3 More Media Voices Champion Smart Taxation
|January 22, 2014||Posted by Staff under Uncategorized|
These three excerpts are from: (1) P2P Foundation, 2014 Jan 14, on history by Pat Conaty; (2) Next City, 2013 Aug 5, on cities by Bill Bradley; and (3) Toronto Star letters, 2014 Jan 19, on jobs by Frank de Jong, President, Earthsharing Canada.
Land as a Commons in the Cooperative Tradition
Land became a growing political issue in the 16th and 17th centuries in the face of the first major wave of enclosures. Gerard Winstanley and the Diggers were early prophets of democratic land ownership in the mid 17th century. Their efforts were defeated and the loss of the commons intensified in the late 18th century as thousands of parliamentary acts of enclosure gathered pace.
In 1775 Thomas Spence, the son of a shoemaker from Newcastle-upon-Tyne, proposed a practical solution in a pamphlet: ‘Property in Land, Every One’s Right’. Spence argued that local parishes should own all land democratically and that rents collected should be used first to provide support for those unable to work and second to be shared to meet the needs of children and local residents equally. Spence called his solution the Parish Land Trust and this reform became known in the nineteenth century as Spence’s Plan. Both advocacy and pioneering spread and inspired other land reform thinkers like Thomas Paine.
American land reformer Henry George was active in the co-operative movement and he had a huge following in Great Britain and Ireland. His proposal for land taxation through a Single Tax was aimed at encouraging the steady and peaceful transfer of private land ownership for securing the substantial economic benefit and social security of the vast majority of households and businesses.
All these precedents gave Ebenezer Howard the confidence to develop the Garden City model and with important support from those active in the co-operative movement to develop Letchworth and Welwyn Garden Cities.
Six years after the founding of Letchworth Garden City, Lloyd George as Chancellor with the active backing of Winston Churchill as trade minister introduced the famous People’s Budget of 1909 that included a land value tax inspired by Henry George and set at 20% on any increases in value when land changed hands. This attempt by a Government to distribute “rents” to the people led to a twelve-month battle in Parliament. In April 1910 the land tax was dropped after the first House of Lords veto of a Government budget in two hundred years.
Why Don’t More Cities Tax Based on Value of Land Rather Than What You Put On It?
The Center for an Urban Future and NYU’s Wagner Innovation Lab released a report last month for the next mayor of New York City, “Innovation and the City”. Its Part II look at the split-rate property tax.
The majority of U.S. cities apply a singular property tax rate to both the land and the buildings. In several Pennsylvania cities, including Harrisburg, the land is taxed higher than improvements on the actual buildings. So developers can’t simply sit on land, unless they want to foot the bill for the taxes. The lower tax rate on improvements has incentivized more density.
Milton Friedman, free-market proponent, conceded that “the least bad tax is the property tax on the unimproved value of land.” I’d like to see other municipalities, especially the depopulated urban cores of cities (looking at you, Detroit), take a long, hard look at this tax rate. Dan Gilbert is sitting on so many properties in downtown Detroit right now it’s hard to keep track.
Same Old, Same Old, on Jobs
The best way for finance minister Jim Flaherty to reverse Canada’s disastrous de-industrialization is to stop taxing jobs, businesses, and sales. We tax cigarettes and alcohol to discourages their use, so it follows that income taxes are a tax on employment while sales taxes make products less affordable for many, translating into fewer local manufacturing jobs.
To address this job-killing double whammy, the federal government should shift taxation off of the productive economy and on to the non-productive economy. Most taxes should be on the use and abuse of nature, which would result in a double bonus of creating jobs plus conserving resources for future generations.
For example, Canada should collect the economic rent of oil, a policy that has effectively made all the citizens of Norway into millionaires, without discouraging their oil industry. Contrast this with Canada, where oil companies are allowed to pocket most oil super profits, putting Canadians, collectively, deeply in debt and out of work.
Ed. Notes: Some good writers have said it all, or, at least all that can be said about smart taxation in a small space.