Prospects for a Green Tax Shift
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Several nations are improving their tax structures by reducing taxes on labor and commerce, and drawing more revenue from pollution, sprawl, monopoly and special privilege instead. Here are some excerpts from a March 2002 presentation in Senegal made by Alanna Hartzok, who runs the Earth Rights Institute. |
Democracy, EarthRights and Ecotaxation
by Alanna Hartzok
Our concern is for democratic rights to land and resources and of the rights of the earth itself to be healthy and to have healthy ecological systems. By Earth Rights, we have these two meanings - extending democracry to include the human right to land and resources and the right of the earth to maintain ecological health and integrity.We are connecting these subjects of earth rights and democracy with taxation, with public finance policy. We are using the term ecotaxation also in two ways. One is economic justice taxation specifically, economic justice in land and resources. The other meaning of ecotaxation, green taxation, is paying fees for use of the environment, paying fees, polluter taxes, for use of land, air and water resources.
We see that many goals of the Green agenda for sustainable development can be strongly met by getting a handle on how we finance governance. The proper source of finance for government is very important for sustainable development. We will be presenting a framework of how we can move beyond and out of the neoliberal economic model to a model that we might call Geoclassical Economics, or earth centered economics.
While the basic geoclassical economics principles are very universal and go back a long time historically, in the United States there was a man named Henry George and he was very concerned about the rich / poor gap. His work became a very big movement in the late 1800s. It was a movement that was alive in England and Ireland and Australia as well as the US.
What happened was that very wealthy people wanted to cut out, to undermine this analysis and approach to solving the problem of the rich / poor gap. They paid academics at Columbia Unversity in New York City and the University of Chicago to develop "neoliberal" economics in order to replace what classical economics was proceeding towards, which was an understanding of how to solve the growing gap between the rich and the poor. The economic elite squelched this entire line of thought. For further historical details I refer you to the book The Corruption of Economics by Mason Gaffney.
In classical economics there are three factors of production - land, labor and capital. The neoliberal system put land, meaning all the resources of the earth, under the category of capital. They collapsed the primary factors of land, labor and capital into just two factors - labor and capital. We have been under neoliberal economics for the past one hundred years, causing a lot of problems by making the earth a commodity for selling, for profit.
Very basic principles now are these: (1) we are all human beings; (2) we have an equal right to exist; and (3) to exist, to survive, we have to have access to land and resources. This is common sense. We know this. These are basic principles. With equal rights to exist and needs for natural resources, we extend this reasoning now and state that we must have equal rights to the earth.
The problem is, democracy has not given us rights to the earth. We have no birthright to the planet. And so now very few people own and control a vast amount of the earth's land and resources.
Here I have a little model of the Liberty Bell. But you know, it has a big crack in it. That crack is -- no democratic rights to the earth.
The gap of rich to poor is growing. Less than 300 multi-billionaires have more wealth than half the people on earth. Much of war and conflict is over land and resources. Democracy has no way to solve these resource conflicts. It has no basis in fair sharing of land and resources. This problem is destroying democracy in many places. No matter how fast countries develop, this rich/poor gap grows. Even in a wealthy country like the United States, the top 1% has more wealth than the bottom 90%. In our cities there are people who are homeless and we are seeing hunger again in America.
I will tell you a story to give you an example. In the Silicon Valley, the area of California where the computer industry is centered, many people who are making good money cannot afford to live there because the land values are so high, and thus the housing is too expensive.
In another area, a neighborhood in Sacramento, there were people making substantial incomes and renting nice houses. The wealthy man who owned the houses evicted them all. Without land rights, any of us can become homeless overnight.
What to do? How do we create democracy that works for a fair distribution of wealth and which solves our environmental problems? We can use the mechanism of public finance, of taxation policy, and change it, based on the principle of "pay for what you take, not what you make." If you are taking more than a fair share of land and resources, you pay to the rest of us a higher tax fee for the land and resources which you take. This can create a land reform. And you pay for polluting the water, or the air or the land. You pay full costs to pollute so you are encouraged to stop polluting.
Right now in the world, 93% of taxes fall on labor, on our work. Only 3% of taxes are on environmental damage, and 4% are for land and resource rent. We want to reverse this. So that people can keep the full capacity of what they work for, take taxes off of labor and shift the tax base onto land and resource use to prevent land speculation, land monopoly and land profiteering and to inhibit environmental damage.
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Alanna Hartzok is United Nations NGO Representative International Union for Land Value Taxation. For the full version of Hartzok's presentation and other from the seminar in Senegal, click here.
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