Greens on George
|September 14, 2013||Posted by Jeffery J. Smith under Classic Articles|
133 Notable Environmentalists on Taxing Only Land
In Europe, Green Parties have led ten countries to shift taxes from income to byproducts that harm the environment. The growing list includes Finland, Sweden, Norway, Denmark, Germany, Belgium, France, Switzerland, and Italy. England, Holland, Spain, and Slovakia may lower other taxes to balance their green fees. Such a shift motivates both producers and consumers to choose processes and products that eschew pollution.
Making polluters pay is part of the Great Green Tax Shift. Others parts are to make depleters pay and make land speculators pay. Shifting taxes from goods to bads mirrors the green subsidy shift, from bads to goods, i.e., from corporate welfare to the general welfare.
A, Property of whom?
Subsidizing somebody raises the issue of whom government serves. Taxing something raises the issue of to whom the levied item belongs – if to anyone at all. Aldo Leopold wrote in A Sand County Almanac (1949) “when we see land as a community to which we belong, we may begin to use it with love and respect. There is no other way for land to survive the impact of mechanized man.”
How might we belong? We could own land in common. Writer Ivan Illich refers to the environment as “the commons”. Another way is to share land rent in common.
B, Recognition of the Man
If Rent is to be shared, it must first be collected. The champion of collecting Rent by taxing land is Henry George (1839-1897; see our “101 Famous Thinkers on Owning Earth”). Since taxing sites motivates owners to use them efficiently, his Property Tax Shift finds favor with greens.
1. Ebenezer Howard, known for his, “Nothing is gained by overcrowding,” “derived much inspiration from Progress and Poverty.” (Howard, Garden Cities of Tomorrow, 1945) But Ebenezer thought persuading the public to adopt George’s idea of replacing taxes with the collection of Rent would take eons. A faster way may be to entice private investors to buy up land and develop it efficiently. So Britain’s father of city planning founded the Garden Cities about a century ago. His followers went on to establish land-use planning as a movement (#43), discipline, and body of law.
The next generation of Georgists included some of the earliest greens who also blended land reform with money reform.
- Ralph Borsodi, grandfather of decentralism, founded the School of Living whose newsletter is GREEN REVOLUTION (begun in 1944). He developed George’s land tax into the ever more popular land trust (the legal structure of The School). Today’s members promote both forms – land tax and land trust.
- The Schumacher Society, which also exists on a land trust, promotes the minimalist philosophy of E. F. Schumacher (Small Is Beautiful). Their outreach literature: “In his book Progress and Poverty Henry George shows how the ability to monopolize land … can create prosperity … and lead to increased poverty.”
- Both the public land tax and private land trust have crossed oceans. Down Under, many cities tax land, not buildings (see our “Where a Tax Reform Has Worked: 27 Case Summaries”). In 1994, Urban Ecology Australia put a city block in Adelaide, South Australia’s capital, into trust in order to create an eco village. Plans include zero traffic, roof gardens, water recycling, and solar energy.
- Marion Clausen, a director of Resources for the Future (which employed Georgist Dr. Mason Gaffney who received some Ford Fdn grants, as did RFF), listed three remedies for slums: “lower (the real estate tax) generally, or make it a flat rate on the land only irrespective of how it is built up (the line advocated by Henry George and his followers), or, less radically, place a lower rate on improvements… A system of this kind is credited with part of the success in urban renewal (notably downtown Pittsburgh).” (The Land System of the United States; 1968; p 123)
- 6. Besides the land trust and dual-rate tax, another variant is the land gains tax. Peter Barnes, former West Coast Editor of THE NEW REPUBLIC and founder of Working Assets, advocates the land gains tax in The People’s Land (1975) which he edited, as does the next entry. Barnes also founded Common Assets (#125) to promote a “sky dividend”.
- 7. John McClaughry, former Vermont legislator and White House aide, director of the Institute for Liberty and Community, and co-convenor of the first US Green Assembly, in the above book (#5) said: “To finance land reform, tax the increase in land value. Since it is unearned by the land owner, society has a right to claim it. The classic argument for the site value tax, advocated by Henry George in his Progress and Poverty (1879), is equally applicable to the land increment value tax. The difference is that George’s argument applied to the total value of the land; the increment value tax applies only to the rise in value experienced during the time the land has been held by the current owner, and is imposed only at the time of transfer.” Perhaps the land gains tax would ease the transition to ongoing land dues.
Six green authors have endorsed George’s idea to recover Rent for Earth in lieu of taxes on effort.
- Kirkpatrick Sale, New York Greens founder and a NATION columnist, in his Human Scale (1980, p 385): “The Georgist principles provide a way for a community to secure its financial interest in a rational economy of usufruct.”
- Jonathan Porritt, cofounder of the British Green Party (#130), in his Seeing Green (1984, p 181): “the Liberals have given up trying to get across the ideas of Henry George. And that’s a pity … the only way to break the monopoly of landownership (is) some form of land tax.”
- Ernest Callenbach, author of Ecotopia, wrote us (1988): “if I’d heard of Georgism before publishing (his classic), I would have incorporated Georgist tax policies into its economic system.”
- Paul Ekins with Mayer Hillman and Robert Hutchinson in The Gaia Atlas of Green Economics (1992) (foreword by Manfred Max-Neef of Chile who also proposes the term, geonomics) on page 151 says, “taxes need to be shifted away from labor and on to the use of resources and the environment. One such tax, first proposed by the American reformer Henry George more than a hundred years ago, is land value taxation.”
- Mike Nickerson, author and operator of Canada’s Sustainability Project which with members of parliament promoted the “Well-Being Measurement Act”, wrote us (2000 Jan 10): “Writing another book will have to wait. The Georgian perspective will be included without doubt.”
- 13. Brian Czech in Shoveling Fuel (2000) cited both the tax shift (p 100) and the social salary (p 102). Later he added, “If I had read Dr. Mason Gaffney’s Corruption of Economics prior to writing Shoveling Fuel, I also would have had a lot more to say about Henry George. After reading Corruption and a paper by Bill Batt from New York, I can see the connection of Georgist to ecological economics.” (2000 July 15 e-mail to fellow geoist Adam Monroe)
Three green religious researchers have warmed to Georgism.
- Matthew Fox, founder of creation spirituality, in A Spirituality Named Compassion (1979) said, “Henry George sees his movement as an alternative… By taxing land more than we do and in a special way, we will be able to tax work and income derived from it considerably less…”
- 15. Doctor of theology John Hart, in The Spirit of the Earth (1984; p. 144), wrote “Another possibility for a land tax … might be some development and application of the single tax idea of Henry George… Were such a tax developed, it should … tax at a lower rate agricultural, scenic land, or home-occupied land.” Actually, such preferential treatment, opening up a host of bureaucratic nightmares, might not be necessary. Once taxed, urban areas should draw almost all development. Plus, a rural jurisdiction could require ecology security deposits and restoration insurance.
- 16. Theologian John B. Cobb, Jr. with Herman Daly (#s43, 115, 116, & 121) in their For The Common Good (1989), wrote (p 256, 259; 328): “(George’s) specific proposal about taxation can be supported on the basis of a shared rejection of the idea of land as only a commodity… Since this tax would rise as the value of the land rose, or would fall as it fell, there would be no basis for speculation in land… farmers would have no reason to oppose zoning that kept taxes on agricultural lands appropriate to the profits that can be realized from farming… Whereas a higher tax on buildings encourages holding land unused or allowing buildings to deteriorate, a higher tax on land encourages efficient use of the property.” Two years later, Cobb underscored these points, citing George, in an interview on Canadian TV with David Pollock of the Anglican Church.
In the mainstream press, five environment-friendly columnists have cited George favorably.
- David Hapgood in THE NEW REPUBLIC (1979): “The land tax would encourage the more intensive use of less land, reduce suburban sprawl, revive our ailing cities, lower the cost of shelter and, if uniformly applied, end the senseless wars among communities caused by the property tax. (Here again many traditional economists agree with George.)”
- San Francisco CHRONICLE environmental columnist, Harold Gilliam (1989 Aug 20): “Another way out of the (land) cost dilemma might be to look for some variation on the proposals of that 19th century San Francisco economist and prophet-ahead-of-his-time, Henry George, author of the classic Progress and Poverty… Why not a land tax–paid when the land changes hands–to capture some portion of the increase in value resulting from population growth? And why not channel that revenue into incentives for affordable housing?” (¿Such as de-taxing homes?)
Molly Ivins wrote (1995 March) “Henry George must be in his grave spinnin’ like a cyclotron. We, the people at large, make the land more desirable; and then the landowners want us to pay them because we won’t allow them to poison the air or to pollute the rivers.”
- James Howard Kunstler, former Rolling Stone editor and contributor to New York Times Magazine, in his Home From Nowhere (1996; p 206): “Reform of our property tax system along the lines advocated by Henry George is a straightforward means for restoring the economic health of our ailing towns and cities – no smoke, no mirrors, no voodoo.”
- 20. The Utne Reader, in listing Pittsburgh among its “Ten Most Underrated Towns in America”, noted that the city’s “unique tax system, inspired by 19th-century economic theorist Henry George, assesses land at a higher rate than buildings, thus encouraging historic preservation, discouraging downtown parking lots, and reducing sprawl.” So that’s why geonomists rave about it! (The Georgist News <firstname.lastname@example.org> Jan 15, via Alanna Hartzok)
- The Institute for Local Self-Reliance (#69 and #99): “Can a land tax reduce sprawl and strengthen urban economies? The evidence is persuasive though not conclusive. Political economist Henry George first proposed a land value tax over 100 years ago, as a way to eliminate land speculation and make more land available for production.” www.newrules.org/environment/landtax.html> 1313 Fifth St SE Minneapolis, MN 55414; tel: 612-379-3815; fax: 612-379-3920 http://www.ilsr.org
- The Tellus Institute (with #75), which once corresponded with us, and
- the Environmental League of Massachusetts (with #99) put out their joint table-top lit, “Taxes that Work for Our Environment and the Economy”. They acknowledge help from Redefining Progress, which once contracted with us. They endorse Land Value Taxation, relying heavily on Henry George. They warn against using LVT in the countryside, worried that it’d spur new construction on pristine sites. Yet LVT does not increase development beyond demand; it relocates development to the most appropriate sites and makes it more compact, less auto-dependent.
C, Collect Site Rent: Tax on Land Value, not on Built Value
The first green party, actually older than Germany’s, the Values Party of New Zealand, got it half right. Their Manifesto 1975 recommended both taxing farmland and de-taxing farm income, yet taxing urban income and de-taxing urban land. Yet both incomes – earned by farmers and city dwellers – are earned; society has no right to tax them. While rent – for farmland and for urban land – belongs to society and, when recovered, spur owners to use land efficiently. At least in the early 90s, one of their candidates, Dr. Peter Whitmore (publisher, engineer, and economist) campaigned on “resource rentals” (see Section D) and a “resource dividend” (see Section I).
24. Q 2000 Youth Campaign for Sustainable Sweden spotted the problem with half the property tax in a 1997 UN document: “If you improve your house for environmental reasons, e.g. install a heat pump, you have to pay more taxes. That gives house owners the wrong signals and prevents adjustment to a sustainable society.”
Several Green Parties have endorsed site-value taxation (SVT):
25. The Green Party of Finland,
- the Green Party of Scotland,
- and the Green Party of Marin County, California (1992 Green Voter Guide; p 10) advocate SVT. So did the GP of the whole state, too, until it grew leftward. The Green Party of Britain (#8 & #130) in their Manifest for a Sustainable Society (1988): “Without this (tax), the economic pressures of the present land system (including land speculation) will defeat all attempts to remedy ecological and allied problems.”
- The Green Party of British Columbia leader, Tom Hetherington, in spring 2000 said, “Our tax shift program is built on five points: by taxing pollution we would scrap small business taxes; by taxing resource consumption we would slash income tax; by taxing land values we would control urban sprawl; by taxing high energy draw development projects we would encourage sustainable town centers; by taxing automobile use we would ease grid lock and encourage public transit.” ww.greenparty.bc.ca/ email@example.com
- The Green Party of Ontario Canada also endorses the geonomic platform.
Older “green” groups also endorsed taxing the value of land, not buildings:
- America’s New World Alliance (1981),
- Friends Of the Earth-Scotland (1982),
- the 1984 North American Bioregional Conference,
- the Planetary Initiative For the World We Choose,
- The Other Economic Summit (1985), and
- the Youth Section of the Brundtland Commission‘s second annual (1990) meeting in Bergen, Norway.
- “The Sierra Club supports the split-rate tax (also known as the land value tax) as a measure to promote urban redevelopment and discourage sprawl development at the municipal level.” (adopted 1996 June). Such was their spokesperson’s testimony at a public hearing. At the national club’s website is a milder endorsement <sierraclub.org/sprawl/report00/solutions.asp>. Club Director Carl Pope wrote “Reclaiming the Commons” (SIERRA magazine, 2002 September/October) on the moral basis for sparing Earth which also applies to sharing Earth.
- Friends of the Earth US (between #69 and #70), with the rest of
- 38. the Vermont Fair Tax Coalition, suggests passing “legislation that would enable cities and towns in Vermont to use land value taxation.” (“Tax Reform that Agrees with Vermont”, 1999 March)
- 1000 Friends of Maryland, which includes the Chesapeake Bay Foundation (1996, modeled after the original 1000 Friends of Oregon), seeks legislation that would also “enable counties to adopt the (land) tax system.”
- 1000 Friends of Pennsylvania supports Philadelphia’s effort to shift its property tax from buildings to locations.
- The Washington, DC-based Regional Network for Livable Communities campaigns on this issue, preparing excellent literature for handing out to the pubic.
- GEO (Grassroots Economic Organizing) Newsletter, a left green bimonthly from Pennsylvania (1999 Jan-Feb): “Replace ineffective property taxes … tax land but not improvements and thereby penalize speculative land holdings …”
- The National Neighborhood Coalition (NNC), based in Washington, DC, whose members include not just environmentalists but also advocates for housing, development, labor, civil rights, and faith-based groups, in their Smart Growth Tool Kit (2002) recommend splitting the property tax into two rates, taxing “land more heavily than what is built on it. (this) encourages landowners to develop their property more intensively than traditional property tax systems, which can promote land speculation or abandonment. Although local economic development has been the primary rationale for the tax – most notably in several Pennsylvania cities, including Pittsburgh – the split-rate tax also shows promise as a component of a broader anti-sprawl program.” (Thanks to Walt Rybeck)
Three big educational outfits worried about Earth publicized the Property Tax Shift in their publications.
- The UK’s Town and Country Planning Association, a legacy of Ebenezer Howard (#1) proposes the Property Tax Shift and their journal published research on the potential of land value taxation by Tony Vickers (Vol. 69, Part 5, 2000).
- The American Planners Assoc. showed how LVT reduces land consumption in their Journal (1999 Winter) and in their Public Investment (June), a special edition of their Planning Advisory Service Memos, reprinting “Financing Community Redevlopment Through Value Capture”, both by our friend Tom Gihring, Ph.D., consultant on a project that won a 1999 Nat. Award for Planning, and a worker in war-torn Bosnia.
- The International Society for Ecological Economics, another Daly (#s 15, 43, 115, 116, & 121) product, in their newsletter (1995, April) ran a cover story by Josh Vincent of the Henry George Foundation titled, “No Left, No Right, Only Green and George”. It said in part, “Study after study in this country has shown that land use efficiency and ‘recycling’ of urban properties is a result of the Land Value Tax. Why not give it a whirl on a larger scale?”
Four governmental commissions recommended the Property Tax Shift.
- The Oregon 2000 Commission, appointed by then Governor Vic Atiyeh, listed Site Value Taxation (SVT) as a growth and cost control measure in their Preliminary Report (1979).
- The US Department of Transportation issued a report by Erskine Walther at the Transportation Institute at North Carolina A&T State University in Greensboro and Lester A. Hoel of the University of Virginia et al (1990) who pointed out mass transit could be funded in part from the increase in site value around transit stops. Enticing people to ride rather than drive helps clean the air and makes in-fill, rather than sprawl, feasible.
- British Columbia’s Victorian Transportation Policy Institute, run by Todd Litman (who manages to win government contracts), includes in his Online TDM Encyclopedia (www.vtpi.org) “Smart Growth Policy Reforms”, which has a long section on shifting the property tax, and our bibliography of over 70 entries on funding transit from rent arising around their transit stops.
- The Oregon Governor’s Growth Commission recommended using the rise in site value after expanding the Urban Growth Boundary to fund new infrastructure (1999 Jan).
- Minnesota’s Environmental Quality Board in its “Smart Signals: Economics for Lasting Progress” said the current property tax discourages urban redevelopment. The agency recommended increasing taxes on land values and decreasing taxes on buildings, thus lessening the penalties for structural improvements (Tax News Update, Vol 12, No 12, Dec 21, www.sustainableeconomy.org)
Four bodies of elected official recommended the Property Tax Shift or tried a variant.
- The Assoc. of Washington Cities, citing its eco-benefits, called upon their state legislature to study the property tax shift (1993).
- The Maryland Municipal League endorsed the system as a way to promote revitalization.
- The Green Mountain state, Vermont, in 1973 passed a tax on speculative gain from dealing land.
- Natural Resources Council of Maine introduced a similar bill in 1988.
Lately, green writers have coupled the property tax shift with ending subsidies to growth.
- Green Party presidential candidate in 1996 and 2000, Ralph Nader (#59): “We subsidize the use of automobiles with highway budgets and tax subsidies for parking facilities. We also pay for automobiles with military expenditures that ensure the flow of oil from foreign lands and underwrite the cleanup costs of gasoline and oil spills that harm the ecosystem… Unlike traditional taxation – which rewards developers who put up cheap, tacky housing and strip malls – site-value taxation gives developers the incentive to build gracious, durable buildings. Allowances for affordable housing, however, need to be part of site-value schemes.” (San Francisco Bay Guardian, 1998 May 12, thanks to Adam Monroe) So how about a Housing Voucher funded from site value paid to all residents? After Ralph broke bread with geonomists in Philly, in his subsequent speech at U of Penn, he stressed the property tax shift. (GroundSwell, Mar-Apr)
- The magazine, The New Colonist, ran an article, “Affordable Housing and the Land Value Tax Perspective: a letter to Asheville, North Carolina” by architect and Geonomy Society member Albert S. Hartheimer which extols the Property Tax Shift. The magazine keeps the article archived in their website under tools for fixing cities.
- Eben Fodor (next) in his Better Not Bigger (1999), while focusing on how subsidies pave the way for sprawl, among his remedies lists several taxes including (p. 130): “a land tax can be used in urban areas to encourage density and discourage sprawl. By taxing land rather than buildings, there is an incentive to develop each parcel of urban land to its fullest potential.” If a jurisdiction does that, there is little development left to spill over onto suburban land, hence society need not restrict the land tax to urban areas. Many other measures may not be needed either, since collecting land Rent de-motivates growth. As Fodor noted earlier (p. 30): “The engine of the growth machine is powered by the fortunes resulting from land speculation and real estate development.”
- In Taking Its Toll: The Hidden Costs of Sprawl in Washington State, published by Climate Solutions and Sierra Club Cascade Chapter in Olympia (WA), Patrick Mazza (former Portlander) and Eben Fodor (current Oregonian, previous) write, “eliminate property taxes on buildings altogether and tax land exclusively. This would encourage property owners to make improvement, while discouraging speculative holding of land …”
- Alternatives to Growth Oregon’s President Andy Kerr writes in their “25 Actions to End Growth in Oregon” (2000 Aug) among other excellent ideas: “6. Shift the property tax on land and improvements to a tax only on land.” AGO, 520 SW 6th Av, Ste 930, Portland OR 97204-1513.
- Rachel’s Environment & Health Weekly (#572, 1999 Oct 14, Editor Peter Montague, www.rachel.org) praised a booklet by Sustainable America (#103), the organizer’s tax kit. One chapter (which we edited) urges both the end of subsidies to sprawl (funds for new infrastructure from taxes on everyone rather than from fees paid by users) and the shift of the property tax from buildings to locations. Penalize land speculation and make buildings less costly to build, operate, buy, or rent, encouraging urban development.
D, Collect Resource Rent: Fees for Depletion, not Taxes on Production
As taxing sites halts sprawl, taxing resources delays depletion.
NEW YORK TIMES columnist James Reston (1970 August 9): “the economic approach to conservation is important: don’t reward but punish the destroyers. But this requires a much larger proportion of the American people to get a new philosophy of values about the land, property rights, and man as only one part of the living community.”
- 62. Public Citizen (founded by Ralph Nader, #53) in their booklet, The Road to Trillion Dollar Energy Savings: A Safe Energy Platform (1984; p 22) added the untaxing half of Henry George’s remedy: “Reduce taxes on people and increase taxes on nonrenewables”.
- Get America Working, founded by an ex-Carter Administration EPA official, Bill Drayton, at their website say, “By eliminating the payroll tax entirely, and replacing it with a tax on our natural resource wealth, the economy will grow by leaps and bounds.”
Several Washington, DC-based groups, while not mentioning the de-taxing of useful production, do call for reversing from loopholes to fair fees for extraction. Together and with a few others,
- Defenders of Wildlife,
- Environmental Safety,
- National Parks & Conservation Assoc., and
- the Wilderness Society authored The Environmental Solution to the Deficit Dilemma (1986).
- Michael Jacobs in his The Green Economy (1991) suggests that to control air pollution, do not wait and tax carbon emission but begin by taxing oil extraction. Jacobs reminds other green taxists that an ounce of prevention is worth a pound of cure. However, there may be no overlap of the jurisdictions willing to tax upstream on resources and the locations of said resources. Then downstream taxes on transactions and emissions, coupled with rebates, may be necessary.
Many major DC-based groups meet regularly to discuss not so much adding new taxes as fixing old ones. In the summer of 1995,
- 69. Essential Information and
- the Community Nutrition Institute called a meeting to address “unfair tax breaks and loopholes.”
- USA TODAY urged Congress to not just go get the over $2 billion in back royalties owed by oil companies who pumped public land but also close existing loopholes (1998 Aug 27).
- 72. Besides nature’s surface and subsurface, society can also tap the supra-surface. The airwaves offer Rent, noted David Morris, founder of the Institute for Local Self-Reliance (#20 and #98) and a writer for the St. Paul PIONEER PRESS DISPATCH, in his The New City-States (1982; p 68). “Governments could license the broadcast spectrum at full market value.”
Besides collecting the various Rents, society could staunch the hemorrhaging of public funds. With tax loopholes, subsidy abuse also favors eco-ploitation. Friends Of the Earth (#36) wields their “Green Scissors to cut anti-environmental spending and … to close 15 tax loopholes given to polluting industries.” Coverage of their annual reports began with the likes of the Northwest’s Seattle Weekly and Willamette Week.
- Zero Population Growth in their brochures call for “an end to government subsidies that promote wasteful consumption.”
- The Environmental Working Group of Washington, DC reported (1995 Mar) how agricultural payments do little for poor farmers yet much for rich investors living in Beverly Hills.
- Island Press published Perverse Subsidies: How Misused Tax Dollars Harm the Environment and the Economy by Norman Myers and Jennifer Kent (2001).
Before the UN Conference on Sustainable Development held in South Africa, Worldwatch (#104) issued “From Rio to Johannesburg: Mining Less in a Sustainable World”, by Payal Sampat, which called for an end to subsidies to extractors. (WW Policy Brief #9)
E, Collect Lost Rent: Tax on Pollution, not on Production
Besides delaying depletion, taxes may also prevent pollution. The collection could be a tax or auction; government could require emitters to bid for permits. To this pollution solution of some kind of a new levy, many add the removal of an existing tax. De-taxing is the other half of Henry George’s remedy.
- The Alliance to Save Energy,
- the American Council For an Energy-Efficient Economy,
- the Natural Resources Defense Council, the Tellus Institute (#21), and
- the Union of Concerned Scientists in “America’s Energy Choices” (1991), page 21, wrote “Shift some of the tax burden from income to pollution.”
- 80. Francis Cairncross, Environment Editor for Great Britain’s THE ECONOMIST, in her Costing The Earth (1991): “to raise more revenue from (pollution) taxes, and less from taxing income and capital, would be a farsighted thing for a government to do.”
79 to 88, the ten Euro Green Parties who actually did win this shift in their home countries (above).
89. The Energy Foundation, a fund of the U.S. oiligarchy (the oil-owning families), while silent about sharing natural Rent, suggested (1993 REPORT) a partial form of the green tax shift: “tax reform could build environmental damages into the price of fuels” (p 9) and lift the property tax burden off alternative energy improvements (p 13).
- The Atmosphere Alliance, a project of Earth Island Institute (founded by FOE founder Dave Brower), in its Life Support! (undated) addressed both taxes and subsidies (p 24): “(1) End welfare for polluters, (2) Tax pollution, not people.”
- Future Harvest, instead of the usual tax-it reaction, issued a report, “Carbon Emission Trading Can Bring Worldwide Benefits” (2002 October 18), which showed creating a market in permits can be a win/win for poor villagers and big business, besides slowing climate change. (The Progress Report)
F, Twinned Tax Shift
More people are realizing that George’s tax on natural values can discourage both depletion (the wasting of resources) and pollution (the leaving behind of waste), plus make possible a reduction of other taxes. They urge a more complete tax shift.
- The Global Tomorrow Coalition (1990) said: “ECE governments (Europe) should begin to shift the burden of taxation onto activities that deplete natural resources or result in environmental damages. This implies restructuring tax systems by reducing taxes on labor and capital.”
- The World Resources Institute (1992) wrote, “taxes fall mostly on just those activities that make the economy productive: work, savings, investment and risk taking. A better system would place more of the tax burden on activities that make the economy unproductive: resource waste, pollution, and congestion.”
- Paul Hawken (next), winner of a socially responsible businessman award, in his Ecology of Commerce (1993) wrote, “The whole key is to shift from income and payroll taxes to taxes on pollution, environmental degradation, and nonrenewable energy consumption.”
- The team of Amory and Hunter Lovins of the Rocky Mountain Institute with Paul Hawken (previous) in the Harvard Buisness Review (1999 May-June) penned “A Road Map for Natural Capitalism”, saying: “In nearly every country on the planet, tax laws penalize jobs and income while subsidizing resource depletion and pollution.”
- Joe Kresse, former trustee of the Foundation for Global Community, head of its Economics Team set up to judge business by impacts on people and planet beside profit, in an address he gives around the country, “Business as if the Earth Matters”: “We ought to shift from taxes on income to taxes on carbon, the use of virgin materials, and the production of waste and pollution. It ’s a no-brainer. Why would you tax people for working? You want people to work. If you got rid of income and payroll taxes, you could employ more people because the cost per employee would be lower for every dollar of take-home pay.” (Timeline, No.55 2001 January/February) Before wishing that sort of work on the masses, he should try it first.
- Willis Harman, visionary author of popular titles such as Global Mind Change (1988), wrote us (1996/2/28): “There is no doubt you’re correct about our presently taxing the ‘goods’ and subsidizing the ‘bads.’ Changing that is one of an entire pattern of interventions that will be necessary if we are to make the transition to sustainable society with any degree of smoothness.”
- While Under Secretary of State, Timothy Wirth critiqued taxes and spending at the Audubon Society’s Road From Cairo Conference on Population in Miami (1994 Oct). He said: “Instead of taxing the things we do want, such as goods and services, levy a tax on things we don’t want, such as pollution and depletion. The new majority in Congress wants to cut spending. Let’s put their sacred cows, too, on the chopping block: subsidies for sugar, tobacco, western water, the whole lot.”
99. Minnesotans for an Energy-Efficient Economy, a coalition that includes ISLR (#20) promotes the green tax shift in general, notes its power to curb sprawl, but des not specifically support the green Property Tax Shift. me3.org/projects/greentax/. The Environmental League of Massachusetts (#22) offers lots of useful info on the green tax shift in general and the property tax shift in particular. James R. Gomes, President; 14 Beacon St, Ste 714, Boston, MA 02108; (617) 742-2553; fax: (617) 742-9656; firstname.lastname@example.org
G, Total Tax Shift
More people are realizing that George’s tax on natural values can discourage not only depletion and pollution but also speculative withholding of good land. Plus, his shift makes possible a reduction of even more harmful taxes. The heads-up groups are:
100. The Center for Global Change at the University of Maryland was drafting a detailed position on shifting taxes from goods to bads and subsidies from bads to goods (1997).
- Alan Durning and Yoram Bauman of Northwest Environment Watch, a spin-off of WorldWatch (#105), wrote Tax Shift (1998), the best treatment to date of the tax shift.
- The Center for a Sustainable Economy of DC co-organized the first US conference focusing exclusively on the green tax shift in Seattle (1998 Dec).
- Their cohorts, Sustainable America of New York (in #58), offer a tax kit explaining the various shifts, including the property tax one.
- The Oregon Environmental Council introduced into the 1999 session of the state legislature a bill to study the complete tax shift, including the property tax shift. Their op-eds, and those of their co-author, Alan Durning (#101), appear often in the Northwest press: The OregoniaN, The Daily Journal of Commerce of both Portland and Seattle, The Olympian, and Vancouver, BC’s The Georgia Straight.
- The WorldWatch Institute publishes several articles, booklets, and books on shifting taxes and subsidies. Their best exposition to date, which also includes the Property Tax Shift is The Natural Wealth of Nations (1998) by David Roodman. Publication #156, City Limits: Putting the Brakes on Sprawl by Molly O’Meara Sheehan in the chapter “Erasing the Incentives to Sprawl” also has the property tax shift.
- Lester Brown, who founded Worldwatch (#105 above), in his latest book, Eco-Economy, argued for shifting taxes and subsidies. He agreed with the need for the PTS after his talk to the Canadian Society of Ecological Economists in Montreal, 2001 August.
- National Wildlife Federation, at its Annual Meeting assembled March 16-18, 2000, in Seattle: “support the concept of Environmental Tax Shifting as a potentially useful tool to discourage activities that contribute to climate change, degradation of wildlife habitat, and pollution of the land, water, and air” and to urge federal and state governments to adopt it. Over a decade ago, they had also lined up against harmful subsidies. (800) 822-9919. Caron Whitaker, Coordinator, Smart Growth and Wildlife Campaign, advocates “a split taxation system (also known as Georgist taxation) whereby the land (not buildings) is taxed in cities and urban areas, where growth is desired, and buildings (not land) are taxed and/or conservation tax incentives are implemented in rural and outlying areas where development is not desired. Taxing land instead of buildings in cities spurs more efficient use of land. In rural and undeveloped areas, it is better to tax the buildings instead of the land, giving land owners an incentive to not develop their land, or have to pay increased taxes. (http://www.nwf.org/smartgrowth/join.html) While true, not taxing country land rewards speculation and inefficient use there, too, just as in the city. Plus, if cities are made to absorb development, pressure on the country is eased.
- Friends Of the Earth – England, Wales, & Northern Ireland, “to modernize the economy and industrial activity, and improve living conditions for poor people, thru environmental improvements, four central planks should underpin the taxation (and revenue) side of that strategy and its sustainability objectives: (a) carbon/nuclear based taxes (energy), (b) virgin minerals/raw materials (resources), (c) toxic chemicals (environmental quality), and (d) land-value taxation (land). LVT would be a powerful incentive to reuse, redevelop, and refurbish land and buildings on a sustainable basis. It would remove the tax exemption from landowners who left land derelict and provide an incentive for clearing and decontaminating land.” (2001 Spring, Land & Liberty, London, UK)
- The Environmental Taxation Worldwide Website, www.greentaxes.org/, keeps track of progress on the total green tax shift front. Got any information on pending legislation? Please submit it at the state level to Prof. Julie A. Lockhart, Department of Accounting, Western Washington University, Bellingham, WA 98225; email@example.com.
- The Austrian Green Party (below in “From Taking to Sharing”) advocates the Environmental Tax Shift and a social salary.
H, From Taking to Sharing: the Dole
- Decades back, Buckminster Fuller noted that taxation in general becomes unnecessary and impossible once society shares natural abundance: “Big government can see no way to collect taxes to run its bureaucracy if people are served directly and individually by daily cosmic-energy wealth income.” (Critical Path, p 219, 1981). While not explicitly a Citizens Dividend from recovered rents, at least Bucky was headed in the right direction.
- Some who advocate green revenue reform worry that green taxes may be regressive and another subsidy for the poor would be needed. The Austrian Green Party (#110) joins the English and Irish GPs (#s 130 & #131) in pushing for a social salary, tho’ not necessarily from rent. In the Austrian debate on income security, the Greens are joined by the Left-Liberal Party. (US Basic Income Group Newsletter No. 10, Jun/Jly).
- Europe’s Business Council for Sustainable Development in their Changing Course (MIT Press, 1992) critiqued spending and added, “Revenue raised (by charging users and abusers) above and beyond funds needed to finance a given (restoration) program can be recycled for other purposes, such as reducing taxes on such things as employment, investment, income, and savings. Where instruments prove regressive, affecting the poor disproportionately, then part of the revenues can be used to correct this effect.”
- Philip Shabecoff, founder of Greenwire, the environmental news service, in A Fierce Green Fire (1993; pp 63, 290): “A challenge to giving away publicly owned natural resources to individuals or corporations seeking to enrich themselves was made by the journalist Henry George… In recent years there have been an increasing number of proposals to restructure our tax system by partially replacing taxes on wages and profits … with taxes on pollution and resource depletion. Such a policy would have some problems – a pollution tax would be regressive and require rebates to lower-income families. But it would also raise revenues by taxing harmful things …”
- David Suzuki, the British Columbia geneticist and TV show host, authored an article distributed thru-out Canada (1995 Feb 11) that seconded Herman Daly (#s 15, 43, 116, & 121): “Raise the bulk of public revenue from taxes on thru-put either at the depletion or pollution end. Keep progressivity by taxing very high incomes and subsidizing very low incomes.”
Yet taxes on depletion and pollution may not necessarily raise prices. A tax on taking resources does not add to the price but subtracts from the profit. For example, while Alaska charges extractors 12.5% of the world price for its oil, Malaysia charges 90%, yet the world price is set by neither seller but by demand. (Greater competition among extractors would drop the price even lower.) Thus taxing extraction changes not how much one pays but to whom. Taxing contamination, on the other hand, does impose the cost of acquiring and operating control equipment. Yet passing on these costs makes the non-polluting processes and products cheaper in comparison. To save money, producers and consumers would switch to the soft path. As the volume of green trade grows, green prices fall.
Not only is the collection of Rent not regressive, but the disbursal of Rent is inherently progressive. How much residents pay in would differ according to the value of the nature they claim, yet how much each gets back would be the same.
Rather than rely on a market that self-regulates organically, Michael Jacobs (#65) urged some controls to go with taxes. Social ecology founder Murray Bookchin in Remaking Society advocated localized communism (municipalism) and paraphrased Karl Marx (p. 172; 1989): “The earth can no longer be owned; it must be shared. Its fruits, including those produced by technology and labor, can no longer be expropriated by the few; they must be rendered available to all on the basis of need.”
Yet is free exchange the problem or is biased policy? The Business Council for Sustainable Development (#113) noted the market “has never been given a real chance to work for the environment. The use, exploitation, and degradation of nature has not created signals of scarcity because those who ‘own’ nature and its services – society, expressing its wishes and intentions thru government – have tended to give away environmental resources and services for free.”
Echoing Henry George, Paul Hawken (#94) noted tax reform “does not depend upon a transformed human nature but extends to commerce the interwoven, complex, and efficient models of natural systems … so everyday acts of work and life accumulate into a better world as a matter of course, not conscious altruism.”
I, From Taking to Sharing: the Universal Dividend
- Not only production, but consumption too, could select for efficiency, were income secure. Warren A. Johnson contributed “The guaranteed income as an environmental measure” to the 1973 anthology, Toward a Steady-state Economy (p 175-189), edited by Herman Daly (#s 15, 43, 115, & 121).
Some assume common ownership is a prerequisite to public sharing. German Green Margrit Kennedy (#128) in Interest And Inflation Free Money (1988, p 32) elaborates: “a combination of private use and communal ownership would be the most advantageous solution for achieving social justice and allowing individual growth… (society) would buy up all its land and lease it out to its inhabitants… The constitution of … Germany describes land as an asset which carries a ‘social’ responsibility.” But why buy the land? If society is to compensate landholders, why not the landless?
- The Australian aborigines, many of whom lived in harmony with nature, testified at a British Parliament hearing in 1988: “our land claim doesn’t take one piece of land from anybody.” How? They instead claimed a share Rent – from which they could restore their culture.
- Midnight Oil, the rock group whose lead singer, Peter Garret, ran for the Australian Senate as the nominee of the Aussie green party, the anti-nuclear party, promotes the aborigines’ remedy.
- Gifford Pinchot (1865-1946), first head of the US Forest Service (under Teddy Roosevelt who once lost a race to Henry George yet later began the US Park system), in the early 1900s challenged the logging of public land, which was infamously corrupt. He said: “The earth … belongs of right to all its people and not to a minority, insignificant in numbers but tremendous in wealth and power… The people shall get their fair share of the benefit which comes from the development of the country which belongs to us all… with equal opportunity for all and special privileges for none.” (Breaking New Ground; 1947; p 509-510)
- New America Foundation publishes “Public Assets, Private Profits” by David Bollier in which he writes: “ explore innovations in private law and technology that can keep the commons healthy and intact. (Tho’ we should do that not just for common property yet for all Earth.) Fostering the commons requires … a larger cultural vision of community and personal fulfillment… create stakeholder trusts that pay dividends to all citizens from collectively owned assets; and capture capital gains from public infrastructure.” Yet we’re all entitled to the Rent from all nature, not just the part held in common. firstname.lastname@example.org NAF, 1630 Connecticut Av NW, 7th Flr, Washington DC 20009, Andrew Harig, email@example.com
- Ex-World Bank Economist Herman E. Daly (#s 15, 43, 115, & 116) in Steady-State Economics (1977; pp. 64, 68): “the windfall Rent from higher resource prices would be captured by the government and become public income – a partial realization of Henry George’s ideal of a single tax on Rent. Using Rent to finance a minimum income could substitute for a considerable number of bureaucratic welfare programs.”
- With support from Margaret Mead, John McConnell founded the first Earth Day on the vernal equinox (proclaimed by the City of San Francisco in 1970 and UN Secretary General U Thant in 1971). Since 1980 he has pushed his Earth Bounty Program. “Those who own land, oil, gold, or other minerals should pay a 2% royalty to a fund that will provide the homeless a stake in their planet. Afterwards, distribute royalties equally to shareholders worldwide.”
- Jakob von Uexkull, founder of the “Alternative Nobel Prizes” (the Right Livelihood Awards), who wrote us for more info, speaks for many when he says, “without fair compensation, all talk of the ‘global commons’ or the ‘common heritage of mankind’ will be seen by the poor as another attempt to expropriate their resources.”
- The German Institute for Economic Research, contracted by Greenpeace, concluded in their Economic Bulletin (v 31, n 7) that “an energy tax returned to firms as a reduction in employers’ social insurance contributions and to private households as a per capita allowance (“eco bonus”) would be feasible in legal terms and have positive effects even if implemented in a single country.”
- Common Assets promoted a “sky dividend” paid to citizens from fees collected from corporations for using the atmosphere as a dump. AKA the Sky Trust Initiative, it’s a project of the Corporation for Enterprise Development. (CED, 777 N. Capitol St. NE, Washington DC 20002. Email: firstname.lastname@example.org, www.skytrust.cfed.org) Conceiver Peter Barnes (#5) spelled out the moral principle perfectly: “from each according to their use of the commons, to each according to their equal birthright.” (YES! 1999 Spring).
- 126. Redefining Progress had a cover article in The Atlantic Monthly (1995 October) on its two main programs: (a) “correct the GNP to account for social and ecological costs” and (b) “replace taxes on labor and enterprise with ones on natural resources.” And with taxes on sites, too, they later added in their 1999 report. A former writer for the Christian Science Monitor and for Redefining Progress, Jonathan Rowe (2002 April 30) gave the moral basis: “The commons, the heritage of us all, includes the gifts of nature, such as oceans and atmosphere, wilderness areas, and the quiet of the night.” The founder of Redefining Progress, Ted Halstead, added the capstone in “A Politics for Generation X”: “America could raise trillions of dollars by charging fair market value for the use of common assets – the oil and coal in the ground, the trees in our national forests, the airwaves and the electromagnetic spectrum – and the rights to pollute our air. Charge fair market value for the use of common assets and return the proceeds directly to each American citizen.” (via Caspar Davis.)
- 127. Rather than give away pollution permits for free, why not auction them off? Better than a fine or tax or set fee, requiring bids would charge industry before they pollute and let them decide how to reduce their emission. Auctions even let environmental groups bid on permits. An auction could raise $100 to $500 billion each year for carbon permits alone. Americans for Equitable Climate Solutions suggests using one quarter of that in towns dependent on oil and coal to ease the transition to a clean economy and three quarters to fund a dividend which could be as much as $800 per American per year, a la the CED Sky Trust (#125). (Christian Science Monitor, 2000 Nov 24)
- Besides supra- and sub-, there’s the more familiar surface sources of Rent. Dr. Margrit Kennedy (cited above in “Property of whom?”) claimed that the increase in German land and building value from 1950 to 1980 was enough to give every German DM800 a month for life. One wonders how much the dividend would be from only the land value.
- Robert Gilman in his magazine IN CONTEXT (1984 winter, now YES!): “George claimed that his land tax would be sufficient to pay for all the costs of government. (Yet) the benefits from government programs are generally unevenly spread. (So instead) distribute (Rent) directly to people as a Common Heritage Dividend (about $4,000 per person per year in the US).”
- The British Green Party‘s (in #26) platform (1986) claims, “Rent should never have been allowed to fall into private hands… it should now go back to everybody: it should reduce the burden on effort-based taxes in financing social services and the Basic Income Scheme.”
- The Irish Green Party‘s Manifesto (1989) states, “The land tax, used together with energy and other (‘sin’) taxes (and user fees) as a source of funding of guaranteed basic income, is a means of ensuring that everyone shares in the wealth of the land by virtue of citizenship.”
- Ex-British cabinet economist James Robertson of TOES in his Future Wealth (1989; p 105-6): “tax the site-value of all land in its unimproved state. This tax was first proposed by the 19th century American economist Henry George. We should envisage the eventual removal of all taxes on incomes and value added, savings and financial capital. Taxes will take the form of Rents and charges reasonably paid in exchange either for the use of resources that would otherwise be available for other people, or for damage caused to other people.” In his 1994 essay, “Benefits & Taxes”, he argues the feasibility of a basic income in lieu of other entitlements (“enticements” is more like it).
Some taxes and subsidies are better than others, yet all are fatally flawed. They distort price, the DNA-like carriers of information, noted Michael Rothschild in his Bionomics (1990). Alter genes, mutate offspring; alter price, mutate output.
133. William Ashworth (author of eight titles including The Late Great Lakes) in his The Economy of Nature (1995; the first book published by the Sierra Club on economics) noted that were we to replace taxes and subsidies, we’d quit distorting price. We could replace taxes with fees and subsidies with dividends. Responding to precise prices, economies could then harmonize with the rest of the eco-system.
This list keeps growing. If you hear of someone promoting some form of geonomics – sharing Rent in lieu of taxing effort – before we do, please, send us the clipping. We’ll add them to the list. Soon as the number of geonomists reaches critical mass, then the environmental movement will win geonomics for all people, for the whole planet.