The Menace of Land Speculation
|June 5, 2003||Posted by Staff under The Progress Report|
Bad Influences — Income Tax and Land Speculation
Production Knocked Down
Below is the text of a radio broadcast. Although the broadcast was not recent, has the situation changed?
The prosperity of the farming community is basic for the whole nation. If they do well, productively and financially, so do the rest of us. If they fare badly then the rest of us do likewise.
The needless paperwork of Taxation wastes countless hours that should be devoted to increasing both primary and secondary production. Income Tax reduces the very incentive to produce. Costs and prices are both inflated by taxes of every kind. Thus, despite lowered production, selling becomes more difficult and talk of depression becomes more real.
Underlining it all, is the fact that your individual right of property in the product of your labour is destroyed to the extent of the income tax levied. Direct tax at 100 percent would totally destroy individual property rights. Tax at lesser rates, even if indirect, is proportionately destructive.
While the community thus socialises your property and collects the product of your labour, it allows its own property, the ground rents that today are capitalized and known as land values, to be retained by private landholders. Because of this, speculation in land values occurs and farm land goes out of production.
Wherever you go in the country you see unused land. A few blocks, and certain areas, are very highly developed, but much is only partly used. Much is left entirely alone, and remains so, unless a newcomer is prepared to buy at a speculative price. And newcomers, hampered thus by a load of debt, are usually without the capital properly to equip their land. The consequence is an increasing trend towards diminished production on the best land.
Similar principles apply to city lands. Urban land, when occupied by derelict buildings, is as much out of production as is scrub-covered farm land. As land goes to higher and higher prices, genuine prosperity declines. Profit margins are narrowed by high interest or rent charges. Producers’ own “purchasing power” is constantly reduced. Thus land speculation allies itself with taxation to drag our nation [Australia in this case] into depression.
The only solution for low production, rising costs and falling markets lies in the policy of the Justice Party. This is best summarized by the slogans Ground Rent for Revenue and Abolish the Taxes. The first, as well as providing an abundant revenue for communal needs would end land speculation, and its attendant evil of idle productive lands. The second would end the tax process by which your private property, product of your labour, is taken from you and squandered.
The joint reforms, taken together, would encourage production, would restore to consumers their ability to purchase every article or service that could be produced. Under such policy the prosperity of the farming community and therefore the whole nation, would be thoroughly assured. This is the policy that will ensure permanent prosperity both for the farmers and for the rest of the community.
The reduced taxes promised by some politicians would do little but alleviate our short-term troubles in a small, temporary way, at great long-term cost. Price controls, as promised by others, would only make goods scarcer and worsen the average man’s position.
— W.H. Pitt
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