Tax Reform Means Rebates for People, Efficient Land Use
|August 9, 2002||Posted by Jeffery J. Smith under Archive, Progress Report, The Progress Report|
Rebates for People, Efficient Land Use
GREENS LEAN MORE TOWARD LAND, LESS TO POLLUTION
by Jeffery Smith
A majority of Californians, earlier this fall, “voted” to replace the property tax with a tax heavier upon land, lighter on buildings. This shift in taxation, primarily for commercial parcels, would, most voters believed, curb sprawl and cut the cost of housing. The votes were cast not during the general election of November 3rd — the result, by a margin of 56% for this Property Tax Shift (PTS), was the outcome of public opinion research commissioned by the California League of Conservation Voters. (The Fund conducted a statewide poll of likely voters and a focus group in the San Fernando Valley, ground zero of the Proposition 13 tax revolt.)
Sam Schuchat, Executive Director of the CLCV and a member of governor-elect Gray Davis’ Transition Team, Appointments Unit, found the green PTS more acceptable to voters than other better-known green tax shifts. The appeal of the public collection of the publicly-generated rental value of land reflects its power. Not only a sprawl-buster, a land tax could also do the work of a pollution tax or an extraction tax.
A higher tax or fee upon land use would impel owners to put their sites to best use. To pay these “land dues,” owners of the most valuable sites, the ones closest to the center of the city, would draw any needed development, sparing the suburbs and farmland. By compacting towns and cutting drive times, the PTS reduces extraction and pollution upstream. As Confucius might have put it, to cut pollution, cut thru-put. To cut thru-put, cut demand. To cut demand, use land efficiently. To use land efficiently, reduce auto-infestation. To de-automobilize, densify cities. To densify, charge for holding land.
In the interview setting, participants took the time to hear out the explanations for the various tax shifts. In an actual campaign, voters, under bombardment from competing messages, wont take the time. In California, for each million dollars spent by the opposition, one percentage point of majority support will be lost (in a smaller state like Oregon, a million dollar negative ad campaign could shave off ten percentage points). Nevertheless, Schuchat announced that “our organization will probably drop the other tax shifts and try to put land value taxation on the ballot.”
Schuchat presented his findings in Seattle at Greening State Taxes, the first conference of its kind, co-sponsored by the Center for a Sustainable Economy in Washington, DC, and the Energy Outreach Center in Olympia, Washington. Besides grants from the usual green foundations, the symposium was also funded by the US EPA, Northwest Region. Government officials, including county assessors, almost outnumbered activists and academics. Balanced by veggie meals that were sumptuous and by a joyous Brazilian band at the reception, the gathering was attended by about 125 from the United States and Canada.
The events keynoter Friday morning was Alan Thein Durning, author of Tax Shift and founder of Northwest Environment Watch. Durning laid out how much revenue the various green shifts would raise. In the Pacific Northwest, a complete shift from income to pollution, from enterprise and sales to extraction, and from improvements to locations, could conservatively replace 86% of present taxes. The biggest chunk of that change, over one quarter of the total regional tax dollar, would be generated by land value taxation, “a subject I could discuss for hours,” Durning warned the audience.
The events Thursday morning keynoter was David Morris, Ph.D., founder of the Institute for Local Self-Reliance, author of Self-Reliant Cities which urged the collection of cable communication rent, and a regular columnist for The St. Paul Pioneer-Dispatch, the citys main daily. Morris was the initial force in Minnesota behind a drive which culminated in a green tax shift bill.
Carried by Rep. Ann Rust, who was one of four state representatives presenting at the conference, that bill would have lowered both property tax rates (it didnt make it out of the legislature). While a lower or zero rate on buildings rewards those who find homes appealing, a lower rate on land, on the other hand, rewards those who speculate in growing land values (witness the inflation of land costs in California, Massachusetts, and Michigan after capping or lowering their property taxes). Morris stated that he now “supports site value taxation.” Rep. Ann Rust and the activist co-authors of the bill, also panelists at Seattle, agreed to consider in the next legislative round a green tax shift bill that includes the PTS.
In conversations with other attendees, this reporter found only one person opposed to the PTS (and from liberal Madison, Wisconsin, yet!). All others were in agreement, or even enthusiastic. One of the new enthusiasts is active in the Oregon Environmental Council, the states oldest group which until recently had the current governor on its board.
The week after Seattle, the OEC hosted a meeting at Portland State University to ratchet up the states tax shift campaign. In attendance, besides the usual suspects, were also representatives of big business. Listed with the few other green tax shifts was the land tax. Topping the list of programs to fund with the collected rent, suggested OEC Executive Director Jeff Allen, “is not parks or schools but rebates.” Simply parcel out the collected rent on a per capita basis.
This inchoate coalition has a timeline: 1999, win a legislative study of the complete green tax shift package; 2000, educate and outreach to potential allies, the general public, and even potential opponents; 2001, lobby the legislature; if elected officials fail to shift taxes, in 2002 put the proposal on the ballot before all voters. Oregon always competes with California; perhaps the feedback from Oregon voters will top the California poll’s 56% figure.
Scott Anders of the Center for a Sustainable Economy and co-organizer of the conference told this promoter of the PTS that “youre preaching to the choir. Were all Georgists now.” However, I predict that Henry Georges land tax wont be won by ‘Georgists’ but by ‘greens.’
Jeffery Smith is president of the Geonomy Society.
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