing to open their checkbooks during the presidential election, spending $36 million in 2012 compared to $19 million in the 2010 cycle.
Unlike the midterms, they veered conservative during the 2012 presidential election cycle; they spent $14 million on Democrats and close to $20 million on Republicans, or about 43 percent more.
It’s important to note, though, that these statistics are not necessarily representative of the states’ political climates. Many of these towns are very small.
Arizona’s most affluent town by these metrics is Paradise Valley, with a median income of almost $140,000. It counts among its residents Barbara Barrett, a former U.S. ambassador to Finland under President George W. Bush; her husband Craig, a former CEO of Intel Corporation; and former Republican Vice President Dan Quayle.
Ed. Notes: Why do the rich give lots to presidential races and little to midterm Congressional races? Probably because twice as many people vote for a president, even more, than during midterms, so there are more people to influence. It’s probably not that the president has more power than Congress; both are subservient to the prevailing plutocracy. It’s more likely that the presidential election sets the tone, attitude, and worldview of the American sheeple.
The solution is to not try to legislate money out of politics so much as it is to learn how to sway people in the face of so much spending. Another part is to quit giving so much money to one’s opponents. That involves not just boycotts but much more so local tax reform, especially shifting the property tax.
By shifting the property tax off buildings, onto land — something Pittsburgh did from 1980 to 2000 and enjoyed affordable housing — localities can shrink mortgages. Smaller mortgages will shrink the life-support system engorging Wall Street. And local races are much easier to win than federal ones.
This 2014 excerpt of the UK’s Telegraph, Oct 9, is by Nick Allen.
Drones deployed by tax inspectors over an upper class area of Buenos Aires found 200 mansions and 100 swimming pools that hadn’t been declared.
The evasions found by the drones amounted to missing tax payments of more than $2 million and owners of the properties have been warned they now face large fines.
Use of drones has been expanding in Argentina and the rest of South America with the unmanned vehicles being deployed for purposes as diverse as locating drug smuggling routes, monitoring farm crops, and looking for archaeological sites.
Most of the drone technology being sold to South American governments and companies – $500 million worth between 2005 and 2012 – comes from Israel, but drones are also being produced cheaply in Mexico.
Ed. Notes: Usually the rich in corrupt countries do not have to worry about tax collectors. Perhaps these are the nouveau riche who have not yet formed close ties with government officials. Governments really do not have the right to punish people for having mansions and pools anyway.
Maybe this invasion of the privacy of tax evaders will push them to support replacing taxes on property with a tax or fee or dues on the value of locations. Then landowners can build all the mansions and pools they want and still not pay any greater amount to government. And drones are not needed to assess or appraise the annual rental value of locations — that can be done from the street and government can save its millions for something else.
In a corrupt country, it is likely the rich acquired their wealth by corrupt means. However, rather than demand a cut later, government should quit being corrupt, keep its hands of private property, and instead recover the socially-generated value of land and resources. All parties need to get clear on what’s mine, what’s yours, and what’s ours.
This 2014 excerpt of Reuters, Spt 24, is by Steve Gorman.
The Obama administration has agreed to pay the Navajo Nation a record $554 million to settle longstanding claims by America’s largest Indian tribe that its funds and natural resources were mishandled for decades by the U.S. government.
The accord, resolving claims that date back as far as 50 years and marking the biggest U.S. legal settlement with a single tribe, will be formally signed at a ceremony in Window Rock, Arizona, the capital of the sprawling Navajo reservation.
The deal stems from litigation accusing the government of mismanaging Navajo trust accounts and resources on more than 14 million acres (5.7 million hectares) of land held in trust for the tribe and leased for such purposes as farming, energy development, logging and mining.
The deal does not preclude the tribe from pursuing future trust claims, or any separate claims over water and uranium pollution on its reservation.
The Navajo Nation is the most populous American Indian tribe, with more than 300,000 members, and the largest by land mass, occupying 27,000 square miles (70,000 sq km) across Arizona, New Mexico, and Utah.
Ed. Notes: Tho’ this settlement can not make up for centuries of cheating, it is good to see the worth of Earth going to more people instead of fewer — indirectly. The US probably won’t pay the Indians actual resource rent but instead merely pay out newly minted money and add to the US debt. That aside, who should receive society’s stream of spending for natural resources? Owners? Residents? Within what borders? Theoretically, Earth’s worth belongs to all Earthlings, but practically, some boundaries must be drawn.
This 2014 excerpt of the UK’s Financial Times, Spt 24, is by Robin Harding.
For almost two centuries, economists on the left and right have regarded the levy on land value as the best of all possible taxes, with almost magical powers of equity and efficiency. It was conservative hero Milton Friedman’s favorite tax, yet promoted just as often by socialists, with the latest echo in this week’s Labour party proposals for a “mansion tax” in the UK.
During the past decade, Altoona Pennsylvania has become the only city in the US to fully adopt LVT. In Altoona, only land – not the buildings standing on it or the people inside them – attracts a tax bill. You can put $175k into making an apartment building nice and you’re not going to see a rise in tax.
As site prices soar in big cities, they create much of the wealth documented by French economist Thomas Piketty. The tax on land creates a powerful incentive to use land to the full. That boosts the supply of houses.
Efficiency is not the only argument for LVT. In 1879, the American journalist and campaigner Henry George wrote Poverty and Progress, . George explained that nobody made the land; land becomes valuable only when a community turns it to productive use, so its earnings should go to society in place of all other taxes.
The great classical economists Adam Smith and David Ricardo also focused on land. Ricardo not only made a fortune by holding British government bonds when Napoleon lost at Waterloo but also invented chunks of economic theory.
Yet LVT is still little used after 200 years. And land taxes rarely last. Altoona began phasing in its tax in 2002, but is already debating whether to repeal or roll it back, like other jurisdictions – from New Zealand to Pittsburgh – where the idea has been tried.
The big political problem is that households do not notice they pay less under the LVT than they otherwise would, but commercial landowners, such as car dealers, feel the tax acutely.
Ed. Notes: Because a tax on your land can make you landless and thus houseless, it is rational for people to not exactly warm up to it. So how to make land taxes or land dues more palatable to land owners? A couple of things.
One, repeal stupid taxes on our efforts so owners have more wherewithal to pay the tax or dues.
And two, disburse the raised revenue back to citizens as a dividend.
Most people — not owning any downtown blocks or oil fields — will come out way ahead.
Not only that, but any good that making people pay rent to their community can do, sharing those recovered rents with everyone can do better. It’s fairer; government does not create land value, community does. And it’s more efficient, enabling people to leave pristine sites alone and to live in small towns if so inclined.
So put the horse before the cart and promote land dividends; land dues will come along automatically.
This 2014 excerpt of Foreign Affairs, Spt/Oct, is by Michael Kazin.
“Work is the producer of all wealth. How does it happen that the working class is always the poorer class? Because some men have devised schemes by which they thrive on the work others do for them.” — Henry George, 1886
George — the Piketty of his day — was the author of Progress and Poverty, a lengthy critique of absentee landownership that sold more copies worldwide than any other economic treatise in the nineteenth century. In 1886, as the candidate of a local labor party, he was nearly elected mayor of New York City. (A 28-year-old Republican named Theodore Roosevelt finished a distant third.) The huge acclaim for his work lasted generations.
What holds Americans back? They tend to believe that every individual has a chance to succeed in the market. The strong socialist and communist movements in other countries made it easy to condemn homegrown leftists as anti-American.
Contrast that to society’s current sensitivity to gay rights — news that a prominent figure has used a slur will flash across the Internet in seconds.
Many entertainers are gay. Many entertainers put forth messages such as equal opportunity for women, racial minorities, and homosexuals; the celebration of sexual pleasure unconnected to reproduction; and celebration of multiculturalism.
Message entertainment is a tradition:
Harriet Beecher Stowe’s fictional exposé of slavery’s horrors, Uncle Tom’s Cabin, published in 1852, outsold every other novel in nineteenth-century America.
Edward Bellamy, author of the 1888 utopian novel Looking Backward, sketched out a future nation run according to Christian socialist principles, nudging countless readers to support labor rights and curbs on private wealth.
Woody Guthrie, the bard of Dust Bowl migrants, influenced songwriters from Bob Dylan to Bruce Springsteen.
It is more pleasurable to see, read, hear, or sing a radical message than it is to join a radical party or movement. Oscar Wilde reportedly once quipped that, despite his sympathy for the left, he wouldn’t like socialism because it would take too many evenings.
Ed. Notes: The biggest factor to explain the success of gays and the failure of unions may be self-esteem. The gays demand total and absolute equality in all spheres of life while the left instead merely goes around begging for jobs and minimum wages and protection from competition. The gays show pride, blatantly, which forces others to accord them a measure of respect. The left shows self-deprecation — we can’t start a business, we can’t get a college degree, we’re willing to do told what we’re told, please just pay us enough to live — which leads others to hold them in low esteem.
Contrast that pleading with the demands of the rich who point blank told the governments of the world to bail them out (over $17 trillion so far) or they’d take down the world’s economies. It was an empty threat; Iceland put their bankers in jail. But the point is, the rich have the chutzpah, they feel no shame about taking more than their share, while the do-gooder reformers can’t even demand what’s already ours, the common wealth, the worth of Earth, a fair share for everyone. What’s the equivalent of the gays insisting upon official recognition of their marriages? It’d be for the left to insist upon an extra income for everyone, an income apart from one’s wages or savings, an income from society’s surplus. The sooner the better.
Meanwhile, a successful strategy is to entertain and enlighten at the same time. Sound like fun? To read Perfect Timing, a sci-fi comedy set in Geotopia, contact us here.
This 2014 excerpt of the New York Times, Spt 23, is by Jon Mooallem.
Larry Ellison, a founder of the Silicon Valley giant Oracle and the fifth-richest man in the world, bought 97 percent of the Hawaiian island of Lanai — not a 97 percent stake in some kind of company, but 97 percent of the physical place.
There is only one town, Lanai City, where virtually all of the island’s 3,200 residents live. Ellison now owned a third of all their houses and apartments; the island’s two Four Seasons-run hotels; the central commons at the heart of Lanai City, called Dole Park, and all the buildings around it; the town swimming pool; the community center; the theater; a grocery store; two golf courses; a wastewater treatment plant; the water company; and a cemetery. In a single sweeping real estate deal, reported to cost $300 million, he had acquired 87,000 of the island’s 90,000 acres. And he would subsequently buy an airline that connects Lanai to Honolulu as well. On all of Lanai, only a handful of businesses — the gas station, the rental-car company, two banks, a credit union and a cafe called Coffee Works — that are neither owned by Ellison nor pay him rent.
Ninety seven percent of Lanai may be a lot of Lanai, but it’s a tiny part of Ellison’s overall empire. Ellison, who stepped down as C.E.O. of Oracle on Sept. 18, is estimated to be worth $46 billion. He made an estimated $78.4 million last year, or about $38,000 an hour. He owns a tremendous amount of stuff — cars, boats, real estate, Japanese antiquities, the BNP Paribas Open tennis tournament, an America’s Cup sailing team, one of Bono’s guitars — and has a reputation for intensity and excess. When Ellison played basketball on the courts on his yachts, he ordered a powerboat to follow the yacht to retrieve balls that go overboard.
Ellison wants to transform it into a premier tourist destination and what he has called “the first economically viable, 100 percent green community”: an innovative, self-sufficient dreamscape of renewable energy, electric cars, and sustainable agriculture. “He is renewing, refreshing, rejuvenating every part of the island,” said a woman named Mimi Evangelista, echoing many locals. “I feel blessed, blessed beyond my wildest dreams.”
After several years of unemployment, people on Lanai were back to work. Roughly half of the adults on the island are employed by Ellison’s company Pulama Lanai or its hotels, and nearly everyone else, it seems, has a sister or uncle who is — or else relies on the company indirectly for a livelihood or lives in a house that Pulama Lanai owns. Lots of people told me that they were instructed not to talk to reporters or that they just didn’t want to risk upsetting the company. One young man delivered a long, seemingly rehearsed preamble, insisting that he absolutely had to remain anonymous and that any opinions he expressed were his alone and did not reflect the views of either Pulama Lanai or his employer, which did business with Pulama and which I also shouldn’t name. I expected something inflammatory, but his opinion was this: “There’s a lot of complainers — some people aren’t happy — but they don’t realize how much they have. It’s just awesome!”
Pulama had intensified a housing shortage on Lanai. Contractors had to be shuttled in from other islands or relocated. A few off-island construction companies bought up housing in Lanai City in anticipation of winning contracts from Pulama, and the island’s independent landlords found they could demand higher rents from the remaining workers. Though the company was busily fixing up cottages to rent out, many displaced locals wound up on Pulama’s indeterminably long waiting list for housing, which they believed Pulama employees were bypassing.
Lanai had been settled by disparate immigrants who had to figure out how to get along, and that history, locals told me, keeps people from dwelling on divisions and differences. (“That’s what makes the place so special,” one woman explained. “We still have aloha together.”) When you live on an island, you can’t afford to make enemies. A compassion grows from that. Now it feels like everything’s being driven from outside by some force that is not part of that tradition.
Everything on the island other water use gets decided by the county government, on Maui, or the state, in Honolulu. While Ellison has declined to meet with Lanai residents, he hosted Alan Arakawa — the mayor of Maui County, which includes Lanai — for lunch on his yacht and held two big-ticket fund-raisers for Gov. Neil Abercrombie before Abercrombie lost his primary in August.) The Planning Commission rejected Pulama’s request for a 30 year permit and issued one for 15 years instead. Without a guarantee of 30 years of operation, the company probably wouldn’t build the plant.
It’s possible that, internally, Ellison’s management team had reasonable explanations for what was being experienced as aloofness and disarray. But down here, on Lanai, locals worried that the inscrutable engineer remaking their island was either turning away from his creation or incapable of manning all those knobs and switches competently. People’s lives were entangled in each decision; all the instability was upsetting their sense of the future.
Ed. Notes: When you let wealth get concentrated, you get one-company towns. You get embarrassingly servile people. Whether the landlord dictator is benign or not, is absentee ownership moral? Is it ethical for one to own the home of another? If local people were not poor, could they not realize sustainable vision by themselves? Well, if the locals don’t like what their new landlord does, hopefully they know what they can do: tax the land or institute land dues with the revenue paid back to residents. That’ll at least turn them into stakeholders with real benefits.
Ed. Notes: Getting yourself educated is no panacea. It’s like when literacy became widespread. Before then, if you could read and write, you had a marketable skill. Afterwards, you had to know how to read and write but that did not distinguish you from millions of others. The skill kept you from the bottom but it no longer helped you to the top.
So get yourself educated to enjoy knowledge. But for income, geonomize society.
Get rid of taxes on labor. Get rid of corporate welfare. Charge dues for holding land so owners keep it at highest use, which in cities opens up tons of opportunities for investors and job-seekers. And from the recovered ground rents, pay citizens a dividend so they need not compete for employment and wages can rise their naturally high level.
These two 2014 excerpts of Spt 21 are from The New York Times by John Schwartz and the Los Angeles Times by Neela Banerjee.
Rockefellers, Heirs to an Oil Fortune, Will Divest Charity of Fossil Fuels
John D. Rockefeller built a vast fortune on oil. Now his heirs are directing their $860 million philanthropic organization, the Rockefeller Brothers Fund, to divest.
In recent years, 180 institutions — including philanthropies, religious organizations, pension funds, and local governments — as well as hundreds of wealthy individual investors have pledged to sell assets tied to fossil fuel companies from their portfolios and to invest in cleaner alternatives. In all, the groups have pledged to divest assets worth more than $50 billion from portfolios, and the individuals more than $1 billion.
Selling those shares are unlikely to have an immediate impact on the companies, given their enormous market capitalizations and cash flow.
The activist investors say their actions, like those of the anti-apartheid divestment fights of the 1980s, could increase international debate and develop energy alternatives.
The movement began a couple years ago on college campuses. The university with the biggest endowment ($32.7 billion), Harvard, has declined to divest, despite pressure from many students and outside organizations.
Not everyone will divest completely or right away and some are divesting just from specific sectors of the fossil fuel industry, such as coal.
The family has also engaged in shareholder activism with Exxon Mobil, the largest successor to Standard Oil. Members have met privately with the company over the years in efforts to get it to moderate its stance on issues pertaining to the environment. They have not caused the company to greatly alter its course.
Climate Change Fears Spur Divestment on Fossil Fuels
The Rockefeller Brothers Fund was created by the grandchildren of the oil magnate. “John D. Rockefeller Sr., the founder of Standard Oil, moved America out of whale oil and into petroleum,” said Stephen Heintz, president of the fund. “If he were alive today, as an astute businessman, he would be moving out of fossil fuels and investing in clean, renewable energy.”
Separately, almost 350 global institutional investors representing more than $24 trillion in assets have called on governments to put a price on carbon dioxide emissions and phase out subsidies to fossil-fuel industries.
Investors are owners of large segments of the global economy as well as custodians of citizens’ savings around the world.
Ed. Notes: It’s good to see people who’re living the easy life — thanks to the successful dirty business of their grandparents — try to make some amends for all the previous damage done. If they do succeed at ending subsidies, that will have a huge impact, since oil companies might not be able to profit without them, especially the implicit subsidy of not having to pay for the damage they do to the environment.
Besides quitting giving money to oil companies, governments should start redirecting money away from oil companies and charge them the full annual rental value of the oil in the ground, pretty much like what Norway does. To balance that, governments should quit taxing wages and returns to safe investments. As long as governments recover the rental value of resources and locations, they’ll have plenty of revenue. They should disburse it to citizens, pretty much like what Alaska does.
All these measures would mean the ascendancy of clean energy in short order.
This 2014 excerpt of the Weekly Wastebasket, Spt 19, is by Taxpayers for Common Sense.
Behind closed doors and with little public input, the Federal Emergency Management Agency changed its rules in ways that will put lives, property, and taxpayer dollars at risk.
Instead of building billion dollar levees or massive flood walls to try to keep flood waters out, FEMA has focused on voluntary buyouts, rebuilding dwellings so they’re above flood heights, and making small-scale infrastructure improvements like re-grading ditches away from homes. The point is not to stop flooding — which will come, eventually — but to mitigate its impact. It can’t harm what isn’t there; structures built specifically to withstand the inevitable flood are more likely to survive without major damage.
During the Great Midwest Flood of 1993, Valmeyer Illinois and Arnold Missouri were just two of the many towns decimated. Both decided to use FEMA’s mitigation programs to move to higher ground. When the “once-in-a-lifetime” floods returned again in 1995, residents watched the river roll through the old town, harming nary a person and causing little financial damage.
But now FEMA has decided to fund large-scale, expensive levees and flood walls. Yet the Army Corps of Engineers already does that. Such large structural flood protections will degrade over time which is unlikely for non-structural protections.
The levees lead to more development within the flood plain. When the big one comes again, more people’s lives and properties can be damaged. Perversely, if you have a levee certified as protecting against that 100-year flood, you aren’t required to buy flood insurance.
Ed. Notes: Just like business, bureaucracy must grow or die. So public debt must grow and eventually the public agency or the entire government must die. They do it partly to hire more bureaucrats, partly to enrich local infrastructure contractors, and partly to inflate land values, since the real state is real estate in this country.
Remember, floods are natural and needed to fertilize flood plains. Levees are artificial and starve floodplains and worsen the flooding downriver from the levees. If there is any role for government in flood prone areas, it is not to encourage more folly. If anything, it should be to require insurance, just as the law requires drivers to carry insurance. Maybe pass building codes or guidelines that’d steer builders toward flood-compatible designs.
Such intelligent designs — e.g., building on stilts — could be more expensive … and more expensive still if there’s a property tax levied on built value. Thus that tax punishes intelligent design. It’d make tons of sense to shift the property tax off buildings, onto locations — or replace it altogether with land dues.
This 2014 excerpt of the UK’s Telegraph, Spt 19, is by Richard Dyson.
At one end of the lifespan are older home owners stuck with mortgages, inadequate pensions and looming care bills. They’re not going to be able to pay off their mortgages and they’ll have to sell up, downsize, take out lifetime loans in the form of equity release – or, like their much younger counterparts, rent.
One in five of British 65 to 69-year-olds is still working, a far higher proportion than in Germany, France, Ireland, Italy, or Spain. Why? To pay off their mortgage or scrape a bit more towards a pension, or both.
At the younger end the problem, people can’t afford to get hold of a mortgage in the first place. Trapped between sky-high rents which prevent the saving of a deposit and prohibitive property prices, they buy later in life and have to borrow more in the process.
The price of a first-time home is £209,000 for July 2014, which is 13.5pc higher than July 2013. That rate of increase – the highest recorded since 2005 – is roughly 10 times the rate of wage growth.
Younger earners are forced either to rent perpetually or live on in the childhood bedrooms of their parents’ homes. Two in three first-time buyers now got help from their parents, up from one in three five years ago. Of today’s children, it predicted that only those from the “wealthiest families will be able to buy a home”.
House buying today is as difficult for buyers with two wages as it was 35 years ago for a single borrower on just their own income. Today’s first-time buyer – putting down an average £30,000 – would need to borrow 3.4 times a single wage, compared with a borrower 35 years ago needing 1.4 times his wage, to purchase the equivalent property.
The average price of a London home creeping above £500,000 for the first time. That would buy at most a two-bedroom flat in any central zone – not even a tiny studio in some inner postcodes – and at most a three-bedroom terrace or semi in an outlying area.
Ed. Notes: Get used to either spending your entire adult life leasing your home or paying a mortgage. Either one is like old-fashioned feudalism. Or, get your sense of righteousness up and demand that the value of land — the part in the cost of housing that goes up — be shared. Land is something nobody made and everybody needs. Land’s value is something the members of society in general generate and deserve a share of. One’s wages and savings are not society’s common wealth — de-tax them — but the worth of Earth is. Once we share it, we’ll no longer see rising location values as a curse but as a blessing.
This 2014 excerpt of Sightline Daily, Spt 17, is by Eric de Place and Nick Abraham.
Communities across Oregon and Washington question the grave safety risks associated with oil — a cargo prone to explode. Yet at the same time, the state governments of both Oregon and Washington are bankrolling coal, oil, and gas infrastructure. Large quantities of public money fund the very same facilities so bitterly opposed by taxpayers.
The governors of each state have voiced strong concern about fossil fuel infrastructure projects while another wing of the executive branch is quietly spending public money on them.
Since 2010, Washington State Investment Board has invested billions in private equity funds focused on fossil fuel which can be directly linked to energy projects in the Northwest.
In 2012, Oregon invested alongside Washington. Oregon Investment Council helped bankroll the Port Westward project, despite site operators bringing in five times more oil than they were legally allowed. Rather than pare back operations at the site, Oregon authorities issued a permit allowing Global Partners to ship nearly 120,000 barrels per day, making it by far the largest operating oil-by-rail facility in the Northwest.
One of the players in shipping oil is Kinder Morgan, responsible for the deadliest fish kill in a decade on the Willamette River and for bribing a Portland ship captain to dump contaminated potash in the Pacific Ocean.
Ed. Notes: Funny that this is treated as news while it’s actually business as usual for government. Sure, it does pay for some programs you may approve of such as parks and schooling, but it also makes possible harmful projects (above) that could not exist without its help.
The programs that many people approve of — parks and schools — could easily exist with private funding if we had economic justice, so that hikers could afford parks and parents could afford teachers. That’s why it’s a good idea to end the discretionary power of politicians and bureaucrats over public revenue and just disburse the money directly to citizens as a dividend.
Where would the surplus revenue come from? From our spending for land and resources and government-granted privileges. Government could use its power to levy fees and institute dues to recover the socially-generated value of nature while at the same time repealing its counterproductive taxes on wages, purchases, and buildings.
Getting this dividend, recipients would care even more about its source — the earth. And no longer getting subsidies or natural rents, the wannabe exploiters would lack both the motive and the means to exploit.
Of course, at the same time, demand for energy must be reduced, but that’s another story, about apt-tech and limited liability, a story with a happy ending.
This 2014 excerpt of the Los Angeles Times, Spt 16, is by Laura J. Nelson and Matt Stevens.
Statewide regulations that take effect Tuesday require drivers to stay at least three feet away from cyclists while passing or face a $35 fine.
If a vehicle is in the buffer zone and a collision occurs that injures the cyclist, the driver could face a $220 fee.
More than 150 cyclists were killed in car collisions in California in 2012. In Los Angeles County, nearly 5,000 cyclists were killed or injured in traffic accidents that year.
Patrol officers are taught to gauge distances and speeds by sight during their training at the CHP academy.
Under the new law, if traffic is too heavy to change lanes — or if other conditions make a three-foot buffer impossible — drivers must slow to a “reasonable and prudent” speed and wait to pass until the cyclist is safe.
Drivers who aren’t sure whether they are more than three feet away should err on the side of caution and give more space than they think is necessary.
California is the 24th state to enact a three-foot passing law. Pennsylvania gives cyclists the biggest buffer, requiring at least four feet between cars and bikes at all times. Cyclists can legally use a full traffic lane on California roads.
Ed. Notes: Long ago, roads were for bikes, horses, and pedestrians, not cars, but cars gradually edged everyone else out. Now, rather than try to reclaim a sliver of road territory, it’d be safer and far more pleasant to make bike lanes at least as separate as sidewalks.
How to pay for it? Well, if drivers paid all the costs of driving on roads — construction, maintenance, police patrol, traffic court, emergency response, long-term collision costs, smog, runoff, etc — then cyclists could certainly pay all the costs of riding on bike lanes.
How would cyclists pay? Have localities recover the value of locations where cyclists congregate. Where you see tons of bikes locked up, there cyclists patronize the closest shops. The owners of the land under those stores would pay a bit higher “land dues” (usually land taxes) to the community. Those socially-generated site values should easily be more than enough.
an answer to a rarely asked question. If price is a reward for production, why do we pay for land, never produced by any of us? What is land price a reward for? Good behavior? How much money do we spend on the nature we use? Who gets it? What do they do with it? (If you answer all these correctly, you’re not a genius but a geoist.) The worth of Earth is enough that were we to collect and share it, we could abolish taxes on the goods we do produce. For example, San Francisco’s Redefining Progress has calculated that Cali-fornia could abolish all state and local taxes were it to collect the values of resources and of using na-ture as a dump. By exorcising the profit motive from depletion and pollution, rent collection could replace bossy regulation. Economies could self-regulate, as the rest of the eco-system does. See how big problems yield to big answers when we ask the right questions?
one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat – or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off – a hostile environment for economan but a cradle for a loving and creative humanity.
a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.
close to the policy of the Garden Cities in England. Founded by Ebenezer Howard over a century ago, residents own the land in common and run the town as a business. Letchworth, the oldest of the model towns, serves residents grandly from bucketfuls of collected land rent (as does the Canadian Province of Alberta from oil royalty). A geonomic town would pay the rent to residents, letting them freely choose personalized services, and also ax taxes. Both geonomics and Howard were inspired by American proto-geonomist Henry George. The movement launched by Howard today in the UK advances the shift of taxes from buildings to locations. A recent report from the Town and Country Planning Association proposes this Property Tax Shift and their journal published research in the potential of land value taxation by Tony Vickers (Vol. 69, Part 5, 2000). (Thanks to James Robertson)
a way to redirect all the money we spend on the nature we use – trillions of dollars annually. We can’t pay the Creator of sites and resources and are mistaken to pay their owners this biggest stream in our economy. Instead, as owners we should pay our neighbors for respecting our claims to land. Owners could pay in land dues to the public treasury, a la Sydney Australia’s land tax, and residents could get back a “rent” dividend, a la Alaska’s oil dividend. We’d pay for owning sites, resources, EM spectrum, or emitting pollutants into the ecosphere, then get a fair share of the recovered revenue. The economy would finally have a thermostat, the dividend. When it’s small, people would work more; when it’s big, they’d work less. Sharing Earth’s worth, we could jettison counterproductive taxes and addictive subsidies. Prices would become precise; things like sprawl, sprayed food, gasoline engines, coal-burning plants would no longer seem cheap; things like compact towns, organic foods, fuel cells, and solar powers would become affordable. Getting shares, people could spend their expanded leisure socializing, making art, enjoying nature, or just chilling. Economies let us produce wealth efficiently; geonomics lets us share it fairly.
the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.
suitable for framing by Green Parties. When Greens began in Germany two decades ago, they defined themselves as neither left nor right but in front. Geonomics fits that description. The Green Parties have their Four Pillars; geonomists have four ways to apply them:
Ecological Wisdom. Want people to use the eco-system wisely? Charge them Rent and, to end corporate license, add surcharges. To minimize these costs, people will use less Earth.
Nonviolence. Want people to settle disputes nonviolently? Set a good example; don’t levy taxes, which rely on the threat of incarceration, to take people’s money. Try quid pro quo fees and dues.
Social Responsibility. Want people to be responsible for their actions? Don’t make basic choices for them by subsidizing services, addicting them to a caretaker state. Let people spend shares of social surplus.
Grassroots Democracy. Better have grassroots prosperity. Remember, political power follows economic. Pay people a Citizens Dividend; to keep it, they’ll show up at the polls, public hearings, and conventions.
more transformation than reform; it’s a step ahead. Harvard economics students this year did petition to change the curriculum, in the wake of the English who caught the dissension from across The Channel. French reformers, who fault conventional economics for conjuring mathematical models of little empirical relevance and being closed to critical and reflective thought, reject this “autism” – or detachment from reality – and dub their offering “post-autistic economics”. Not a bad name, but again, academics define themselves by what they’re not, not by what they are, unlike geonomists. We track rent – the money we spend on the nature we use – and watch it pull all the other economic indicators in its wake. We see economies as part and parcel of the ecosystem, similarly following natural patterns and able to self-regulate more so than allowed, once we quit distorting prices. To align people and planet, we’d replace taxes and subsidies with recovering and sharing rents.
of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.
an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”
Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”
Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.