People campaigning for a better world should also demand a social salary. A social salary is an extra income apart from one’s labor or capital, paid to everyone. It is not charity. It is your right. It’s similar to the European proposal for a Basic Income. It is different in that this Citizens Dividend is paid from rent.
A version of rent dividends already exist in some places. Some use oil revenue: Alaska pays its residents; their dividend was about $1800 in 2000. Alberta (Canada) pays the average family $C860 per year from oil revenue. Before the Gulf War, Kuwait paid a sizeable dividend from oil royalties.
While oil is the obvious candidate, simple land can fund a dividend, too. None of us created land. We all have an equal right to a fair share. None of us individually created the value of land. We do that collectively as society. If we are to reap as we sow, then we must collect and share rent, not our individual earnings.
Already Aspen Colorado pays working families a housing assistance made possible by a small levy on real estate sales, a tax that mainly falls on site value since locations are so spendy in that ritzy ski resort. Singapore also levies land while keeping other taxes low. Its economy does so well that the government runs a surplus and finds ways to disburse some to the citizenry every year, a “Growth Dividend” in 2011 and a GST rebate in 2012 and 2013.
There is much more “natural rent” to be recovered: the excess value of the airwaves, of ecosystem services, etc. It’s all the money we spend on the nature we use.
Government could also raise what it charges for its privileges. Presently, it grants things like corporate charters, banker’s sovereignty, patents and copyrights, utility franchises, for a mere filing fee – just a few bucks for little pieces of paper worth billions. How much would a business charge, say, to insure a home? Not a filing fee but a premium geared to the value of the home. How much would a bank charge for a loan? Not a filing fee but a principal and interest geared to the value of the home. That should be the rule for government, too: charge as much as the market will bear.
In the US that’d raise several trillion every year, probably about 40% of the GDP is “rent”, not wages or classical interest. Everyone would get the same size Citizens Dividend, which at first might be about $1000 per month, both rich and poor. No one would have to humiliate themselves by applying for public assistance. But the rich would not be grossly, unduly wealthy; every penny would be earned. Here’s why.
When government recovers these socially-generated values, then that’d leave no fat streams of spending available to the well-positioned to siphon into their own pockets via charges like bank mortgages and the price of gasoline, etc. If corporations were not absorbing so much of society’s common wealth, then they’d not have the wherewithal for dominating public policy. Candidates who’d repeal corporate welfare and taxes on wages and purchases, and who’d defend our right to a healthy environment, could get elected.
If people received a dividend yet did not have to pay taxes on their purchases or wages, they’d have more net wealth. Further, they’d have more opportunity to find good jobs. People who’d been speculating in land, keep lots vacant or buildings abandoned, would get busy and develop their land in order to afford their land dues (or land taxes). Their development would need to hire people as would the new businesses who’d occupy the new buildings. This intense use of prime land would also increase the demand for and wages paid to labor. The greater material security would empower workers to negotiate higher wages.
As people rise up out of poverty, they’d need less in the way of public welfare, so government could cut its costs and stay out of debt. No longer having to borrow, government would no longer swell the money supply and deflate currency. Inflation would halt then even reverse as technology and productivity advance, driving down the costs of living.
The combination of receiving a dividend while keeping one’s earning untaxed – the policy of geonomics – would remake our relations. Economically, sharing rent would lift people out of poverty. Politically, sharing rent would create a world of equals. Getting a dividend while not paying taxes, people would be as free as our ancestors were before the crush of civilization, yet we moderns would enjoy all the conveniences that make life comfortable.
It’s a win/win for nature, too. The dividend helps the economy self-regulate by creating a Share-Rent Cycle. Receiving rent, people work less, which lowers output, site value, and the rent dividend. Getting less rent, people work more, which raises output, site value, and the rent dividend. So people work less again, around and around forever. Hence work is put in balance with play automatically, and with ample leisure, life acquires new meaning. We could say “bye-bye” to economan.