On a need to know basis only.
1999 Winter/Spring/; Vol. 7, Nos. 3&4; Circ 600;
Editor: Jeffery J. Smith
TALK IN OREGON, NEW LAW I
FROM THIS PEN'S PERCH
After pausing to reconnoiter
"I have opinions of my own—strong opinions—but I don’t always agree with them." Amen, Mr. President. And that goes double for our readers. Since the last Geonomist, our readers have had enough time to change their minds and those of many others several times. It’s been over two years since we last put dark ink to clean paper. In that time, we’ve returned to Portland from Seattle, brought a new life into our home, and—revealing a mean streak—taught the President’s English to newcomers to America.
The author of the quote above now has a couple sons running for the same "oral" office. May they keep us as royally entertained. And may our attempts below to explain geonomics get you thoroughly enlightened. Meanwhile, the current president wants to spend an itty-bitty billion buying park land. His VP wants to spend tens times that diverting sprawl. Heck, we could buy up all that open space and more for nothing were we to copy the Colombians (next column).
The trick (at the risk of sounding presidential) is to leave privately-generated values in private pockets and put publicly-generated values in the public treasury (see beside). It’s a reform that won’t come in time for Peter Max, ‘60s pop artist, indicted for tax evasion. So, let’s just make him pretty up the 1040s and let it go at that. OK? Sights set on site rent
Going where no legislature has gone before, the Congress of Columbia did something that American policy-makers rarely even hint at; over a year ago, they passed Law 388 that lets cities collect some of the rise in value when land is rezoned. When word leaks out that a parcel is about to become legally buildable upon, its value and that of nearby sites double, triple, even quadruple. Imagine using some of that new value to pay for extending the infrastructure; it’d make your expansion self-financing. (Land Lines, ’98 March)
The world leaders in tapping site rent are Australia and New Zealand. In the US, Pittsburgh and over a dozen other towns in Pennsylvania tax sites high, buildings low. The legislatures of New Jersey and New York are considering bills to let their cities likewise shift their property tax. Oregon may be next.
Two decades ago, the Preliminary Report of the Oregon 2000 Commission, appointed by Gov. Vic Atiyeh, listed Site Value Taxation as a growth and cost control measure. Now, after a decade of 10% annual growth in land value, the Governor’s Growth Commission recommended using the rise in site value after expanding the Urban Growth Boundary to fund new infrastructure (The Oregonian, 99 Jan 14). The legislature is considering allocating funds to study this property tax shift within the gamut of the green tax shift (HB 2473).
Collecting site value for the public treads upon the toes of some of the most powerful interests in society - land speculators. What may have made it easier for the Colombian politicos to confront landowners is the potential loophole they’d left in the heart of the law. Local officials must negotiate with owners the size and kind of payment, whether cash or other parcels. In any country, such negotiations usually leave the public with the short end of the stick. The Seattle Times won a Scripps Howard Award for its series exposing how much value Americans lose when the US swaps pristine forests for clear-cut stumpage with Weyerhaeuser et al. (Seattle Times, ’99 Mar 14)
It’s not just that resource extractors contribute heavily to political campaigns. It’s also that since we let government tax income and sales, it need not get "the rent". If government had to live off natural values, want to bet it’d do a far better job of negotiating?
Geonomics is ...
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?" To help shift your paradigm, ponder these:
Money doesn’t trickle down unless there’s a damn leak.
Each year, how much does the average worker, whether buying or renting, spend on the land beneath their home? On the raw fuel that’s extracted for heating homes and powering cars? On the natural resource in every product they consume?
When buying land, you pay most for nearness to a downtown, yet, did you know, second most for nearness to a school whose students test highly? (Hayes & Taylor in Federal Reserve Bank of Dallas Fourth Quarter 1996 Economic Review; document #2119412 available from Heartland at 312/377-3000) If your kid brings home A’s, better hope you own, not rent - or that your community pays out land dividends to residents. Public places like schools and parks raise the value of nearby sites by more than the good’s cost. Thus land value reflects the health of society. The healthier society, the more land costs. How much do we spend on the nature we use? Is it a big part in the cost of living? While all of us pay it, who gets it? Mortgage lenders? How do they earn this multi—trillion dollar flow? None of us created the nature we use. Is it better to let a few keep it or for all to share it? From collected oil revenue, Alaska pays residents about $1000/yr. Besides oil value, how much natural rent is there?
Does sharing it cause inflation? Does it make it possible to lower or eliminate taxes upon homes, sales, and income, as in Hong Kong, often rated the world’s best city for business? Does untaxing homes make them affordable as in Pittsburgh?
Riverfront sites are usually highly prized, yet in Portland blocks of them by Marquam Bridge and the train station lie vacant. How much area do US cities waste? Land Uses in American Cities (Harland Bartholomew, 1955) found 29% unimproved. Land Lines, November '98, estimates 22% is unbuilt. How much land could taxing it save? Applied to a computer model of Boston, this shift contracted the city perimeter by a half mile (Joseph DiMasi, National Tax Journal, ’87 Dec, via cohorts Rybeck, Cobb, & Beck). Johannesburg (SA) taxes sites, not buildings; it has the fastest site recycling rate in the world, again saving land.
Does sharing rent make nature less of a commodity, less an object of speculation and over-extraction? Since land values do rise, they reward either speculation or sharing, sprawl or efficiency. Which should we choose?
Antidote to corruption
There the party in power delivers land titles to its cronies. The state heavily taxes paychecks and consumer goods and services. It subsidizes dams, freeways, military bases, etc. with inflated contracts. Taking bribes from the mafia, it looks the other way when innocents are victimized.
While these problems are everywhere, they’re so bad in some places that economies can hardly function, never mind develop. The Minister of the Interior of Argentina, Carlos Corach, admitted as much, worrying that "corruption would cost government its legitimacy" (El Mundo, ’96 Sep 20) - as if it ever had any. Alan Greenspan, chair of the US bank cartel, was surprised to discover that Russia’s transition has failed so far because beneath markets (surprise!) lies morality - the commitment to give value for value gotten. (The Oregonian, ’97 Sep 1)
For millennia, when people lost their land, other oppression soon followed. Listing nations by their concentration of land (Gini quotient) is like listing them by their human rights violations. High on both lists are the landhoarding, undeveloped Latin American nations. Nontransitioning Russia recapitulates history, converting public land into private holdings via debt.
Russians feel uneasy about the commoditizing of their land. Former Prime Minister Viktor Chernomyrdin left office with over $5 billion dollars. Whether feeling sated or remorseful, or just positioning himself to run for the presidency, in the Kremlin he told our cohorts, Drs. Mason Gaffney, Fred Harrison, and Nic Tideman (who’ll be speaking in Oregon on Tax Day), that he supports plans to tap land rent for public revenue. On sound moral footing, Russia would be again a superpower.
Courts back small claimants
About a year ago, Canada’s Supreme Court validated the land claims of some descendants of long ago Asian immigrants vs. the claims of descendants of more recent European immigrants (Oregonian, ’97 Dec 12) - undoubtedly a step toward righting past wrongs. Yet in Nicaragua (over a decade ago), one Indian tribe petitioned the Sandinistas for return of some ancestral land while another, smaller tribe petitioned the government to order the former tribe to return the same ancestral land (yet even more so) back to them. Go back far enough and it seems the good British jurist Blackstone was right: "All land titles descend from force or fraud."
In New Jersey, a court halted the state’s taking, at Donald Trump’s behest, of a widow’s land (USA Today, ’98 July 21) - undoubtedly a step toward preventing a future wrong. Had the judge ruled the other way, her holding a title free and clear would not have been enough. Though we Americans own about half the US West, it’s often used as a private fiefdom by some extractors. And one may own a home yet be paying mortgages for most of their life, just like a tenant. What matters more than who owns the land is who gets the rent. Let’s all get it, all share it, not earned incomes.
Is the US getting rich off the rich? Just before tax day last year, the press noted that the growth in million dollar incomes - a third more in ’95 than in ’93 - did add $18 billion to the Treasury - by adding $57 billion to the income of the megarich. A decade ago, the top 5% (averaging $250,000/yr) paid 26.7%. Now it’s 32%, tho’ prededuction rates are 36% for the rich and 39.6% for the super rich (Sunday Oregonian, ’98 Apr 5).
As tax day came and went, the press noted that CEO pay raises outpace their companies’ profits (Oregonian, ’98 May 2) and that many citizens do not comply with tax laws. They safely guide 17 cents of every "owed" tax dollar beyond the reach of the IRS (Oregonian, ’98 Apr 8). (And not so safely; recall Peter Max, page one.)
In Oregon, households getting over $100,000 (’98 dollars) went from 6.4% of total state income in ’84 to 23.9% in ’95. Meanwhile, the state income tax takes from people below the poverty line (Oregonian, ’98 Apr 13) to help fund the only growing budget item - building prisons. From ’72 to ’97, about half of Oregon’s workers saw real wages drop. Their total wages, despite working a 13th month each year, are less than 10 years ago and not even close to 25 years ago. So people moonlight, put off retirement, and leave parenting for working (Oregonian, ’98 May 2). Taxes are supposed to be progressive. Yet given political realities, it doesn’t work out that way. An alternative to taxing the rich might be to quit giving them the money in the first place. How much of CEO salaries and stock dividends are due to company productivity, how much to our failure to negotiate full market fees for liability limits, resource leases, procurement contracts, etc? Were we to run government like a business, and charge full value for these pieces of paper, we the people would be rich enough to pay ourselves a dividend, obviating subsidies for anyone.
Your tax dollars at work: US taxpayers gave $100 million in bonuses to the executives of Lockheed and Martin Marietta for nothing more than merging. (WILPF, Nonviolent Action, ’96 Sum) In ’95 the US spent $7.6 billion exporting weapons. The Pentagon employs 6500 salesmen to hawk and service weapons contracts with foreigners, keeping the US the world’s top exporter of killing devices. What goes around, comes around. The last five times the US sent Americans into combat, the other side had our own weapons to use against us. (Molly Ivins, Seattle Times, ’96 Aug 5) Built by the Army Corp of Engineers, four Snake River dams waste $87 million per year, a fiscal leak that could be plugged by simply breaching the dams, claims Phil Lansing, Oregon Natural Resources Ccl economist. Without the dams, users would pay market rates for water and electricity, while the return of salmon would swell fishing revenue. (Oregonian, ’98 Apr 30).
Endangered grizzlies - all 400 left - cost Wyoming $800,000. (Oregonian, ’97 Sep 28). But the bears wouldn’t be endangered had they their own habitat. Wilderness would not be as consumed by ranches were we to raise grazing fees to what private landowners charge and to eat even less red meat. How can we afford to buy a refuge for wildlife? Well, raise "land dues"; that lowers land prices. The higher the dues, the less land value leftover to be capitalized into price.
For the first time, the US Forest Service admitted losing money. (Oregonian, ’97 Nov 22). The amount was about 95% less than the $200+ million calculated by the Wilderness Society. (Oregonian, ’98 Jan 8). In their next annual report, the USFS counted the cost of building logging roads and upped their figure to $88 million lost. Once they include their below market timber sales and ballooning overhead, their loss statement may just jibe with reality. (Oregonian, ’98 June 11).
Generous taxpayers also reimburse those who build in flood zones or on steep cliffs. In some cases, we pay more than the value of the home, and pay over and over, to re- and re-build, flood after flood. And not just for homes but also golf courses. After the ’93 LA earthquake, we paid $88 million to repair a professional sports stadium. At least we got our priorities straight; even without a disaster, who could live without football? (Seattle Times, ’96 July 21)
Since ’93, the US has bought 17,000 properties in flood zones instead of build more dams and levees. FEMA saves at least $2 in avoided cost for every $1 buying out those who challenge nature. Still, federal flood insurance is hundreds of millions of dollars in debt to the US Treasury. (Oregonian, ’98 July 17). Once we’ve bought up the flood zones, let’s end federal insurance. Unless, heck, I make huge mistakes, too. Anybody care to bail me out?
Ecollapse - paid in full
Funny how we join groups to solve problems that, by paying taxes and subsidies, we create. Any one of the problems below is bad enough by itself. But it’s not by itself. They all worsen each other.
The ecosystem might make do without some of the big, beautiful, endangered animals, but it might fail minus one of every eight plant species. Native plants, the bottom of the food chain, are losing ground to burgeoning agriculture and invading non-native species. While most species are secure, the 12.5% at risk is probably an underestimate, says the World Conservation Union (NYT News Service, Oregonian, ’98 Apr 9). Just another reason to use land more efficiently so that we need not use other land at all.
The American Geophysical Union became the latest prestigious scientific group to warn us to attend to global warming (Oregonian, ’99 Jan 29). A NASA team of experts, using airborne lasers, measured shrinkage in Greenland’s ice cover precisely for the first time. The amount was more than expected but not enough to alter ocean currents, climate, and sea level in our lifetime - so far (Oregonian, ’99 Mar 5). JAMA, The Journal of the American Medical Assoc., warned that new infectious diseases will emerge and old tropical ones reemerge as global temperatures rise (Patz et al, ’96 Jan 17).
Even as America tries to slow down its emission, others are speeding up. We on the West Coast breathe a pollution that is flavored and augmented 11% by smog from China, found a UWA researcher (Oregonian, ’97 Dec 12 & ’99 Mar 5). Is it too late to set a better example for industrial development, to export the cutting-edge technology we don’t even use yet? Not if we shift taxes from goods to bads and subsidies from bads to goods. That’d rearrange rewards, leveling the playing field for clean fuels and motors, lightweight vehicles, efficient mass transit, and multi-use settlements.
Home, free home
If you’re ruining your planet, Henry David Thoreau wondered, why have a home? Many people won’t, given how prices are inflating.
Her property tax bill jumped 10%, so a Portland writer wrote an article for the local paper. In it she admitted that she’d done nothing to raise the value of her property 10%. She didn’t have to. Landowners, noted JS Mill, "grow rich in their sleep." In fast growing places like Oregon, prices double in less than a decade. Realtors call Portland by far the highest-yielding market in the country (Seattle Times, ’99 Mar 14). Rising land values are great for people selling out. But for those trying to hang in there, it can be painful. For pricey homes, Portland fell eight places from 1997 to 44th out of 75 for 1998 (Oregonian, ’98 Jun 26). Mid-priced homes can’t be far behind. Here renters now outnumber homeowners, found a PSU student researcher, Katya Haub (Portland Alliance, ’97 Aug).
So working residents can stay put, Aspen (CO) uses general taxes to subsidize the unfortunate - those getting less than $118,000 annually, one half its year-round populace. Elsewhere, voters of many states cut and cap their property tax, opening a Pandora’s box of unintended consequences. The cap inflates land prices further, widens the gap between rich and poor, and makes speculators drool even more. An alternative solution is to raise the rate on sites, collect the full annual market value, and return it to residents. As values go up, so would one’s land dividend. Politicians and speculators couldn’t play favorites with the tax code. Residents could afford to live where they love, to love where they live.
Crime low normally
While the chance of getting murdered fell again last year as boomer criminals age (NYT, ’98 Dec 14), it’s always been low some places. Some neighborhoods in Chicago, as poor as any other, suffer less crime. Their residents involve themselves in community and put down roots, found Harvard’s Felton Earls. Even if they’re not owners, rents are more affordable (Oregonian, ’97 Aug 17). Pittsburgh has a crime rate rivaling a small town. It has stable neighborhoods and affordable housing, thanks to a property tax that falls on locations, not homes.
The nation of Costa Rica enjoys by far the lowest murder rate in the Americas, one per 200,000 inhabitants, which is 1/10 the second place country and 1/20 the US. Costa Rica has no army, a real democracy, a large middle class, and the broadest distribution of land in Latin America. Ironically, the bloodiest country is also in Central America. The murder rate in El Salvador, where the struggle for land continues past the peace treaty, is about one and a half times as bad as Gary, IN, the US’s murder capitol (El Latino de Hoy, ’97 Aug 6).
Is our species cruel or kind? If government does not provide social services like schools and clinics, would private individuals make up the difference? In the absence of statist coercion, would we cooperate? Maybe. The average American household does give about $2,500 each year (5/7 of a tithe). So does the average corporation (there’s millions of them). The well endowed foundations give about $2 million each (Oregonian, ’98 Dec 14). In Oregon, the poor give more than the national average, the rich less. In Portland, a few declined their "kicker" (tax refund), giving $250,000 to schools instead (Oregonian, ’97 Dec 17). Maybe we’d do more giving on our own, if the state were not already doing so much for us.
FROM THE OP-ED PAGES
There a rentward drift?
Are more people coming to geonomic conclusions? Seeing the mistake of taxing goods, subsidizing bads? The wisdom of charging for what one takes? And using the collected revenue to benefit everyone equitably? Ask Ann Landers. Her readers gave her an earful, er, mailbox full, after her column was not sufficiently critical of the IRS. A poll of IRS agents found most felt justified in lying to Congress (when in Rome …) (Oregonian, ’97 Jun 22).
Also getting an earful are the beneficiaries of the US income tax code, and from the usually dutiful George Will. "Amending the tax code amounts to ap-propriation. Every wrinkle was put there to please some constituency… Simplification would restrain the political class and cripple the coterie of lawyers and lobbyists who are parasitic off an ever-more-baroque tax code… The limits of that class’ desire to please the public are reached when what pleases the public limits that class." (Seattle Post-Intelligencer, ’99 Mar 14). Frederick Douglas said over a century ago, "the extent of tyranny is the limit of your endurance." Meaning, it won’t stop by itself.
It’s why the IRS doesn’t harass oil companies. Some owe us over $2 billion in back royalties from pumping public land. USA TODAY urged Congress to not just go get it but also close existing loopholes (’98 Aug 27). What about late fees? Back interest? Sheesh!
Collecting oil rents and surface land rents is way over due in Russia. THE WALL STREET JOURNAL’s George Melloan noted that the IMF bailout let the Duma "sidetrack the very useful reform of giving private owners full title to land and subjecting it to taxation." (’98 Jul 21). Did the IMF, no friend of the land tax, cut a deal?
No smokey-room dealing in Switzerland. Their major news weekly magazine, WORLDWEEK, covered the Prince of Liechtenstein’s proposal to abolish the income tax and the call by our cohort, Bruno Moser, to tax only land (above a certain value), citing the 19th c American tax reformer Henry George (’99 Jan 16).
The Association of Washington Cities, citing its benefits, called upon their state legislature to study the property tax shift (’93 Jun 29) as Oregon may do (see p 1). Before the Maryland legislature (’97 Jan 23), the state chapter of the Sierra Club advocated a tax on site values to impel owners to use land more efficiently, curbing sprawl. Chicago’s conservative Heartland Inst. offers the policy to legislators via fax. In his Home from Nowhere, James H. Kunstler, who spoke at the 1996 Henry George conference, devoted a chapter to the concept. For the first time ever, the planner’s bible, JAPA (Jrnl, Amer. Planners Assoc.) addressed revenue reform in an article by cohort Tom Gihring (’99 Winter). Tom was the housing consultant on a Seattle project that the APA gave a ’99 National Award for Planning.
This shift in the property tax from homes to sites not only compacts cities, it also knocks down housing costs and spurs commerce. THE OREGONIAN gave the reform full play, running an op-ed by this editor and cohort Kris Nelson (’98 Jul 28) and a letter by yours truly (’98 Nov 25). Other Oregonian periodicals running op-eds by Kris are The Heliogram (’98 Dec/"99 Jan) and The PeaceWorker (’99 Feb).
The property tax shift and the rest of the green tax shift was the subject of an Oregonian Special Report (’98 July 13) and an op-ed in The Oregonian by Jeff Allen, Exec Dir. of the Oregon Environmental Ccl, and Alan Thein Durning, Exec Dir. of Northwest Environment Watch and co-author of Tax Shift (1998 Apr 13).
Same date, they also got coverage in the Portland DAILY JOURNAL OF COMMERCE. Durning’s previous book, This Place on Earth, which also argued for shifting the property tax among others, was reviewed by the Seattle Daily Journal of Commerce (’96 Oct 17), The Olympian (’96 Dec 8), and Vancouver, BC’s The Georgia Straight (’96 Nov 21-28). All above cited the site tax.
The other half of the revenue equation - spending - also garnered ink. TIME ran a month-long series on largesse for business, putting the annual subsidy at $125 billion (’98 Nov). The WorldWatch Institute published The Natural Wealth of Nations by David Roodman who put corporate welfare at $650 billion from the US and $1.5 trillion from the world. The book, which has a chapter on the property tax shift, was reviewed in The Peaceworker by this editor.
The centerpiece of revenue reform is equitable disbursal. The Green Party of Ontario, Canada, advocates an income supplement (which could come from natural rents) and a fourday workweek (which people could choose after getting a share of the rents). Cofounder of Working Assets, Peter Barnes hooked the dividend to part of the proper source - rents for using the sky as a dump - spelling out the principle perfectly: from each according to their use of the commons, to each according to their equal birthright. (YES! ’99 Spring)
The total package - collect rents, not earned incomes, and fund everyone, not special interests - found its way into the Willamette Week (’98 Feb 11) via a letter by this editor and into Oregon’s Future (’98 Winter), guest edited by yours truly. The Big Idea was picked up by Ed Clark, Ph.D. Chicago, now in the Office of the Budget and Management, and according to Dr. Nic Tideman, potentially in line for a Nobel prize. Ed also picked up our terminology, using geoism, geo-economics and geo-classical. Yes, such ideas are spreading.
FROM THE ARCHIVES
Seeing now from long ago
Early futurist noted for his science fiction, Englishman H.G. Wells also published essays. In his 1933 The Shape of Things to Come, he critiqued Marx and Henry George who once was more popular than Marx. Wells found Marx naïve about psychology and the intricacy of economies (events seem to have born him out). Wells faulted George for delivering the ever-growing rent to the state. Anticipating this argument, George had proposed a citizens dividend, unknown to Wells.
Wells would have known the career of Winston Churchill, portrayed in the historical novel, The Man from St. Petersburg, by Brit Ken Follett (’82). He wrote, "Churchill (as a Liberal Minister) was engaged in a vicious attack on the very foundations of English society - taxing landed property, undermining the House of Lords, trying to give Ireland away to the Catholics …" Guilty as charged! The last act of any political conse-quence by the House of Lords was to block the Liberal‘s site value tax. Yet it proved futile. What did block SVT, once passed into law, was the Great War. The Liberals agreed to wait to implement the land tax until after victory. Yet then Conservatives regained power and repealed the tax reform.
In the 1880s in Oklahoma, not one Cherokee was in debt and everyone owned their own house; many were mansions. Under 50,000 people, some were millionaires. They were followers of Henry George, accused Congressman Henry Dawes, and would never progress further until the "common" was broken up and "every person learned the virtue of selfishness". Ten years later the federal government used Dawes' report to justify dispossessing Cherokee and other indigenous nations. From And Still the Waters Run by Angie Debo (in email from Ray Evans Harrell via Caspar Davis).
In 1870, Ohiyesa, Santee Sioux, told his nephew, Charles Alexander Eastman, "I am informed, but this I hardly believe, that their Great Chief compels every man to pay him for the land he lives upon and all his personal goods every year! These people have made many rules that the rich may break but the poor may not. They take their tithes from the poor and weak to support the rich and those who rule. They claim this mother of ours for their own." An anonymous Omaha was recorded saying, "Now the face of all the land is changed. The living creatures are gone. I see the land desolate and I suffer an unspeakable sadness. Sometimes I wake in the night, and I feel as though I should suffocate from the pressure of this awful feeling of loneliness." The nephew wrote, "As a child I understood how to give; I have forgotten this grace since I became civilized." A contemporary, Vine Deloria, Sioux, added, "We Indians will show this country how to act human. Someday this country will revise its constitution …" (From Weird History 101)
In Mutant Message Downunder, an amateur’s telling of her walkabout, Marlo Morgan (’91) writes, "(aboriginies) don’t believe ownership of land was ever intended. Land belongs to all things. Agreements and sharing are the Real Human way. Before the British came, no one in Australia was without land."
The underlying moral principle of sharing nature’s bounty goes back forever and still resurfaces. Andrei Codrescu, NPR commentator, in his The Dog With the Chip In his Neck (’96), writes "Whose woods are these? Nobody’s… we belong to them not they to us."
Lost Rights, lost liberty?
Lost Rights: The Destruction of American Liberty by James Bovard (’95) was reviewed in Presidential Studies Quarterly by Dr. C. Lowell Harriss, emeritus Columbia, recipient of Distinguished Service in Economic Education (‘90), proxy recipient of the Nobel Prize for departed friend William Vickrey (’95), and Advisor to the Academy of Political Science and the Geonomy Society. He writes that while one individual does not experience the extent of bad government, this compendium of hundreds of grim examples reveals it to us. Twenty small newspapers were bankrupted by running a classified ad with the phrase "adults only". Drug seizures cost many innocents their homes. The IRS demands taxes from nonrealized income. At the beginning of the decade, a senator remarked "we probably know more about the KGB than we do about the IRS." It’s enough to make Libertarians of us all. This abuse of power follows our reliance on regulation in lieu of adherence to principle. To simplify and justify social life, leave private values alone and share the public ones attached to land.
The $30,000 Solution
Say we did share the economic values that society, by its mere presence and cooperation, generates (and which adhere to land). How much would your annual Earth Share be? Author Robert Schutz (’96) comes up with $30,000. Cohorts Hanno Beck and Ed Dodson favored us with their reviews. While there are plenty of points one can disagree with, Hanno notes, Schutz did address a wide range of problems that his plan would face. Ed points out that Schutz would share some incomes (lottery winnings) that others consider individually earned. And while predicting loan rates would fall, Schutz did not show how to retire the federal debt. Both Ed and Hanno do recommend the book (as do I).
The Canadian take
The Canadian Research Com’t on Taxation issued to new books by attorney, Francis K. Peddle, Ph.D. Cities and Greed cites where the property tax inhibits improvements, inflates prices, and impels sprawl. It links the land price cycle to falling productivity and employment. It reviews the canons of taxation, the success of site taxation around the world, and its history in Canada. In Henry George and the End of Tax Commissions, he rebuts his government’s arguments for a tax mix, the politics behind such recommendations, and shows how to minimize appeals to property assessments. (CRCT, PO Box 913, Stn B, Ottawa, Ontario Canada K1P 5P9; 613/594-5881)
Headlines give headaches
Warning: the following actual headlines may cause readers to gnash teeth and strain brain: "Job news good; market nervous". Or, "Boon in pay a bane in inflation fight". Or, "Japan’s economy on verge of collapse, Sony exec warns". Notice the bias for business, against labor, for consumption, against conservation? The articles under these headlines quoted "experts", all of whom were proven wrong. The market climbed as did jobs. Wages outpaced inflation. And the Japanese still easily meet their basic needs. Let’s make economics ineligible for the Nobel prize, wrote The New Yorker’s John Cassidy (’96 Dec 2), citing the remark by Nobel laureate Bill Vickrey (who spoke at the ’91 Council of Georgist Orgs Conference) that such "wizardry" is not improving human welfare. Eventually, the press did offer a retraction headline: "Economic good times defy old theories", yet did not cover the theory that does explain the business cycle (commentary below). And they had to run this headache relief: "US and IMF made Asia Crisis worse, World Bank finds". The article left out what’d make any crisis better: Lend not to governments but to private enterprise in countries that tax not effort but the rent from sites and resources.
Keep debt, skirt recession?
Six times recession has hit the US. Each time, noted George Washington U’s Frederick Thayer in The Washington Spectator, it followed the US paying down its debt. Cause and effect? Or night following day? Probably the latter. During good times, governments, like everybody else, pay down outstanding debt. Good times also pump up the value of land, the most basic factor in production (it provides both raw materials and a place to conduct business). When speculators finally push land values beyond what people can afford to pay, then the economy slows, beginning the end of that spin in the business cycle. Fallen land prices start up a new round. Affordable mortgages, as now, keep it going. Decades ago, Homer Hoyt tracked this 17 year cycle thru a century of Chicago land prices and business swings. Aussie investment consultant, Phil Anderson, incorporates the cycle into his reliable guesses (Economic Indicator Services, Ross House, 3rd Flr, 247 Flinders Ln, Melbourne 3000; 613/9-650-3155; Fax 650-8642; firstname.lastname@example.org). To temper the economy’s mood swings, so we can avoid recessions and pay off debt, just put public values in the public treasury. That’ll halt speculation-driven cycles.
The mayor of Mazatlan, after several conversations with his staff and ourselves in both Mexico and America, announced back in 1996 in Seattle at a Sister City reception that his city would sell geobonos. These bonds raise funds for improving infrastructure; the improvements then up land values which the jurisdiction collects to service the bonds. Used in California in the 1890s, they make public projects self-financing. The Basic Income European Network Conference in Vienna in 1996 and the BIEN Conference in Amsterdam in 1998 both heard GeoSoc presenters. At the former, VP Gary Flo, galvanized Paul Metz, Director of the European Sustainable Business Ccl, to include site rent in green revenue reform. At the ’98 conference, reports revealed the Euro countries closest to paying BI. While they all have high taxes and unemployment, it’s the small ones with successful classical liberal (libertarian) parties (thanks to ProRep) that lead the way. While in Europe, we met with James Robertson, former British Cabinet economist and founder of TOES, The Other Economic Summit, in a pub praised by writer Jerome K. Jerome. In Spain, we stocked the U of Alicante’s library.
GeoSoc VP Gary Flo, also talked to the Itntl Society for Ecological Economics in Boston in ’96. It was attended by the Chair of the President’s Ccl for Sustainability. Flo, who met ISEE founder Herman Daly, explained how sharing rent stabilizes economies.
Our presenter in Holland, Pres. Smith, also talked to the U of Oregon’s Economic Alternatives to Corporate Dominance (’97 Mar) and Alternatives to Growth at Portland State U (’97 Oct), becoming friendly with the local activists who organized the hugely successful event (attended by over 600 and accorded front page coverage). In ’98 he presented to the U of Wisconsin’s Who Owns America and to the World Future Society’s FutureVision in Chicago, recorded by a radio station.
We organized the annual conference of the Ccl of Georgist Orgs, held in Portland in late July and early August. Some of the 125 who came called it the best conference they’d ever attended (probably people used to the meetings of retired bean counters). Speakers included a state senator, Brian Johnston, a county commissioner, Pete Sorenson, an executive director, Jeff Allen, and a slew of other local honchos. It was plugged by local newsletters, Pacific Radio Station, and the mainstream press. The Oregonian gave it space three days, the capitol’s main daily, The Statesman Journal, put us on the front page. Channel 8 TV cited it, as did the main newspapers of Corvallis (The Gazette) and Roseburg. The whole affair pushed the movement in Oregon a quantum leap forward. Encore, anyone?
In late fall of ’98, Smith and Kris Nelson attended Greening State Taxes in Seattle, organized by the DC-based Center for a Sustainable Economy. The speaker from the League of Conservation Voters reported that in a poll of Californians, a majority favored shifting taxes off improvements, onto locations. It seems they’ve had enough of the inequities of Prop 13. Local hero Alan Durning (see p 2) reported that taxing sites could meet over a fourth of regional public revenue needs.
Smith gave slide shows (’99 Feb) to Reed College environmental students and to a gathering south of San Francisco covered by The Christian Science Monitor (99 Feb 26), spurring an SFSU prof, a soils scientist, and some Jerry Brown backers to work on setting up a follow-up talk with the Oakland mayor.
In print, on tape, at site
The UK’s Land Policy Council printed our checklist of preparation for lobbying a highlyplaced official in their frequent strategy letter to supporters (’97 Jly 12). The UK’s Turning Point 2000 by James Robertson (above) noted our paper to the BIEN ’98 conference in Amsterdam (’98 Sep). BIEN posted it on their web site. We won an essay contest sponsored by the Simple Society who also posted our entry at their site. Other of our materials are posted on the Banneker Center site, www.progress.org. Our ’98 summer talk to the Futurists in Chicago was captured by Northwestern Univ. radio, WZRD. The local Pacifica Radio outlet, KBOO, interviewed us twice in ’98. Our op-ed and letters ran in the Portland press (above, p 5). And our gift of 14 books, 62 pamphlets, and four periodicals were gratefully acknowledged by Portland State University Library Director C.T. Pfingsten (’97 Sep 25).
Got text? Got jobs?
Phil Anderson, Aussie economic prognosticator (commentary, p 8), e-mailed us (’96 Sum), saying "Some of your material simply has to get on the net. It’s good reading. It’s also modern and up to date." He proposed a web magazine of our materials. The more websites, the merrier we stick to visitors!
The Healing Currents Journal (healingcurrents.com) in Eugene OR requested an article (’98 Aug 11) that we could not author, being abroad. Stephen E. Roulac (www.Roulac.com) wrote (’98 Aug 20) requesting a copy of our talk before the Futurists in Chicago (above, p 8). Jakob von Uexhull, founder of the Right Livelihood Awards and co-founder of TOES (The Other Economic Summit), requested (’98 Dec 20) a copy of our talk before BIEN in Amsterdam (above, p 8). He enclosed his article in the British press on the madness of bewailing Japan’s (or anyone’s) slowed growth. He, too, urged global sharing. Sean Healy, SMA Ph.D., Director of the Council of Religious of Ireland (a part-public agency promoting basic income), whom we met in Amsterdam, responded with a request for more info on our Housing Voucher proposal and for feedback on their tax policy recommendations. Copies of either ‘98 talk or our housing brochure are available for $2.00.
Finally, graduate economist Fred Fialco wrote asking for work, noting the value of our mission and how much fun it must be to accomplish it, perhaps expecting to be paid. Were our work as remunerative as it is valuable and fun. Maybe some year we’ll get enough grants to turn all us volunteers into staff.
Notes from donors & others
C. Lowell Harriss, New York book reviewer (p 7) ’98 Dec, sent his annual update and harvest of cartoons, some of which grace these pages, plus his op-ed from his local paper on cutting taxes to expand leisure and to let us benefit most from higher education. The National Tax Assoc. awarded him the Daniel M. Holland medal "for distinguished lifetime contributions to the study and practice of public finance" and a former student established a professorship in his honor at Columbia. We congratulate him, thank him for all the clippings, and compliment his good taste in siding with us.
Meta Heller, diehard NW activist (’99 Jan 2): "The Georgist convention in Portland was certainly superb. At a program I’ve been working on since last June, the MAI Forum, the mayors of Olympia and Tumwater will speak."
From one organizer to another, thanks.
Vera Katz, Mayor of Portland (’99 Jan 13): "I found the information you presented on the Georgist theory to be interesting." Yet I hadn’t mentioned old Henry, just the idea of shifting the property tax from homes to sites. How about that - an educated politician! Dan Reimus, Illinois Institute of Technology (’96 Sep 13): "A short listing from The Design Exchange concerning The Geonomy society needless to say caught my interest. Can you please send further information?" But of course. Any other takers out there?
Tom Sherrard, advocate of land trusts and of the Loose-Leaf College of Everyday Knowledge, a compilation of quotes, texts, charts, and cartoons based on the work of social reformer Ralph Borsodi (2289 Comstock St., San Diego CA 92111; 619/541-7852; Sherrbrt@aol. com): "(Quoting B. F. Skinner): The question is not whether machines think but whether men do." Thanks for the loose leafs. They do enlighten and entertain. Ishi Crosby, Earth Village Network based in Holland, works "to set up Land Trusts that manifest democracy, permaculture, and bioregional principles. Is such possible in your region? Please write us feedback, ideas, suggestions." That goes for all of us - network!
Karl Williams, native Aussie and world wanderer enclosed his captivating travelogue from South Asia (’98 Nov 18): "Thanks for the way the CGO conference was pulled together. I’m certainly not the only Georgist who thinks it was a truly outstanding accomplishment." That’s a relief. The Georgist foundations paid me several K to pull it together. Now we must build on that accomplishment a movement that won’t rest until Earth’s worth, not each’s earnings, are shared fairly.
Artie Yeatman, renewed saintly sustainer and officer in Ralph Borsodi's School of Living land trust in Pennsylvania (’99 Feb 8); "Sorry to miss your conference last summer. I vowed then that I would send you the money I saved by staying home, this $500 check." Wow! If not for you, I couldn’t believe such people exist. Glad to hear all’s well on the farm and hope to see you at this summer’s CGO conference in Maryland.
Newals & Renewals
Drawing from the ranks of activists and academia, GeoSoc recruited and would like to welcome: Richard Biddle, Pennsylvania dispenser of humor, Hamlet Hilpert, ex-county commissioner and Navy officer retired near Olympia, Bryan Kavanaugh, Aussie appraiser, Michael Keller, Oregonian reader of this journal, Bryce Logan, Portland computer artist, Chuck Metcalf, California jazz bassist, Virginia Neidig, Oregonian reader of geo-lit, Kris Nelson, Salem geonomic consultant, Robin Robertson, New York philosopher, Tony Rufolo, Portland State economics professor, and Art Scholbe, Chicago list server, raising our individual donors to 120. Recent renewals came from Hanno Beck, C. Lowell Harriss, Gene & Pat Levine, John Morales, Vern Saunders, Nadine Stoner, and Artie Yeatman. If we missed your name, try sending your money all over again.
At $20k, 1998 was four times bigger than 1997. Most of the grants were for organizing the annual conference of the Council of Georgist Orgs held in Portland. We gratefully acknowledge the generous support of the Robert Schalkenbach Foundation. Another substantial backer was Common Ground--USA. The Oregon-based Share-It-Now Foundation also helped out, as did the Southern Californian Bernstein Foundation. Besides organizing, we were honored for speaking at conferences by the University of Oregon’s "Local Alternative to Corporate Control" (1997 Spring) and by the Oregon Natural Resources Council’s "Alternatives to Growth" at PSU (1997 Fall; see page 8). And besides speaking, we were enabled to attend "Greening State Taxes" in Seattle (’98 Dec) by the Energy Outreach Ctr. Beyond conferences, we also won a hefty grant in an essay contest from San Francisco’s Redefining Progress to do a scoping paper on the property tax shift. Big thanks to all you generous and visionary people. Our existing literature won orders totaling over $150. Our most popular pieces are "Where Tax Reform Has Worked: 18 Case Summaries" and "101 Famous Thinker on Owning Earth" and "81 Notable Greens on George". They’re available for $2.50 a piece.
Where else the money goes
To explain geonomics and recruit supporters, we’ve met with numerous opinion leaders in government, administration, academe, and grassroots groups. We want to grow our monthly meetings, so do come. We also put on courses. Seattle’s Knowledge Exchange Ctr asked us to offer a class, but before the semester began, Smith moved back to Portland where he did teach his course on "Closing the Income Gap" via the Red Rose School. There we hope to repeat our offerings. Do register. Know of any other venues?
We’ve begun a state-of-the-art slide show of one aspect of geonomics - shifting the property tax. We got artists and hi-tech programs on the job and an economist to deliver the finished spiel. Our aim is to present our show to university classes, our own classes offered via extended education, activist groups, and charities. Show it enough and we’ll grow a ground swell leading to a public hearing co-hosted by Metro. Care to help finalize it? Want a presentation to your group? Just call to set it up.
After shifting the property tax from buildings to locations, what’s the new bottom line? We’re wrapping up a study of Salem OR site values to see who’ll pay more, who less. Just announcing the study drew coverage from the main papers of both Salem and Portland. Look for fresh press coverage of the results soon. And if you’re good at PR, want to help put on the next one press conference?
What you can do
Want to answer any of the calls above? Do come to a meeting, register for a course, speak in public, or help put on an event. We meet monthly, every second Monday at noon in downtown Portland at the Lebanese restaurant Abou Karim (221 SW Pine St) for pleasure and business. Besides doing the above, you could share this newsletter, write for it, edit it, illustrate it, lay it out, send in clippings, review books, order our literature, invite us to give a slide show, introduce us to reporters, funders, policy-makers, and others who can help us geonomize the economy, help do research, become an intern, do a piece on us for another outlet, and come participate in the Tideman event (below). What ideas do you have?
Coming up: Tideman talk
Recently returned from Russia where he testified before the Duma and met former prime minister Viktor Chernomyrdin, Dr. Nicolaus Tideman comes to Oregon to address all things geonomic. Tideman, a Reed alum, earned his Ph.D. at Chicago, taught at Harvard, served on a presidential commission on inflation, penned an open letter to Gorbachev signed by dozens of economists including four Nobel laureates, and now is on the faculty of Virginia Polytechnic.
Tax Day, April 15, Thursday, he speaks at Reed College at 7 PM in Vollum Hall. Friday the 16th he’s in Salem to speak at Willamette U in the morning and at the capitol in the afternoon, then back to campus for a public presentation. Saturday he’s back in Portland to speak at the monthly meeting of policy wonks at 5209 SE 28th Av. (near Steele St.), 6pm potluck and 7pm.
Outside the nation’s capitol in Gaithersburg MD, advocates of the George tax reform are gathering just after the 4th of July to catch up, swap lies, stay up late, and plot the overthrow of ignorance and apathy. Your editor will contribute to the festivities with a talk on green dividends. Attendees can expect to learn much, enjoy lots, and lose themselves in a temporary haze of geophoria. To join or get more info, contact the COGO, 888/262-9015 or e-mail: email@example.com
What else you can do
You could use the coupon below to join the Geonomy Society. All contributions are fully tax-deductible. Remember. It is on the wings of donations that awareness spreads. And the sooner the word gets out, the sooner the world gets well. Thanks.
Dear Geonomy Society (an educational IRS 501[C[3);
Here's my tax-deductible yearly dues:
___ $15.00 to subscribe to THE GEONOMIST.
___ $25.00 to be a supporter receiving THE GEONOMIST plus free slogan button, discounts, and the right to vote.
___ $50.00 to be a sustainer receiving above plus free bumper-sticker and T-shirt.
___ $100.00 to be a stalwart receiving above plus free two books.
___ $500.00 to be a patron receiving above plus free signed original editions of art and posters.
___ $1000.00 to be a benefactor receiving above plus free passes to all events and programs (except global tours).
Send to The Geonomy Society, 1611 SE Nehalem Street, #2, Portland, OR 97202
bottom line: Secure Earnings, Share Earth