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This 2014 excerpt of Open Secrets, Aug 28, by Robert Maguire.
Social welfare organizations which claim educating or informing the public as a part of their mission aren’t supposed to have politics as their primary purpose and aren’t required to disclose their donors. Political spending by these groups is reaching new heights: This week, it crested $50 million, a record for this point in an election cycle, and more than seven times beyond the outlays by such groups at this time in the last midterms.
And that’s just the amount that has been reported to the Federal Election Commission, which doesn’t include tens of millions more spent on “issue ads” that aired earlier in the cycle and didn’t have to be reported to the agency.
Lying in the name of “educating voters” isn’t new. Ads by such groups contain glaring mistakes, according to independent fact checkers. Well-funded nonprofits run ads outside the reporting window – often making false or misleading claims about a candidate. Then, months later, they run ads advocating openly for the candidate’s defeat, often recycling the same false or misleading claims.
Based on spending in previous cycles, 2014 dark money is projected to set a new record. If the rate of spending from previous cycles continues, the totals could reach upwards of $730 million or — if the rate seen in the last midterm holds — edge close to $1 billion.
And despite the boom in liberal spending, these groups still don’t compare to their conservative counterparts.
Ed. Notes: Wouldn’t it be great to live in a nation where lying to the public is illegal? If only!
That aside, even if conservatives were not allowed to spend so much, or if liberals were able to spend more, how much difference would that make? Liberals would be able to influence more people but as long as they spout the same message, they will still fail to reach a huge segment of the population. Since the use of money in politics is not shrinking but expanding, liberals might want to rethink their message.
Find the words that no matter how much money is spent resonates with a majority. Just as grammarians have not been able to stop the spread of “like”, conservatives would be unable to stop the acceptance of economic justice if liberals could express it effectively, as well as the last five words of the Pledge Allegiance: “with liberty and justice for all.”
This 2014 excerpt of Sightline Daily, Aug 27, is by Jerrell Whitehead.
By raising the cost of land speculation, a land-value tax (LVT) would create clear financial incentives to develop underutilized properties near the urban core—helping to create new homes and businesses in the very places where demand is greatest.
But there’s a significant obstacle to implementing LVT in Washington: the State constitution. “All taxes shall be uniform upon the same class of property…” Would this requirement for “uniform” taxation make taxing land, not improvements, unconstitutional?
According to The Washington State Constitution: A Reference Guide, “Virtually every substantive word in Section I has been litigated.” Would state courts define the land-value tax as a permissible excise tax or special assessment? The answer may lie with the skill of lawyers drafting such a tax, and with the temperament of the judges considering a challenge, and if the legal and political forces align.
Ed. Notes: States have other charges that evade their constitutions, such as quid pro quo fees (as for parking). The deed fee can be raised and made annual or monthly. A periodic Displacement Fee could be created, charging owners for displacing everyone else and every other usage but their own.
Even better, the captured land rents could be kept out of the general fund and not be made available to politicians but instead enter a trust fund and be used only for disbursing to citizens. That’d make the charge a non-tax. The payment could be a straight dividend that the recipient could spend it anyway they like a la Alaska’s oil share or Singapore’s land dividend, or it could be a housing voucher good for renting, leasing, buying outright, mortgages, a la Aspen CO’s housing assistance, or making improvements.
Whatever form the fee, it must first be passed into law, which naturally requires political support. Support for asking landowners to hand over all their “housing equity” — actually, potential land rents — to politicians has not been fanatically forthcoming (quite the opposite). A better strategy than trying to pass an unpopular tax is to pass a popular dividend that happens to need a fee to fund it.
This 2014 excerpt of PBS News Hour, Aug 27, is by Peter Barnes.
In his new book, “With Liberty and Dividends For All: How to Save Our Middle Class When Jobs Don’t Pay Enough,” Barnes argues for a national dividends program like Alaska’s oil share that could distribute to all Americans as much as $5,000 per year in legitimate property income.
Creating millions of new jobs in a globalized, automated economy is hard. Workers are expendable — often they’re literally “temps” — and their benefits are shrinking. In unionized industries like autos and airlines, two-tier contracts are now the norm. This means that younger workers get paid substantially less than older ones for doing the same work. In the Labor Department’s latest list of occupations with the greatest projected job growth, only one out of six pays over $60,000 a year.
Fortunately, labor income doesn’t exhaust our possibilities. Since 1980, the flow of non-labor income has grown to around a third of every dollar Americans receive. From where might we all get some non-labor income?
We could pay equal dividends to all from wealth we own together. It is predistribution; it allocates income more fairly in the first place so there’s less need to redistribute later.
Dividends could come from a nationwide fund similar to the Alaska Permanent Fund, which, since 1982, has used the state’s oil wealth to pay equal yearly dividends to all Alaskans. Dividends wouldn’t come from taking people’s already-received income; they’d come from fees paid by businesses for value received. A bill recently introduced by Rep. Chris Van Hollen, D-M.D., would generate money for dividends by auctioning a steadily declining number of carbon permits.
Over time, according to my calculations, such dividends could grow to about $5,000 per person per year.
Dividends from common wealth unite society by putting all its members in the same boat. The income everyone receives is a right, not a handout. This changes the story, the psychology, and the politics.
Ed. Notes: That’s so cool to see a word I coined in print: predistribution. Another is Citizen’s Dividend. One more is geonomics.
Since kids don’t have accounts and don’t contribute much to the creation of common wealth — the worth of Earth, our spending for land, resources, EM spectrum, etc — paying registered voters a share of this spending stream would raise the dividend to $1k per month.
That extra income could be coupled with much lower counterproductive taxes on earnings, purchases, and buildings. The public treasury won’t lose a penny as long as government recovers the socially-generated value of locations, which goes up when taxes on our efforts go down.
Such tax reform could also be coupled with spending reform, spelling the end of corporate welfare and bridges to nowhere (speaking of Alaska) and lots of other waste.
What’s needed is for regular people to feel enough self-esteem to demand a fair share of what’s already ours just like the rich feel when winning an enormous share of what’s not theirs. We’re not broke. There is a surplus. It just needs to be shared. People need to quit demanding jobs and start demanding justice.
This 2014 excerpt of The Guardian, Aug 18, is by Warwick Smith.
Who benefits from the privatisation of public assets? The buyer. Such assets will only be purchased if they stand to make a return. However, the biggest winners when multiple asset sales are considered are the banks. Privatised assets are almost always bought with borrowed money. So, while individual companies or consortia might benefit from the purchase of a government asset, it’s the banks and other lenders who benefit from a culture of privatisation.
The strategy generally employed by the buyer of public assets is to privatise the profits and shift costs onto the public. It is the public who are ultimately paying the interest; either through a lower sale price of the asset, through the increased cost of the services, or through reduced services.
Understand that these companies’ first interest is not in the efficient and effective supply of service. They just want profit. If they can most easily maximise profits by being good providers of a service that’s what they’ll do but it’s easier to exploit loopholes in regulations. It’s very difficult to write regulations that are watertight when it comes to these sorts of asset sales.
There are plenty of sound ways to fund infrastructure, but land taxes are the best and also the least likely to be used. Taxes that capture uplift in land values (sometimes called betterment taxes) can be effectively used to recoup spending on a lot of public infrastructure. For well prioritised projects, this uplift in land value is well in excess of the cost of the infrastructure.
If we could have fantastic public transport in our major cities that pays for itself, why aren’t we already doing it? There are three major hurdles to implementing greater use of land taxes: the banks, the real estate industry and property investors. The first two are very powerful political lobby groups and very generous political donors, and the last is quite a large voting bloc.
That the banks are the principal beneficiaries of ever-climbing housing prices is yet another largely overlooked fact. The more banks can lend people to buy houses, the more expensive real estate gets, the more money banks get to lend and the more profit they make. It’s a beautiful self-perpetuating gravy train.
Politicians feign concern about housing affordability and how hard it is for first home buyers to get into the market but they don’t enact any of the policy measures that we know would improve affordability for fear of upsetting the financial industry, the real estate industry and all the “mum and dad” property investors who’ve been lured into real estate by distortionary government policies like negative gearing and concessional treatment of capital gains (both of which are effectively corporate welfare for the banks).
Ed. Notes: Joseph Stiglitz, who used to be the chief economist for the World Bank, put his simple fact into a formula (every worthy project can pay for itself with new land values) that he called the Henry George Theorem.
This 2014 excerpt of Guardian Liberty Voice, Aug 26, is by Laura Oneale.
Julius Malema was recently placed under sequestration and the court extended the date of the sequestration hearing to December 2014. In the meantime, Malema must start paying back taxes to the South African Revenue Services (SARS).
Malema said tax laws are not known to black people, including African National Congress (ANC) party members and most ordinary citizens. It was all new and people were still adjusting to comply with the tax laws.
Malema said that the over one million people that voted for the Economic Freedom Fighters (EFF) party were aware of his tax issues.
Malema went on to say that if all the MP’s had to produce a tax clearance certificate from SARS many would fail.
Earlier in the month, Malema said that if a person had land they had everything. While attending a church meeting in Bloemfontein, Malema said the demand for land would start today. Land reform without compensation is a top priority for Malema and throughout the election campaign he told supporters of his intention to implement the return of land to blacks within South Africa.
Not long ago, while addressing a group of Zionist activists, Malema said, “We will take back our land as you did your Israel.” Many Jewish activists including Joe Slovo played a pivotal part during the apartheid struggle to democracy.
Malema remained adamant about the wealth of the country benefiting all the people and reiterated his stance on the nationalization of mines and banks.
Ed. Notes: Because politicians and bureaucrats may be no better than the private owners of banks and mine, consider alternative to nationalization — and to reclaiming land now owned by others.
Government can tax land or charge a user fee or a deed fee or institute land dues, not just for land where people live or work, but also fields and pastures, and mines. Negotiate a lease with the owner that sets terms high enough to recover all the rent, which is the annual value of the location itself, not of any work or building or improvement done to it. Anyone who owns more land than they can use won’t find it any longer worthwhile to hang on to it, just be be a middleman, and will let it go at a low price to previous tenants, as happened in California, Australia, Taiwan, and elsewhere.
As for banking, government can let savers open accounts in the public treasury and use those funds to lend to worthy borrowers. Yet people won’t need to borrow so much if government pays them a dividend from all those recovered rents. This way, money won’t be syphoned off by the privileged few, the economy will grow — as it did in the places noted above — Malema’s party truly will be Economic Freedom Fighters.
This 2014 excerpt of Clawback, Aug 21, by Quinntavious Williams.
The California legislature recently awarded special corporate tax breaks worth more than $420 million each to two of the country’s largest military contractors. The state also boosted the pot of money available for film tax credits from $100 million to $400 million. And it may put up a substantial amount to try to win the contest for the huge battery plant planned by Tesla.
The first of the weapons megadeals went to Lockheed Martin in connection with its role as a major subcontractor for Boeing on a $55 billion contract the Air Force will award for next-generation stealth bombers.
When the legislature approved the subsidy deal in July, Northrop Grumman, the only known competitor for the bomber contract, cried foul play because the tax break gave Lockheed an unfair advantage. To appease the company the legislature passed a similar subsidy bill for Northrop last week that was then signed by Gov. Jerry Brown.
Lockheed has received $134,349,564 in subsidies in 18 states. Northrop Grumman has received $499,567,863 in subsidies in 9 different states. Northrop’s most recent subsidy is a $471 million package from Florida.
With calls for cuts in the military budget coming from both the left and the right, the future of the new stealth bomber program is anything but certain. If the program goes on the chopping block, California will have nothing to show for its new embrace of megadeals.
Ed. Notes: This is how the real world works. People with so much money they don’t need anymore have so much power they can still take what’s not theirs and almost everyone treats it as normal. But the well-connected insiders feeding at the public trough is why either your taxes are too high, or do not return enough service, or both.
It’s also why people invest in weaponeers, since government shields them from market pressures, instead of into useful new ideas like solar power or rapid mass transit.
If you want to put a stop to such wasteful favoritism, you have to put a stop to government subsidies in general. Make government become a good steward and do hardly anything more than recover our common wealth and disburse the funds equitably to us all.
What’s our common wealth, the source of our dividend? It’s the value of land and resources. It’s all our spending for locations and natural goods like oil and timber. Those natural assets have a rental value (apart from their downstream value to consumers).
It’s that rental value we should be sharing — not taxed income or sales or buildings. Weaponeers, too, would get their share, but no more than anyone else.
The economy’s “infrastructure” consists of capital goods which are used for transportation, communications, and utilities. These capital goods are also called “public works,” because they have characteristics of public goods. An non-congested road or bus can accommodate extra users without reducing the services of the current users. The infrastructure of utilities includes the pipes, pumps, and wires that provide water, electricity, and natural gas. Some of the infrastructure is considered a natural monopoly, a product with a high fixed cost and a low marginal cost, the cost of providing more of the product.
Much of the infrastructure of the United States was built decades ago. These capital goods are mostly owned by governments which have failed to provide proper maintenance. The recent assessment of infrastructure by the American Society of Civil Engineers calculated an overall grade of D+.
Capital goods tend to depreciate, and require maintenance. Privately owned capital goods, such as houses and cars, are typically well maintained, since the owner wants to continue using these, and seeks a high resale value. But in the mass democracy we have today, the political incentive to build infrastructure but then to avoid spending to maintain it properly. A politician can take credit for promoting and voting for a project such as mass transit, but he will not boast about providing the on-going maintenance, as this does not provide a news opportunity.
Several major bridges have collapsed in recent years, and some have been shut down after being inspected. Bridges built decades ago now have many times the traffic they were initially built for, and the officials responsible for the bridges have failed to provide proper upgrades. Governments find the funds to repair broken bridges, but can’t provide the political will to maintain and upgrade them so that they don’t break. (A significant exception is the replacement for the San Francisco – Oakland Bay bridge.)
The federal government’s budget for highways comes from the Highway Trust Fund, financed by the federal gasoline tax. This is a unit tax, based on gallons rather than price, and the rate of 18.4 cents per gallon has been unchanged since 1993, while inflation has reduced the real amount. But the problem is not so much the rate, but the tax itself.
A gasoline tax seems like a user fee, since the use of roads is proportional to the use of gasoline. But the tax per gallon of gasoline has little relationship to the costs and benefits of the road. The benefit of a road can be measured by how much extra people are willing to pay to use locations served by the road, i.e. the additional land rent generated by the road. If the road generates less rent than it costs, it should not be built.
The best way to pay for a road and its bridge is from the land rent that gets generated by that infrastructure. There is then no need for a gasoline tax. However, the cost of a road or street is not just the cost of construction and maintenance. There are two other social costs. First is the cost of congestion. Streets and highways world wide are crowded, which wastes time. There should be tolls on all streets, highways, and bridges which vary by time and day, with tolls just high enough to prevent congestion. Another social cost is the pollution from vehicles. The efficient way to reduce pollution to an optimal amount is to measure the emissions with remote sensing, and then send pollution charges to the owners of vehicles which exceed the limits.
Many condominiums and residential associations have a reserve fund for periodic maintenance. The association’s budget includes an annual payment to the reserve fund as an actual expense that offsets depreciation. Government should do likewise. The government responsible for particular infrastructure should included in its budget an operational expense or reserve fund for the upkeep of the capital goods.
The political incentive, however, is the opposite. Politicians will not get publicity for maintenance and reserve funds. Therefore the upkeep funds should be a constitutional requirement. It should be in the constitutions of all governments that whenever public works are built, the budget will include payments for adequate maintenance.
The same economics applies to other infrastructure, such as water provision. The water provision of many American cities is over a hundred years old. Maintenance should be a constitutional requirement. In July 29, 2014, a water pipe burst in Los Angeles by the University of California. Millions of gallons of water were wasted in the midst of an extreme drought. The cost of not doing maintenance is much greater than that of proper periodic upkeep.
An alternative to government-provided infrastructure is provision by the private sector. Private communities such as homeowners’ associations would provide the local streets, and they would federate to provide the larger highways. Assessments, ideally on land value, would pay for the local public goods and also be passed on for the larger infrastructure. Property owners who balk at taxes willingly pay association assessments, so perhaps that is the most feasible path of reform.
This 2014 excerpt of Demos, Aug 20, is by Matt Bruenig.
One of the main reasons rich people buy up apartments in NYC (that they do not then live in) is for speculative investment reasons. They are hoping to increase their wealth by flipping the apartment in the future after the price of it has climbed up and up. If you can attack these speculative returns, you can blow up this entire game.
The easiest and most comprehensive way to attack these speculative returns is not a tax on unoccupied apartments. It is a complete tax on speculative housing returns, which is what taxing land rents would entail.
The price of an apartment roughly consists of two things: the value of the physical structure and the value of the location. Since the value of the physical structure does not generally increase over time (unless it is changed in some way), it is only an increase in the value of the location that causes apartment values in NYC to increase. Speculators are not banking on on the value of the aging physical structure of the apartment going up. They are banking on the value of the location going up.
You can tax the annual rental value of the land at very high rates (ideally 100%). This would operate just like a property tax, except it would be assessed only on the land value.
Under such a land value tax regime, any increase in the rental value of the land is entirely captured by an identical increase in the land tax assessed to the owner. This means that when owners go to sell their apartments to a new buyer, that buyer will not be willing to pay the owner more money for it.
Ed. Notes: The reason locations in NYC cost so much is because so many people live there and want to live there. It is the presence of community that creates the value of location. That is why — along with the fact nobody created land — it is fair for the community to recover this value that it creates.
And conversely, it is unfair to tax buildings, businesses, and earnings, things that individuals do create.
If you got rid of all the unfair and counterproductive taxes and replaced them with land dues and the like, plus if you got rid of spending programs which benefit insiders more than the public and replaced them with a Citizen’s Dividend, you’d have geonomics in practice and all the benefits that go with it.
This 2014 excerpt of Bloomberg Businessweek, Aug 14, is by John Tozzi.
In 2008 there were 1.7 million children born to unmarried women in the U.S. The rate of unwed births, at 52 newborns per 1,000 unmarried women, had been climbing steadily since 2002 and was the highest ever recorded.
After 2008, births to unmarried women declined each year. The steepest declines in childbearing have been recorded among unmarried black and Hispanic women, narrowing the gap with whites.
2009 is when MTV aired its reality show, 16 and Pregnant, followed by a slew of Teen Mom spinoffs. The narratives of hard lives of young mothers prompted Google searches and tweets about birth control or abortion. The show accounted for as much as one-third of the overall drop in teen births in the year and a half after its debut.
A hit TV show dwarfs the influence of pretty much all the public policy that could affect teen birth rates. Changes to welfare, Medicaid coverage for contraception, sex ed or abstinence curriculums, access to abortion -— none of it really moves the needle.
Teens, in particular, are staying childless by using contraception and having less sex, not by an increased reliance on abortion. Since the 1990s, women have been delaying childbirth. The pattern is evident in other developed nations as well.
There’s still plenty of room for unwed birth rates to decline, particularly among populations with the least economic opportunities. The proportion of births to low-educated women that are outside of marriage remains staggeringly high.
Ed. Notes: Our sex drive is pretty strong, as is our territorial imperative. Yet if a TV show can sway people to make rational choices about sex, perhaps another one can help people make rational choices about occupying land. Imagine: tune it, pay land dues, and share land rent!
This 2014 excerpt of the Los Angeles Times, Aug 11, is by Chris Kirkham.
Although the U.S. economy this year recovered all of the jobs lost during the recession, the new jobs are largely in lower-wage industries such as hospitality and healthcare that pay an average of 23% less than the ones lost in the higher-paying manufacturing and construction sectors.
From 2005 to 2012, the bottom 40% of earners saw only 6.6% of all income gains in the country. By contrast, the top 20% were received more than 60% of the increases. More than any other time in the last 60 years, those who receive income through market investments or other assets such as real estate have a much greater income advantage.
Overall, metro areas with the most people earning more than $75,000 were concentrated in coastal California and the Northeast. The largest concentrations of middle-income earners were in the Midwest and the Northwest. And the largest share of households making below $35,000 tended to be located in the South.
Ed. Notes: As jobs wither away and wages fall — thanks to automation and globalization, or progress, which is what we’re supposed to want — people will have to learn to feel the self-esteem that makes them feel entitled to a fair share of society’s surplus. The rich feel no qualms demanding greater than a fair share. Why is it so hard for everyone else to demand only a fair share of the common wealth, of all our spending for land and resources? For assets created by nobody, needed by everybody, and made valuable by the presence of society in general? That’s what’s ours to share — not peoples wages and investments. And once we share it, then the shoe will be on the other foot and workers can negotiate the heck out of wages.
This 2014 excerpt of the Washington Post, Aug 6, is by Robert J. Samuelson.
Like the population, the business sector of the U.S. economy is aging. The trend “has occurred in every state and metropolitan area, every firm size category, and in each broad industrial sector.”
From 1978 to 2011, startups fell from about 15 percent of all firms to 8 percent; the slide was gradual until the 2008-09 financial crisis, when it accelerated.
Since 2000, the decline in startups has spread to high-tech sectors.
Productivity is measured as output per hour worked. Competition among firms raises productivity. 35 percent of productivity gains result from “churning” of firms; the fall in startups dampens these gains.
One theory is that the cumulative effect of regulations discriminates against new businesses and favors established firms that have the experience and resources to deal with it.
Ed. Notes: Regulations deliver an excess burden but so do high costs for locations. Startups need a spot of land to stand on. Yet wherever entrepreneurs congregate, site values rise.
Another big problem is the stockpiling of patents and copyrights by older firms, preventing newbies from exploring those staked out fields of knowledge.
Furthermore, regulations mean jobs for the regulators and for the compliers who fill out the forms. Jobs are about the only way most people can get any income, so meaningless work proliferates. But such jobs are a waste of life.
We could lose regulations and those jobs if we could replace that income from labor (however useless) with an income from land. That is, all of society’s spending for sites (in mortgages and leases) and for natural resources could be redirected in the public treasury via taxes and fees then back out again as dividends, a la Alaska’s oil dividend and Singapore’s land dividend. And as the tax on land goes up, the price for land goes down.
Just as we would charge the full annual rental value for a deed to land, so would we charge the full market value for a patent on an invention or idea. To afford this fee, both inventors and businesses would quit sitting on their assets and rush good new products to market. Firms would relinquish the patents and copyrights that they’re not putting to good use.
Unbarred fields for exploration, coupled with affordable urban parcels, plus an extra income from recovered “rents”, all would liberate the basement inventor and the penny investor; startups would go through the roof!
Of course, to figure all this out, one’s brain could not be senile, either, but as agile as that of entrepreneur launching a startup.
This 2014 excerpt of Inequality, Aug 13, is by Robert Ross.
Each week, millions of dollars are stolen from American families. The perpetrators act with impunity. There are no arrests, few convictions, and largely meaningless fines.
Wage theft. Many working people are paid less than the legal minimum, not paid for overtime, and deprived of legal protections through false classification as independent contractors. If economic losses like these were visited upon big brand retail stores or well-healed neighborhoods, the cry for strict law enforcement would force police chiefs and mayors into rapid response.
In low wage industries – including apparel, restaurants, car washes, and construction – 26 percent of workers were paid less than minimum wage, 75 percent of those who worked overtime did not receive overtime pay, 25 percent were forced to work before or after their shifts had ended, and a vast majority of this work – 70 percent – was completely “off-the books.”
These workers lost an average of $2,634 annually out of total earnings of $17,616. That translates into wage theft of 15 percent of earnings.
Street crimes amounted to $139 million worth of stolen money in 2012. In the same year, the Department of Labor recovered more than twice that amount – $280 million – in stolen wages.
Ed. Notes: The Left hollers when bosses steal pay but one hears not a peep form them when government taxes wages. That’s a double standard and not good for justice. It erodes any moral foundation.
Of course bad bosses should be punished for theft. That goes without saying. But fines and inspectors do not get at the root of the problem.
Note the victimized workers are low-wage. So raise the minimum wage? Not exactly. Remember, that’s what’s getting violated. Instead, pay workers and everyone an extra income apart from our labor (or capital). That is, we would share society’s surplus.
What surplus is our common wealth? It’s the worth of Earth. It’s all our spending for land and resources. And it’s trillions of dollars each year. We could share it a la Alaska’s oil dividend or Singapore’s land dividend.
We could also let “land dues” stand in for most taxes, especially those on wages, and then government would break ranks from business and no longer take what does not belong to them.
This 2014 excerpt of Rebuilding the Fiscal Balance: Creating a greater and better downtown for all citizens, Part II, Aug 15, is by Robert Falcon Ouellette, candidate for Mayor of Winnipeg Canada.
I have a comprehensive financial strategy to ensure that the citizens of the City of Winnipeg are served by an effective and efficient public service [consisting mostly of] …
1. Land Value Tax
Downtown surface parking lots within the city are an eyesore and create a feeling of danger because they are dead-zones. They create a feeling of vulnerability for pedestrians and represent the greatest impediment to the long-term success of Winnipeg.
Owners of older buildings tear them down to reduce their property taxes and avoid the need to repair and replace older buildings.
Land Value Taxation has already been implemented in Denmark, Estonia, Russia, Hong Kong, Singapore, Taiwan, Australia, Mexico, and the United States.
Over time, as surface parking lot owners stopped the long-term speculation, delaying building on their lots, and instead felt an incentive to find development money, we would see a drastic change in the ambience of our city.
Ed. Notes: Some politicians have the courage to say what they know is right. And public recovery of the value of locations is right. Right morally because nobody made the land and the whole community makes its value. And it is right practically because, as noted, it drives efficient use of land. May Robert Falcon Ouellette become a model for others. And may he win!
California exempts solar energy equipment from its property tax. The exemption will last until 2025. The California Wind Energy Association has complained that this exemption puts solar energy at an artificial advantage relative to other renewables such as windmills. Biomass, the use of biological materials such as wood and leftover crops, is also at a relative disadvantage.
Rather than eliminate the solar tax exemption, the other energy industries should seek to eliminate the property tax on all energy capital goods. With this exemption, the government of California is recognizing that property taxes on capital goods – buildings, machines, equipment, inventory – impose costs that reduce production and innovation. Since this tax is toxic, the property tax should be removed from all improvements.
The best revenue neutral tax shift would be to increase the property-tax revenue from land value by the same amount as the reduction in the taxation of capital goods.
The other energy industry chiefs call the solar property-tax exemption a subsidy. We need to distinguish between absolute and relative subsidies. An absolute subsidy occurs when government provides grants to firms, or limits competition. A relative subsidy occurs when one firm or industry receives a greater subsidy than its competitors. All absolute subsidies are also relative subsidies, because they exist relative to the rest of the economy. But if the subsidy is not in funds or protection, but from lower rates on industry-destructive taxes, this is a relative but not an absolute subsidy.
Suppose that there are patients in a hospital suffering from continuous poisoning. The doctor stops poisoning one patient, and he recovers. But the other patients are still being poisoned. The other patients complain that it is not fair for one patient to be singled out for favored treatment. But the just remedy is not to resume poisoning the recovered patient, but to stop poisoning the others. The taxation of capital goods is economic poison, which the state recognizes would poison the solar energy industry they seek to promote. But why poison the other industries? The property tax should exempt all capital goods, all improvements.
A broader issue is the subsidies to energy. All forms of energy, except human muscles, are subsidized by the state and federal governments. Energy from oil and coal are implicitly subsidized by exempting them from the social costs of their environmental destruction. There is no economic need for any subsidies. But to obtain the true costs of energy, governments should also eliminate taxes not only on their capital goods but also on their incomes and sales. We cannot know whether renewable energy can stand on its own until we eliminate all the government interventions, including taxes, subsidies, and excessive regulations.
Since a radical restructuring of public finances is politically impossible today, a politically feasible reform would be to exempt all capital goods investments from the property tax. If this needs to be revenue-neutral, California could replace its cap-and-trade policy with levies on emissions. The relative subsidy to solar power is unfair to the other energy industries, but the real unfairness is the property tax on their investments.
This 2014 excerpt of Business Insider, Aug 12, is by Lucas Kawa.
Mayer Amschel Rothschild, original architect of that Jewish family fortune, was born in 1744. He lived above the family shop with up to 30 relatives in extremely cramped conditions.
Mayer’s father, Amschel Moses, worked as a money changer and silk cloth trader, and had Prince William of Hesse on his client list.
As with his father before him, Mayer was able to ingratiate himself with Prince William and make a decent living by collecting and selling rare coins. These “mail-order antique sales” served as the basis for the Rothschild fortune. In 1769, Mayer was granted the title of court agent, which would prove a boon to his money-making opportunities.
In 1770, Mayer married Gutle Schnapper and received a generous dowry from her father, who also worked as a court agent. The two would have five sons and five daughters.
In his will, Mayer outlined strict, controversial provisions regarding Rothschild marriages. Four of his granddaughters married grandsons (first cousins), while one married her uncle. The practice of inbreeding continued (still practiced by Arabs and others).
During the French Revolution, Mayer profited by providing supplies for the Austrian army with coin from the British.
The Rothschild coat-of-arms includes a fist clutching five arrows, a reference to Mayer’s five sons. At the turn of the 19th century, Mayer sent his sons to establish banks in Frankfurt, Naples, Vienna, France, and London.
Carl established a close (and profitable) relationship with the notorious ruling de’Medici family. His daughter Charlotte ended up marrying his nephew Lionel, the son of Nathan.
Salomon Rothschild founded S M von Rothschild in Vienna. He played a key role in the financing of the Nordbahn rail. His daughter Betty married his brother James, in accordance with family custom.
The Paris branch was among the most successful of the family’s banking branches, due in large part to James’ close relationship with King Louis Philippe. The house where his children grew up is now part of the American Embassy.
The former Prince William of Hesse, who did business with both Amschel Moses and Mayer, assumed his father’s title in 1785. After Napoleon invaded, he fled to Denmark after entrusting Mayer with a substantial portion of his wealth. Rothschild funneled the money to Nathan in England. Nathan’s shrewd investments grew the family fortune using the sovereign’s money. Eventually he returned the principal to William.
Nathan’s wife, Hannah Cohen, was the daughter of a prominent diamond dealer, one of Nathan’s business associates. The marriage increased his business connections and profits, and he opened N M Rothschild & Sons in 1811. He would lend to both sides during wartime and having the winner cover the loser’s debt.
Nathan was the first to hear the news of Wellington’s victory over Napoleon. He sold his stock to trick others into thinking that Britain had lost so they would sell their stock cheap. His agents bought it at discount in a huge profit-making day for the family.
During years of nearly chronic warfare, this strategy was implemented across the family branches. From 500,000 pounds in 1818, the Rothschilds’ wealth rose to 4,330,333 pounds in just a decade.
Ed. Notes: People may think that vast fortunes come from hard work or smart investment but neither is key (since many people do that). What is key is being a smooth talker, getting to be the one who is an insider, a “court agent”, handed lucrative contracts and bonds.
Being an insider also makes it possible to get profitable information before others. Called “insider trading”, it is now illegal but it still goes on.
The inbreeding probably would hinder families that are not minorities.
Another key is monopoly, not just getting to be an agent of the king but also holding a monopoly on a natural resource, like a diamond mine, or on a government-granted right-of-way, like a railroad.
What it all boils down to mainly is government spending, directed a little bit into infrastructure but a tremendous amount into humanity’s’ most vicious and irrational behavior — war. While others would probably have lent to belligerent governments if the Rothschild’s had not, that the money is tainted by blood does rile some people the wrong way. Yet many more wealthy people than the Rothschilds profit from today’s military/industrial complex and wars themselves, while war has not served non-rich Jews well.
Since some people have to die and others have to kill, it seems fair that war should not make anyone else rich. Let government raise taxes on everyone’s income and savings to pay for war in real time. And let the state draft the weaponeers, too, not just the grunts who march in the field.
Wars themselves could likely become a mania of the past if we all were to live in just and prosperous societies. And the way to do that is already known — geonomics. If only knowledge could get our juices flowing as does having enemies. Perhaps it’s a matter of feeling like we deserve justice.
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 way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old loggers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heritage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a dividend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jefferson suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.
a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?
about the money we spend on the nature we use. It flows torrentially yet invisibly, often submerged in the price of housing, food, fuel, and everything else. Flowing from the many to the few, natural rent distorts prices and rewards unjust and unsustainable choices. Redirected via dues and dividends to flow from each to all, “rent” payments would level the playing field and empower neighbors to shrink their workweek and expand their horizons. Modeled on nature’s feedback loops, earlier proposals to redirect rent found favor with Paine, Tolstoy, and Einstein. Wherever tried, to the degree tried, redirecting rent worked. One of today’s versions, the green tax shift, spreads out of Europe. Another, the Property Tax Shift, activists can win at the local level, building a world that works right for everyone.
a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old log-gers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
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 new field of study offered in place of economics, as astronomy replaced astrology and chemistry replaced alchemy. Conventional economics, in which GNP can do well while people suffer, is a bit too superstitious for my renaissance upbringing. If I’m to propitiate unseen forces, it won’t be inflation or “the market”; let it be theEgyptian cat goddess. At least then we’d have fewer rats. Meanwhile, believing in reason leads to a new policy, also christened geonomics. That’s the proposal to share (a kind of management, the “nomics” part) the worth of Mother Earth (the “geo” part). If our economies are to work right, people need to see prices that tell the truth. Now taxes and subsidies distort prices, tricking people into squandering the planet. Using land dues and rent dividends instead lets prices be precise, guiding people to get more from less and thereby shrink their workweek. More free time ought to make us happy enough to evolve beyond economics, except when nostalgic for superstition.
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.
what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, in-cluding the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.