Interview with President of Common Ground-NYC
|March 27, 2014||Posted by Scott Baker under Editorials|
Eric Lima is a reporter for Baycurrents.net, an independent newspaper focusing on oceanfront Brooklyn, New York, including Sheepshead Bay, Brighton Beach, and Coney Island. The newspaper is published bi-weekly by Brooklyn Media. It has a readership of about 30,000. Its interactive website, www.baycurrents.net, is continually attracting more visits. Lima interviewed Scott Baker, president of Common Ground-NYC in the Spring of 2011, but the interview was never published in Baycurrents or elsewhere, until now. Herein is a slightly updated version of that interview.
EL : One way to battle climate chaos and the contamination of vital resources is to demand full restitution from polluters by charging an eco-tax. Scott Baker, Novelist and President of Common Ground NYC, discusses in this interview how applying Georgist economic theory is good for the environment. Baker and the NYC Chapter of Common Ground, are a Georgist single tax organization looking to charge for the use and locational value of natural resources and untaxed production in NYC.
Since 1932, the Henry George Institute for Social Science in NYC has taught Georgist economic philiosophy. Henry George was an American writer and political economist who preached that economics could be applied scientifically through a single tax system in his book Progress and Poverty published in 1879. His book was an instant success in Europe and America and is an economics bestseller to this day. In 1886, he ran for mayor of NYC coming in second, and ran again in 1897, but died of a heart attack four days before the election. Henry George is buried at Green-Wood cemetery in Brooklyn.
After his death, institutes were created in the US and Europe teaching his economic theory. Several communities in countries like Hong Kong, Taiwan, Australia, South Africa, South Korea and Altoona, Pennsylvania, here in the United States, now pay only a single tax for the land they occupy, which pays all the community’s bills, and excludes all other taxes such as wages or sales taxes. Some consider George’s Land Value Tax an Eco-tax because it discourages waste.
Columbia University Professor Joseph Stiglitz has praised Georgism saying: “And using natural resource extraction and using land rents as the basis of taxation is an argument that I think makes an awful lot of sense…”
In this interview Baker talks about energy sources, their environmental impacts and how a Georgist tax on land can save our ecosystems.
EL: How does your organizations concept of the “Commons” prevent harmful environmental effects like Fracking, or drilling from taking place in NYC?
SB: Well, our organization’s mission is Tax reform along Georgist lines, but we do believe that the Commons – which includes our water – need to be protected against pollution, or else it will not be available for everyone. Further, in the case of fracking, which uses millions of gallons of fresh water, whatever water is used cannot be used in life-vital functions like drinking or bathing or sanitation. So we would want to charge a high rent for the use of water and its spoilage. At some point, we would say “No” to a process which imperils the drinking supply for 90% of the metropolitan region’s water supply (i.e. the Catskills reservoir).
EL: Can you explain the concept of the “Commons”?
SB: The Commons are what we use in common, literally air, water, land itself, all of these things were created by nature, not by man, so we own them all equally in common. We say everybody has a right to those things. If you use a prime area of land for example, then you should pay for that privilege. Now if you have a productive factory or a building which has a lot of rich tenants then you draw enough money and you can pay for that prime location, but that payment (land tax) should not go to a landlord because he did not create the location, that should kick in and go back to the community. So, the Commons are things that we all share in common and we all have a right to equally.
EL: What is the connection between the concept of the “Commons” and a Bill of Rights for nature?
SB: Anybody who pollutes the air, water or land is polluting the Commons and we should charge for those externalities. A twisted legal theory says that people not polluting should pay the cost of keeping something clean. We say you have a right to clean water, air and land, and anybody who takes that away should pay, and if they take it away too much, they shouldn’t be allowed to do that at all. You shouldn’t be able to poison the earth to the point you can’t breathe or it’s making you sick. Period! That’s poisoning the Commons and poisoning the other people who have a right to clean air.
EL: Does nature have rights?
SB: Do species have rights of their own, or do they have them only because we need them? We’re all part of nature and we have rights, therefore nature itself has to have rights as well by extension. How many rights does nature have that we believe we have? We have to eat and kill to survive. Nevertheless, nature has to live as well. If we just dilute the planet we’re in essence saying only we have a right to survive and nothing else.
EL: Where does your organization’s philosophy originate?
SB: We get our philosophy from Henry George back 132 years ago when he wrote Progress & Poverty. He was the first to coherently organize (and greatly expand upon) the Physiocratic system that land and location have a value. He put (his theory) into a book called Progress and Poverty, which is still the bestselling economics book of all-time. And we put it into practice by promoting various bills that emphasize taking location rent and returning it to the community and un-taxing productive activities such as wages, capital and sales because those are the things that people produce and people have a right to what they produce. So we believe the rent which comes from the community because the number of people and the amenities, commerce and all the hustle that goes on in the city, in fact, belongs to the community. We take that back instead of it going into private hands, so people can produce things. They can build buildings, make cars, they can do all of these things which require labor acting upon the land to create things that satisfy human desires. If we do that, people can produce whatever they want. They won’t be discouraged by taxes. They’ll collect the land rent, which we call land value tax, and return it to the community, for the benefit of the community.
EL: What do you mean you’re taking the rent which comes from the community out of private hands; you mean you’re taking land tax?
SB: We believe in the complete legal right to private property. What we’re talking about is an economic right. It’s an economic right to return to the people that which the people created. If you think about it this way: if a building is in NYC it has one value, if you move that exact building to the middle of Wyoming or Alaska then it has a much lesser value, and the only difference is not the building, but the location. So the location is not something the builder or the landlord produced, it’s from the community itself and all the enhancements that come from living in a bustling urban community. So that location value really belongs to the community. We’re not taking it away; we’re returning it to the community that deserves to have it in the first place.
EL: And how are you returning that value back to the community?
SB: We would take the private collection of rent on the land itself, only the land; not the building and we would return that back to the community.
EL: New York City has some of the highest rents in the country, how are you going to tax the land without taxing the building?
SB: The value of the land is inelastic because people are already being charged as much as they can bear, that’s the market forces. All we’re saying is to reallocate what’s being charged for the land part of it back to the community. Let the landlord keep whatever he makes in his building, and the upkeep, and his maintenance, and improvements of the building. Now what happens in practice when you charge more in land value taxes is the land value price has to go down. So as taxes go up, the price of land goes down, then the land becomes cheaper to buy and more expensive to rent. That would be enough money to run everything the government runs. If we really took all the resource rent (land tax) back for the community, we’d even have some left over for a citizens’ dividend, which should be an inherent right of all human beings.
EL: How does your organization plan on implementing this?
SB: We have four local bills, one of which passed. They basically would inventory and then tax vacant land at a higher rate to encourage developers and owners to develop the land, instead of hoarding it and speculating, hoping the price would go up. We tax that and the price goes down, therefore the developer has an incentive to develop it or do something, rather than pay the tax or to sell it to someone who can. More broadly, we’d like to do something on a national level which would probably be similar to the Articles of Confederation Number (8), which was actually a property tax, except we wouldn’t tax the building. We would only tax the land. That was the original way the founders sought to pay for government services, but it turned out that the property owners, which were most of the founders, decided they didn’t want to pay the tax that other people weren’t paying. Now we have a different situation because everybody either pays rent or owns property, so they can do this on a more equitable basis. We don’t have these vast land owners far and few between.
EL: What about a country like China which has many problems with pollution?
SB: They’re not being charged for their externalities, we would charge them for that. We wouldn’t charge them for their production, in a sense they could produce more efficiently and produce with less pollution. We don’t want to stop them from producing, we like electricity, we like steel, but we don’t like the pollution. Let’s tax the bad things and not the good things.
EL: What would be the consequences of “not” passing a law of the Commons and letting everyone pollute without paying for damage?
SB: I think we see it already because China is choking on pollution. They have to turn to desalination to get water from the ocean. They can’t drink their own rivers and streams. Their air is estimated to take 10 years off the life of each urban dweller. It’s leading to disease and this is an economic cost, as well as a violation of human rights. If people and factory owners paid enough there would be incentives to do something. Some say it’s a job killer, but it’s actually a people saver and an economic saver. New industries will come up, new improvements that will save people’s lives and save money. So electricity, steel, and buildings and so forth”we won’t tax, but pollution we’re going to tax. We’re not going to let you foul the earth. We’ve been treating the earth as if it’s unlimited and it’s not unlimited. There are about 7 billion people on this planet and not only is the population rising, but our resource use is rising geometrically at a much faster rate. Last week the UN projected 10.1 billion people are going to be on the earth by the end of this century and that an area the size of Russia will have to be cultivated just to feed us, it’s questionable if that’s possible to do.
EL: Can you give examples of some pollution externalities?
SB: There are several recent disasters. In Tennessee the coal ponds, these giant slurry ponds that keep all the coal ash, burst out and basically wiped out a neighborhood. This is a danger and we have to make stronger ponds and we have to recycle that ash, which is possible to do, or else those people will have to pay so much to keep that stored that it makes it uneconomical for a coal plan to do that.
EL: How about in NYC?
SB: Well there is a lot of pollution from the cars, and there are high asthma rates. This comes from all the trucks, especially in the poorer neighborhoods.
EL: And how would Common Ground-NYC fix this?
SB: We’re in favor of congestion pricing. We believe in charging the cars coming into the city at the most congested times. Also Meter side parking, so parking spots go up as they are more in demand, and we would charge for pollution controls.
EL: What would you do if you were (re)elected?
SB: We support the phasing in of a single tax which means charging for location and resource values, and un-taxing people’s productivity. For one thing that would simplify the tax code immensely; it would also take away the corrupting influences because you wouldn’t have all these loophole hunting lawyers, accountants and lobbyists. It would be much easier to asses the land, and assess the pollution.
EL: Has that been implemented somewhere else in the US?
SB: We just had it in Altoona, Pennsylvania.
EL: And how has it worked?
SB: It’s driving up the value of the land, because people now have an opportunity to develop things and build buildings without being penalized for developments or improvements, so Altoona as compared to another city like Johnstown, is thriving. Johnstown is not thriving, it’s going under. (Now, critics might rightly claim that we Altoona is not charging enough rent on the land to offset the increased value — that is why the price is going up, despite the land value tax, or “rent”. This needs to be addressed by ongoing assessments that are honest and current.)
EL: How are people being charged for improvements under our current system?
SB: You have a mixed system where you tax everything. You tax the buildings, which discourages building. You tax the land, which may encourage land use but it’s all mixed together. The better the building is”the more you tax that building, so you’re discouraging the best improvements possible. In NYC you have vacant parking lots or buildings that are maybe one story occupied and four stories vacant, that pay very little property tax. There’s no incentive to use those buildings, and there are people homeless who can’t pay those rents. We had a situation on 26th street and Park Ave. where a parking lot was paying one-tenth the property tax of the building next door – a 17-story building. They finally sold that parking lot because the owner got his price. But for years he was paying a tiny property tax and able to pay that just from the activity of the parking lot.
EL: Aren’t there tax incentives for improvements on buildings?
SB: Yeah, the problem is you give the tax incentive to the developer of the property, instead of the rental value of the land going back to the community. So what happens? You’ve already taken away revenue from the city by giving the breaks to the developer, so now you have to make it up somewhere else and that means traditionally taxing the productive activity of the middle class or cutting down on services to the poor. (It is also a subsidy to the developer, which drives the price up not down, making it harder for non-subsidized developers to compete, and lessening the opportunity for everyone. This is exactly the opposite of what we want and what Common Ground proposes.)
EL: In laymen’s terms, what is the productive activity that they’re taxing?
SB: All the things people earn. We tax wages. People pay more, longer into the year. It may take until June to earn enough to pay their taxes. We don’t want to tax wages at all. We don’t want to tax sales. We don’t want to tax actual capital, by capital I mean cars, factories and buildings, actual tangible things; not stocks or bonds, those are forms of money and speculation we think should be taxed. Money is not real wealth. Wealth is tangible things that satisfy human desires that are made from the resources of the earth.
EL: If someone wants to learn more about your organization, what can they do?
SB: They can go on to our website Commongroundnyc.org. Keep an eye out for our meetings. We try to work and get these types of measures passed. (We do other things to raise awareness, for example, we recently sponsored a panel with Dr. Michael Hudson, Dave Kelley — adviser to Dennis Kucinich, and Georgists and Henry George School teacher, Andy Mazzone and Common Ground member Dr. Cay Hehner. To understand our philosophy better,) read George’s Progress and Poverty and come to the Henry George School and take a 10-week course on economics for free, and understand how the single tax works.
EL: Do you have any final thoughts?
SB: We are biased towards our planet, and towards our planet with a certain set of conditions which geologically and over the course of eons is neither guaranteed nor consistent. In the past, and without our interventions, the Earth has been a frozen ice-ball. It has also been so warm that dinosaurs swam in the unfrozen Arctic Ocean. Both were natural. Neither is conducive to civilization as we know it. (We need to encourage conditions which are conducive to human civilization as much as possible, since we now have the power, whether we like it or not, to influence global climate. Georgism is the only fair way to do so).
EL: Thank You Scott Baker, Novelist and President of Common Ground NYC.
Interviewed by Eric Lima, Spring, 2011; updated by Scott Baker 4/11/12
Originally published in Opednews: http://www.opednews.com/Diary/Interview-with-President-o-by-Scott-Baker-120412-486.html and GroundSwell, the newsletter of Common Ground-USA