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It is standard economic theory that the best way to prevent pollution, as with other negative effects, is to make the polluter, hence also the buyer of its products, pay the social cost of the pollution. The economist Arthur Cecil Pigou provided a thorough explanation in his 1920 book The Economics of Welfare. A tax on pollution has since then been called “Pigovian.”
One of the most discussed Pigovian taxes has been on the use of carbon-based fuels such as coal, natural gas, and oil. A “carbon tax” can be on the fuel inputs or on the emission outputs. The most effective Pigovian levy is on the emissions, as that provides an incentive to reduce pollution such as by capturing the carbon before it gets spewed out. If the polluter does not compensate society for dumping on the commons, then in effect it gets subsidized, as it sells its output at less than the total social cost of production.
Many countries have been confronting pollution with inefficient policies such as regulations, credits for offsetting pollution with purchases of forest lands, and permits that can be traded. Australia enacted what was called a “carbon tax” with the Clean Energy Act of 2011, implemented in July 2012. But this was not a Pigovian tax. The Act created a “carbon price mechanism,” a cap-and-trade emissions trading scheme that at first set a price per ton of emissions. This mandated price had the effect of a ‘carbon tax’. But after 2015, the mechanism would have transitioned to a trading scheme.
However, in 2013 the newly elected prime minister sought a repeal of the “carbon tax” emissions trading scheme. In 2014, parliament passed the repeal.
The opponents of emissions taxes claim that this increases costs to business and households. This is narrowly true, but policy should consider the total costs to society. The pollution imposes a social cost on Australia and the rest of the world. This is not a cost paid in explicit money, but costs in the form of illness, a less productive environment, and possible effects on the climate.
The opponents of emission levies overlook that the absence of compensation for the pollution costs is in effect a subsidy to the polluters and their customers. A pollution charge is not a tax in substance, but rather the prevention of this subsidy, and compensation for dumping toxic materials on other people’s property.
The repeal did not provide a replacement, and this creates uncertainty for business about any future anti-pollution policy. This policy uncertainty reduces investment and growth.
The best way to implement a pollution tax is as a replacement of other taxes. Taxes on income, sales, and value added impose the excess burden of higher costs and less output and employment. If politicians are concerned with tax costs, why are they not repealing these taxes? When a pollution tax replaces such market-hampering taxes, the total costs paid by consumers does not increase, but rather shifts in favor of less-polluting products.
Actually, the revenue obtained from Australia’s brief carbon tax was used to compensate taxpayers and affected companies. But the most effective policy would have been to have an explicit tax on pollution instead of a trading scheme, and to lower other tax rates, along with a transitional compensation to those with net losses.
Some opponents claim that Pigovian charges would be good if applied globally, but in a single country, would put its industries at a disadvantage. But that would not happen with a “green tax shift,” the replacement of inefficient taxes with a “green tax” on pollution. A green tax shift would reduce the environmental cost of pollution while not increasing the total tax costs for the country’s economy.
This 2014 excerpt of Motherboard, Jly 24, is by Sam Gustin.
Two cities —- Chattanooga Tennessee and Wilson North Carolina —- have asked the federal government to help them bypass state laws banning them from expanding their community owned, gigabit, high-speed, fiber internet service.
Federal Communications Commission Chairman Tom Wheeler has made clear that he believes the FCC has the authority to preempt state laws that erect barriers to community broadband efforts, which are proliferating around the country.
Many of the areas surrounding Chattanooga are “too rural for it to make economic sense for a major telecom to lay with fiber,” leaving residents in those areas in “a digital desert”.
Tennessee is one of 20 states with laws on the books that pose barriers to community broadband efforts —- laws that in many cases were pushed by cable and telecom industry lobbyists. In states throughout the country, major cable and telecom companies have battled attempts to create community broadband networks.
Rep. Marsha Blackburn, the Tennessee Republican who has received tens of thousands of dollars in campaign contributions from the cable and telecommunications industry, introduced an amendment to a key appropriations bill that would prevent the FCC from preempting such state laws.
Ed. Notes: Your internet bill could be a lot lower if your local government owns the fiber network. So does that make it a go? If your grocery bill were lower, should government own the supermarket chains? Where do you draw the line? Should a line be drawn?
Somethings historically have not been owned by individuals, such as paths, roads, and streets. Even land itself, long enough ago, was not owned by anyone. Of course, that changed. Now, only land that everyone can use in total view of everyone else — roads, sidewalks, parks, beaches, wilderness — is still held in common while land we use privately, such as the sites beneath our homes, has left the commons.
Some atomists want the roads to be owned privately, too. But should we allow that? Should everything be private, or public, or a mix?
Is there a principle to follow to determine what to own individually and what to own together? Some suggest monopoly. For instance, you couldn’t have competing water delivery systems in a city, those pipes constitute a natural monopoly, so the community should own them, to prevent anyone from over-charging for water delivery and raking in an undue fortune.
That model could serve for other utilities, too, such as power delivery and phone cables. That might make it easier to put the unsightly telephone wires underground, along with gas lines, along side water pipes, near any sewer system. Already, customers of public utilities pay much less than customers of privately-owned utilities. The goal of progress should not be to enrich a few owners of monopolies but to reduce the cost of living for everyone. Fiber connections make a logical addition to our resurrected commons.
This 2014 excerpt of Pacific Standard, Jly 24, is by Noah Davis.
Academics bemoan our growing lack of attention span. One infographic reported that our attention spans have dropped from 12 minutes to five. (The rise of infographics being yet another example of humanity’s inability to read anything for more than a few words at a time.) This site claims that attention spans have dropped from 12 seconds in 2000 to eight seconds in 2013 -— or one second shorter than the attention span of a goldfish.
Studies have shown that 32 percent of consumers will start abandoning slow sites between one and five seconds. Bounce rate can be improved by up to 30 percent with the reduction of page size and resulting speed improvements. A one second delay in page load time can result in 11 percent fewer page views, 16 percent decreased customer satisfaction and 7 percent lost conversions.
Leaving a page that isn’t loading isn’t a character fault; it’s smart. You can get the information you were after elsewhere, and you can get it faster.
This 2014 excerpt of CounterPunch, Jly 9, is by Mike Whitney.
Russia provides 30 percent of the gas the EU uses every year. And Gazprom’s prices are competitive too, sometimes well-below market rates which has been the case for Ukraine for years.
Ukraine’s Parliament adopted .. a bill under which up to 49% of the country’s gas pipeline network could be sold to foreign investors. This could pave the way for US or EU companies, which have eyed Ukrainian gas transportation system over the last months. US companies will be in the right spot to gouge Moscow for every drop of natural gas that transits those pipelines.
All Putin has to do is sit-tight and he wins, mainly because the EU needs Moscow’s gas. If energy supplies are terminated or drastically reduced, prices will rise, the EU will slide back into recession, and Washington will take the blame. So Washington has a very small window to draw Putin into the fray, which is why we should expect another false flag incident on a much larger scale than the fire in Odessa. Washington is going to have to do something really big and make it look like it was Moscow’s doing. [One week later, a jetliner crashed in Ukraine, shot down by Russian rebels, the US Government immediately concluded.]
Does the US Government really go to these extremes to enable US oil companies to swell their profits?
The State Department applied a little muscle on Turkmenistan, Afghanistan, Pakistan and India and “voila”, Chevron and Exxon clinched the deal to build the TAPI pipeline. Who is going to protect that 1,000 mile pipeline through hostile Taliban-controlled Afghanistan? US military bases are conveniently located up an down the pipeline route. Coincidence?
From the Wall Street Journal: “Earlier this month, President Obama sent a letter to (Turkmenistan) President Berdimuhamedow emphasizing a common interest in Afghanistan and expressing Obama’s support for TAPI and his desire for a major U.S. firm to construct it.
In Iraq, oil production has surged to its highest level in over 30 years. Who’s raking in the profits? The oil giants: ExxonMobil, BP, and Shell.
Ed. Notes: While it’s hard for us to know what happens behind closed doors, everyone can see that oil and war go hand in hand, not just in Ukraine, the Mideast, and South Asia, but also North Africa and Nigeria, with political violence in Venezuela and a war on the environment and against environmental defenders in the American states of Louisiana, Texas, and Alaska. There are so many good reasons to quit burning fossil fuels, besides war and pollution, such as huge inequality and hierarchy. And ironically, we have the peaceful and clean technologies to switch to — solar, batteries, fuel cells, etc plus conservation — but political and institutional hurdles are almost insurmountable. About all we can do is push for a truly free market.
Corporate Taxation Is Inefficient
This 2014 excerpt of the New York Times, Jly 21, is by Tim Worstall, senior fellow at the Adam Smith Institute in London and a contributor to Forbes.
Corporate taxation is hidden taxation: everyone thinks that someone else is paying it, not them, which is why politicians love it so much. It’s a grossly inefficient tax. Taxing economic activity means that we will have less economic activity: the economy will be smaller than it would be without tax.
Government should raise revenue at the least cost in reduced economic activity. The deadweight cost, that lost activity, is higher for capital and corporate taxation than it is for income taxation, higher than for consumption and all higher than property taxation.
Optimal taxation theory tells us that we should therefore eliminate capital and corporate taxation and move to a progressive consumption tax and perhaps a land value tax.
Ed. Notes: Brave of him to cite land as a tax base (onceagain). Of course he had to cover his butt and add “perhaps”. Which is the difference between mainstream media, constantly catering to fear, and alternative media, always trying to lay it on the line.
Bear in mind that “land” here refers to location, not just downtowns but also sites above oil fields and the oil itself. And not just tangible land but also the intangible, such as the EM spectrum (a frequency is a location there). And not just land, the good, but also ecosystem, the service. Finally, what the tax or fee or lease or dues falls on is not land, the stock, but its rent, the flow.
This flow of money that we spend for the nature we use need not fund government; government can get by charging fees for its services. Instead, all those rents for all those locations could be disbursed as dividends to citizens. Receiving a fair share, citizens could get by with much less government, making the whole taxation question much more tolerable.
Hans Bruyninckx, the director of the European Environment Agency, has urged ministers to carry out fiscal reforms, such as moving tax from labour to activities that damage the environment.
“Well-designed environmental taxes can reduce pollution and increase resource efficiency in a very cost-effective way, and at the same time promote employment, economic growth and social fairness.”
The world does not have to choose between job creation and preserving the environment.
Bruyninckx added that environmental taxes were “still an under-used tool”. Environmental taxes currently account for 2.4% of EU GDP.
The informal ministerial comes after the European Commission published proposals earlier this month aimed at pushing the EU towards a ‘circular economy’, with higher recycling targets and a phase-out of landfill.
Ed. Notes: Shifting taxes from wages to pollution is one of three big green tax shifts. Another is to shift from purchases (e.g., VAT) to extraction of resources. The most powerful shift is the least obvious and well known: off buildings onto exclusive use of locations.
When owners pay land rent to their community rather than receive it from tenants or buyers, then they take no more land than they need and use that wisely. In urban areas, using land efficiently makes for compact towns that use fewer materials (the goal of the depletion tax) and less energy (the aim of the pollution tax).
Other powerful advantages of recovering rents is that doing so grows the tax base rather than shrinks it (since owners develop their lots), raising enough revenue to afford a dividend to citizens, merging everyone’s need for money with their love for Earth. Proposing land dues challenges society to see the worth of Earth as part of the commons. And shifting the property tax off buildings, onto land is something localities can do without waiting for states or nations or unions. So get busy geonomizing now.
More than a thousand people showed up outside Cobo Center in downtown Detroit, calling for an immediate moratorium on service shutoffs by the city’s water department.
Among them was “Avengers” actor Mark Ruffalo, who appeared unexpectedly, calling on others to join the demonstration.
Also appearing at the rally were UAW President Dennis Williams and Congressman John Conyers.
“Water should be available to everybody,” Conyers said. “It shouldn’t be something that only people who can afford it can get.”
“Right now in a household there is child thirsty who cannot have a drink,” Williams said. “Right now there is an elderly person who is ill that needs fresh water.”
The demonstration was organized by the group National Nurses United, which claims the shutoffs pose a public health emergency and that shutting off water is inhumane.
People who can’t afford water have to choose between medications and food, rent or mortgage payment, and water.
The Detroit Department of Water and Sewerage stepped up the shutoffs in March to collect some of the nearly $90 million owed by residents, businesses and other customers with past-due accounts. Through June, more than $43 million was owed on over 80,000 city residential accounts.
To get water back on requires a title deed because so many homes have squatters.
Ed. Notes: Is the City charging more than the cost of delivering water? If so, are they using the profit to lower bad taxes or pay residents a dividend? And why are so many residents poor?
Poverty has an easy economic solution, and that is geonomics.
One, don’t subsidize insiders, that only makes it easier for them beat competitors, and competitors keep prices low and wages high.
Two, don’t tax people’s efforts, that only makes it harder to hire helpers.
Three, don’t fail to recover socially-generated land rents, which merely rewards speculators; when owners pay “land dues” they put locations to best use, which attracts investment and creates employment. And
Four, disburse surplus public revenue as a dividend, which is substantial in cities where site values are higher than skyscrapers. Dividends mean people can always afford water.
The problem is not that there isn’t any solution. The problem is that people have no interest in fundamental solutions and prefer to just blame one another: rich are greedy, poor are lazy. If humans could get over that and rekindle their innate curiosity, they’ll discover what works — geonomics.
This 2014 excerpt of Vanity Fair, July issue, is by Michael Kinsley.
From the remarkable reaction in this country to Thomas Piketty’s fairly dense book of translated French philosophy, it is evident that many people believe that a “reset” in the distribution of income or wealth would be no bad thing.
His point — the return on invested capital exceeds the rate of economic growth — means the poor can never catch up. The mean income of the top fifth back in 1970 was 11 times that of the bottom fifth. Today it is more like 16 times as much.
The growing income-inequality figures we see today are wild underestimates. Wealth is larger and even more concentrated than annual income is. Most of it grows completely untaxed, year after year, because you don’t pay taxes on an investment until you sell it, which the very richest people never need to do. They live off the interest.
Suppose you take away the entire incomes of the 1 percent. That would be about $1.5 million from each. Transfer all the money to everyone else. How much money would each household in the 99 percent get? About $15,000. That’d more than double the incomes of those at the bottom of the heap.
Suppose we levy a mere 10-percent-of-income surcharge on the top 20 percent of family incomes, to be spread among the bottom 40 percent (households with incomes up to about $40,000). That’d be about $4,000 per household.
Frenchman Thomas Piketty and his book remind me of my favorite economist, the 19th-century American Henry George, and his best-selling book, Progress and Poverty (1879). Both men’s books offer a comprehensive explanation of the world, in particular the problem of poverty. Both men acknowledge the importance of market incentives and entrepreneurship and the evils of protectionism and all of that good conservative stuff, even as they rail against the plutocrats. Both think we can end or reduce inequality without giving up the benefits of market.
And both see the answer in a new tax. Henry George advocated a land tax to eliminate the need for any other revenue source. That’s why members of his briefly influential movement were called “single-taxers.”
Ed. Notes: People plot to tax wealth after the rich already got it rather than redirect our spending so that no insiders could corral it and become the 1%. “Our spending” here refers to both public and private. Take public spending: we could abolish corporate welfare and disburse revenue directly to citizens as a dividend.
Take private spending. Presently, our spending for things that nobody created — like land, natural resources, the EM spectrum, ecosystem services, and privileges that force consumers to pay “tolls” (jacked up prices) to the privilege holders — go to banks, oil companies, and other insiders, creating that 1%. Instead, we could institute land dues rather than tax buildings, purchases, and earned incomes. When the public gets those values (via the dividend), then they’re not available for the more grasping to amass into fortunes.
We could stop worrying about how much anyone has by redirecting what everyone spends for our common heritage, which should belong to us all already. It’s called geonomics and it has worked wherever tried, to the degree tried.
This 2014 excerpt of EcoWatch, Jly 15, is by Elliott Negin of the Union of Concerned Scientists.
A majority or plurality of residents in red congressional districts and states disagreed with their blue district and state counterparts on gun control, abortion, and gay rights.
But approximately 80 percent of both blue and red district respondents agree that the U.S. has “a responsibility to take steps to deal with climate change.”
Americans are prepared to make modest sacrifices to avoid the worst consequences of global warming. And slim majorities —- 54.7 in blue districts and 51.5 percent in red districts —- say “climate change should be given priority even if it causes slower economic growth and loss of jobs.”
Yet Congress is more concerned about protecting special interests than the public interest. Since 2004, utilities and fossil fuel industries have spent more than $2.6 billion to lobby Capitol Hill. Over that time, Congress has beaten back attempts to put an end to the nearly $5 billion in annual tax breaks and subsidies afforded the oil and gas industry.
South Florida, a red state, is already dealing with routine flooding from high tides and heavy rainfalls. Sea levels off the coast have jumped 5 to 8 inches over the last 50 years. Elsewhere, Americans have been grappling with prolonged droughts, extreme precipitation, and heat waves.
Ed. Notes: People in general are often ahead of politicians on many issues, such as socialized medical insurance (which might be better than the present US system but not as good as, say, a more open, competent, and competitive system). Because people can be enlightened while politicians are not, that makes it a mistake to view the pronouncements of government officials as the only reality while ignoring the values and openness of one’s neighbors. If do-gooders want to really change the world, they will have to focus less of their energy on their opponents and more on you and me. Instead of us being ignored by the powers-that-be, we must ignore them and pay attention to ourselves, creating a reality that anyone who wants to be in power can not ignore. According to thinkers like Gandhi and Margaret Mead, that’s the only way fundamental policies — like major pocketbook issues — can ever change.
I live in California. It’s a great state. Too great.
A proposition to split California into six states may be on the ballot in 2016. “Six Californias” has announced that it has collected sufficient signatures. Why six? California’s population of over 38 million is six times lager than the US state average. The ruling powers may find a way to block the proposal, as some opponents claim that the signature gathering was unlawful. If “Six Californias” does get on the 2016 ballot, in my judgment, this will be a rare chance for fundamental reforms.
Many Californians have said that the state is too big to govern effectively. But the governance problem is not size, but structure. After the property-tax limiting Proposition 13 was adopted in 1978, taxes and political power shifted from the counties and cities to the state government. California could be governed well if decentralized, but the concentration of fiscal power to the state has made the state among the highest taxed and worst regulated in the USA.
There have been many attempts to reform the lengthy California constitution, but they have all failed. Attempts to replace the Proposition 13 have gone nowhere. The best option is to start over. Creating new states would provide six fresh starts.
Critics of the six-state plan say that the wealth of the new Californias would be unequal. The Silicon Valley state would include the high-tech wealthy counties of San Francisco, San Mateo, and Santa Clara, among others. The promoter of this initiative, Timothy Drapers, happens to be a Silicon Valley entrepreneur.
But the current 50 US states are also unequal in wealth. The income inequality problem is a national and global problem. Income can become more equal without hurting production by collecting the land rent and distributing it equally among the population. Since the critics of Six Californias are not proposing or even discussing this most effective way to equalize income, their complaints should be dismissed as irrelevant, immaterial, and incompetent.
US states have been split in the past. Maine was split off from Massachusetts in 1820, and West Virginia was carved out of Virginia in 1863.
If the initiative passes, a board of commissioners would draw up a plan to divide the state’s assets and liabilities among the six new states. A good way to do this would be to divide the value of the assets by population, but to divide the liabilities (including both the official debt and the unfunded liabilities such as promised pensions) by the wealth of each state. That would go a ways to deal with the inequality problem.
California’s complex water rights could be simplified by eliminating subsidies, instead charging all users the market price of water. There could continue to be a unified water system with a water commission with representatives from the six state.
If this measure is approved by the voters and by Congress, each state will design a constitution. The new constitutions should be brief, like the US Constitution, in contrast to the lengthy current California constitution that contains many provisions best left to statute law.
The new constitutions should retain the declaration of rights in the current state constitution, including Article I, Section 24: “This declaration of rights may not be construed to impair or deny others retained by the people.” This wording, similar to the US 9th Amendment, recognizes the existence of natural and common-law rights. This text should be strengthened with something like this: “These rights of the people include the natural right to do anything which does not coercively invade the properties and bodies of others, notwithstanding any state interest or police power.”
These new constitutions will be an opportunity to replace California’s market-hampering tax system with economy-enhancing levies on pollution and land value. There should be a parallel initiative stating that if Six Californias passes, the states will collect all the land rent within their jurisdictions and distribute the rent to all six states based on their populations. A tax on land value is by itself market enhancing, better than neutral, because it promotes an efficient use of land, it reduces housing costs for lower-income folks, and eliminates real-estate bubbles. Combined with the elimination of taxes on wages, business profits, and goods, the prosperity tax shift would raise wages and make California the best place in the world for labor and business.
This is all a dream, but the past dreams of abolishing slavery, having equal rights for women, and eliminating forced segregation all came true. This proposition will at least provide a platform for discussing such fundamental reforms.
This 2014 excerpt of the Sacramento Bee, Jly 15, is by Dan Walters.
Economist Anne Osborn Krueger coined the term “rent-seeking” in 1974, the year in which Jerry Brown was first elected governor of California. There is a connection between those two events.
“Rent-seekers” came to mean those who use government spending to enhance their private investments, giving hundreds of millions of dollars in subsidies from the state treasury and consumers’ wallets to a favored few.
At Brown’s behest, the Legislature abolished two long-standing subsidy programs that had been largely controlled by local governments, redevelopment and “enterprise zones.”
The rationale was that they had become expensive boondoggles that rarely, if ever, resulted in the private, job-creating investment and urban renewal they were supposed to produce.
They were to be replaced, although it wasn’t apparent at the time, with state-controlled “incentives” for investment, including a sales tax break for manufacturing equipment and a special pot that Brown could use to lure and/or retain business.
Simultaneously, the state was embarking on a massive overhaul of its electric power system, aimed at replacing fossil fuel and nuclear generation with “renewable” power and providing billions of dollars in subsidies, either from taxpayers or utility ratepayers.
And it also was pushing alternatives to gasoline-powered cars, such as electric vehicles, again with subsidies. Elon Musk is building Tesla electric cars. They get direct injections of money and zero-emission credits that Tesla sells to other firms.
Musk’s Solar City has become the state’s leading installer of photovoltaic electric panels, his SpaceX firm aspires to be the nation’s leading conveyor of satellites, and he’s planning an immense battery factory.
This year alone, Brown signed one budget “trailer bill” that extends subsidies for solar panels, another that exempts some SpaceX property from taxes, and a third to subsidize construction of a new strategic bomber. It includes an obscure amendment to subsidize a battery factory. Legislators were never told about that provision.
Ed. Notes: If Musk needs state favors, how good are his ideas? If investors won’t make them happen, why should taxpayers? Sure, I’d love to live in an economy with industries that were lean and clean. But to get there, I’d rather make polluters pay than let insiders engorge. I’d make only polluters, extractors, site-occupiers, and privilege-holders pay and not tax anyone’s buildings, purchases, or valid earnings or over-charge for permits. To top it off, I’d disburse surplus revenue to citizens as a dividend. Receiving such support, independent inventors would be freed to contribute their, often break-thru, ideas. The liberated market — not political dealing — would provide the technological progress the environment needs.
This 2014 excerpt of Squarely Rooted, Jly 14, is by M.
Land may be the key factor behind many of Piketty’s broader conclusions about capital, explaining why the returns to capital decline much more slowly than models with traditional assumptions would predict. E.g., progress hasn’t dampened the return to land on which computing-centric industries are based; quite the contrary (see Silicon Valley). Land (discounting structures) is a large share of national “capital”.
In a society where a handful of people control most of the wealth, even if that wealth is taxed at just-below-confiscatory rates, they still own most of the wealth. That gives them tremendous authority, first-and-foremost over the workplace, but also over politics and the media, and by extension an outsized role in dictating mores, norms, and values.
I deliberately capitalized “Economics” so at to distinguish it from “economics”. Capital-E Economics is a rigid dogma, complete with unchallengeable precepts and inscrutable texts whose minutiae are debated vigorously by devoted inner-circle keepers of the flame, that has stifled public debate about innumerable issues of overwhelming importance since the end of the Cold War.
Ed. Notes: Piketty wants to try tax the wealth the rich have piled up. Much more efficient — and fair — would be to deny them that wealth in the first place. That wealth that they are helping themselves to just happens to be our common wealth already anyway. So what are we waiting for? Let’s share it. As long as we don’t, as long as we leave it on the table for the more grasping among us to grab by hook or crook (or both), then we create the elite and the impoverished and all the problems that go along with an overly hierarchized society. Let’s get rid of corporate welfare and the rest of subsidies. Let’s get rid of taxes on our efforts. Instead, let’s pay in land dues and use that revenue to disburse “rent” dividends to us all. Sort of like Singapore does. That city state is hailed as a capitalist paradise but it’s pretty geonomic, too.
This 2014 excerpt of TakePart, Jly 12, is by Liz Dwyer.
According to the United Nations, of the top ten most common topics in tweets [over what time frame was not stated], the bottom rough one third of them are about environmental issues (about two million each), the middle rough one third are about political issues (well over two million each), and the top third, by far, are about getting a good paying job (from five to seven million). Number 8 was education, which is preparation for flinging oneself into the job market. Number 9 was discrimination, which flings some of us out of the job market. And number 10 was employment itself.
Ed. Notes: So if you want to interest people in reform, tell them how your reform creates jobs. Right? Yes, but bear in mind people who need money and see jobs as the way to get it probably don’t want an economics lesson. They often jump on anything that promises them jobs, even if it does not work out that way, such as giving tax breaks to big business, or if it is something not really good for the community, like a prison.
Worse, offering jobs reinforces the prevailing worldview. Touting jobs agrees with several implied false assumptions:
getting paid and creating value are the same — even if you’re just shuffling paper in an insurance office — while unpaid work is not worthy of pay — even if it is planting trees which exhale oxygen;
people are not good enough to start their own business but must have a boss forever; and
jobs can be conjured up while supposedly technological progress is not a natural process destroying them;
More than jobs, people need an extra income without working. Why? Because society automatically generates a surplus that does not attach itself to anyone’s labor or capital but to the region’s land and to the government-granted privileges such as banking charters and other corporate favors.
Americans spend trillions of dollars to use parts of nature, mostly to the few holders of valuable privileges. Hence now much of society’s surplus goes to the 1% whereas this common wealth should go to members of society equally.
Ironically, if we all did get a Citizen’s Dividend, then we could shrink the workweek which would create more jobs. We’d have more security to negotiate higher wages. We’d even have enough leverage to launch out own startups. It’s called geonomics and it has worked wherever tried.
This 2014 excerpt of Thom’s Blog, Jly 11 is by Thom Hartmann.
Oil Change International figures the oil, gas, and coal industries raked in $21.6 billion dollars in state and federal subsidies in 2013 alone. In comparison, the entire 2013 budget request for the Department of Labor was only $12 billion dollars, and the Environmental Protection Agency only requested about $8 billion. We’re giving the industry that destroys our planet more than two and half times the amount we pay to protect it.
Not only do these subsidies pad the pockets of oil companies, but they put tax payers on the hook for the social costs of destroying our planet. If Big Oil had to pay the true cost of fossil fuel extraction, they wouldn’t be able to drill away without a second thought about the communities and the lives that they devastate in the process.
Ed. Notes: If oil companies had to pay their way, they could not even turn a profit. No extractor could. By subsidizing them, making them profitable, we are paying for our own destruction.
A better way is to not subsidize anybody for anything. Instead, government would merely distribute a dividend to citizens from society’s surplus. What’s that? Earth’s worth. It’s all the money that we spend for the nature we use. The land portion of mortgages. The value of oil in the ground embedded in the price of gasoline. Such “rents” are embedded in the price of everything we buy.
With its power to tax or fine or charge fees or institute dues, government could redirect this spending from oil companies and banks, etc, into the public treasury then back out as a Citizen’s Dividend. Even oil company owners and bosses would get their share. But it’d be a tiny fraction of the subsidies they’re getting now.
This 2014 excerpt of AlJazeera, Jly 11, is by Peter Moskowitz.
As the number of bike riders seems to increase dramatically in cities across the country, there’s been a backlash from people who say bikes are dangerous, and that the added infrastructure that comes with them — namely bike lanes — is an unnecessary burden in a time of large budget shortfalls.
But a new study concludes that policies and projects supportive of bike lanes are worth every penny, and then some. For every dollar spent on bike-related infrastructure, cities can receive anywhere from $6 to $24 in cost savings in the form of reductions to pollution, traffic congestion, and health care costs from decreased traffic fatalities and increased exercise, which alone is the biggest cost savings.
The larger the investment in bike infrastructure, the more people would be encouraged to commute by bike, and therefore the larger the return on investment would be.
Ed. Notes: While some people think bike lanes give privileged travel to the few at a cost to the many, it’s not true. If a road is a right-of-way, then that means anyone has the right to traverse it — not just drivers but walkers, pedalers, horseback mounties, bus riders, you name it. It’s because cars endanger others — not that the others endanger anyone — that cars get to hog what belongs to all.
Roads have not always been the lone province of cars. Not even a 100 years ago, roads were traversed by everyone, as they still are in most places on the planet. But when cars first came out, they were playthings for the rich, and the rich lobbied governments to pave roads for them — at a cost to everyone else — which was an improvement that only cars needed; bikes and horses were fine with dirt roads.
Today, drivers do not come anywhere close to paying for roads or other costs they impose on the rest of society. It’s not the tax on gas but the money in the general fund from other taxes that pay for all this: highway patrols, traffic courts, accident responses, health care for the uninsured, disability payments for those unable to return to work, wasted time of pedestrians and cyclists delayed by automobile congestion, pollution from exhaust, oily runoff, and dust, not to mention sprawling land use that stretches out trip distances, wasting energy and materials.
What’s really needed are not “sidelanes” along streets for bikes like sidewalks for pedestrians so much as entirely separate bike ways. In Germany, bike paths can be a quarter of a mile from highways. Let cyclists enjoy the experience of riding a bike!
To be fair and adhere to the User Pays Principle, there is a way to fund separated bikeways. Government need not register bikes and tax them or tax bike shops. Instead, government could tax land or institute land dues. Land alongside bike paths is of higher value than land alongside roads. Locations where bike paths intersect are of higher value still. Those site rents could be recovered by government and be dedicated to building and maintaining the network of bike lanes. And without any drunk young male car drivers tossing out glass bottles on a weekend night, you won’t even have to worry about flat tires!
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 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.
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?
as unfamiliar as geo-economics. The latter is a course some universities offer that combines geography and economics. A UN newsletter, Go Between (57, Apr/May ’96; thanks, Pat Aller), cited an Asian conference on geopolitics and “geoeconomics”. The abbreviated term ‘geonomics” is the name of an institute on Middlebury College campus and of a show on CNBC. Both entities use the neologism to mean “global economics”, in particular world trade. We use geonomics entirely differently, to refer to the money people spend on the nature they use, how letting this flow collect in a few pockets creates class and poverty and assaults upon the environment, and how, on the other hand, sharing this rental flow creates equality, prosperity, and a people/planet harmony. This flow of natural rent, several trillions dollars in the US each year, shapes society and belongs to society.
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.
an economic policy based on the earth’s natural patterns. Eco-systems self-regulate by using feedback loops to keep balance. Can economies do likewise? Why don’t they now produce efficiently and distribute fairly? The answers lie in the money we spend on the earth we use. To attain people/planet harmony, that financial flow from sites and resources must visit each of us. Our agent, government, must collect this natural rent via fees and disburse the collected revenue via dividends. And, it must forgo taxes on homes and earnings, and quit subsidies of either the needy or the greedy. As our steward, government must also collect Ecology Security Deposits, require Restoration Insurance, and auction off the occasional Emissions Permit. And that’s about it – were nature our model.
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.
in part 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.
an alternative to conventional land trusts. Just as it seems some functions should not be left to the market – private courts and cops invite corruption (while private mediation is fine) – just so some land should not be left in the market. That said, sacred sites do not make much of a model for treating the vast acreage of land that we need to use. So the usual trust model, which is anti-use and counter-market, can not apply where it’s needed most. Trust proponents worry about ownership and control – two very human ambitions – but they’re not central. Supposedly, we the people own millions acres – acres that private corporations treat as private fiefdoms – and conversely, the Nature Conservancy owns wilderness the public can some places use as parks. So, the issue is not who owns but who gets the rent – ideally, all of us.
a study of Earth’s economic worth, of the money we spend on the nature we use, trillions of dollars each year. We spend most to be with our own kind; land value follows population density. Besides nearness to downtowns, we also pay for proximity to good schools, lovely views, soil fertility, etc. These advantages, sellers did not create. So we pay the wrong people for land. Instead, we should pay our neighbors. They generate land’s value and deserve compensation for keeping off ours, as they’d pay us for keeping off theirs. It’s mutual compensation: we’d replace taxes with land dues – a bit like Hong Kong does – and replace subsidies with “rent” dividends to area residents – a bit like Alaska does with oil revenue. Both taxes and subsidies – however fair or not – are costly and distort the prices of the goods taxed and the services subsidized. By replacing them and letting prices become precise, we reveal the real costs of output, the real values of consumers. Then, just by following the bottom line, people can choose to conserve and prosper automatically. A community could start by shifting its property tax off buildings, onto land – a bit like a score of towns in Pennsylvania do; every place that has done it has benefited.
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)