Tag Archives: tax

Charging for Land

If you owned all the money in the world, and I owned all the land... How much do you think I'd charge you for the first night's rent?

The [Land Value Tax] strikes at the heart of the land monopoly. In a powerful speech, Winston Churchill said, “Land monopoly is not the only monopoly, but it is by far the greatest of monopolies — it is a perpetual monopoly, and it is the mother of all other forms of monopoly.” It is the essence of feudalism and for all of our supposed social progress we’ve yet to be free from it. Unless and until the land monopoly is destroyed, the positive effects of virtually all economic reforms and even philanthropy is largely nullified.   (Edward Miller, “The Only Economic Reform Worth Talking About“)

The Only Economic Reform Worth Talking About is, according to Miller, a shift to a Land Value Tax (a kind-of straight tax on the land itself, regardless of “property improvements” – also known as natural rent).  Another way to think about this is not so much as a tax on land owners, but we the people charging rent for use of the commons.

It’s an interesting notion.  I’m trying to reconcile it with the notions I’ve expressed before about taxing the bad stuff rather than the good stuff.  So I’m wondering, is land ownership bad stuff to be taxed, or good stuff to be incentivized?

I’ve heard the proposition that the best way to protect land is to have it owned by someone in perpetuity and pass it to their descendants, so that they have an incentive to steward it in ways compatible with its long-term viability.  The Nature Conservancy does most of its work by purchasing land in order to protect it, and it does seem to work in this system.  But I’m far from convinced that it’s the only way to protect land, or even the best option.

[Sam: ]”That’s the kind of thinking that got Manhattan sold for a box of beads.”

[Coyote:] “So they still tell that story? It was one of my best tricks. They gave us many beads for that island. They didn’t know that you can’t own land.”

(Christopher Moore,  Coyote Blue )

I confess, I’m largely with Coyote on this issue.  The idea that anyone owns the land is ludicrous.  This generation is using it now, future generations will use it later, but my gut reaction is that the land, any land, should not be “owned”; as humans, we should take care of it, perhaps take responsibility for it, but in no way can we actually take it.

I’m a little more comfortable with rent than ownership, I suppose.  So, how would charging rent to any and all land tenants help the cause of sustainability?  Could this facilitate both greater equity among people and better stewardship of all the land and all its denizens (especially the non-human ones and the generations not yet born)?  Can we up the rent on those whose stewardship neglects these considerations?

In the money culture, will a Land Value Tax encourage care and protection of the living world while providing equitably for the people (present and future) who depend on it?

Could a carbon tax help solve our budget woes? | Grist

Could a carbon tax help solve our budget woes? | Grist.

Again, it’s time to start taking this seriously, as a potential solution for multiple problems.  See my previous post on Taxing Issues.

Two birds… one stone… and BOOM!  You have yummy dead birds.

Taxing Issues

This was originally posted on my old Apegrrl blog here: 5/14/03 Taxing Issues.  It seemed fitting to repost, just in time for Tax Day.  It’s unedited, save for the removal or repair of now-broken links (because I’m very over-taxed time-wise preparing for Cabrillo’s Earth Week  and I’ve always valued my time a lot more than most other things).

The Tax Code

Both the federal government and the California state government are in serious budget trouble. The trouble largely stems from the economic downturn, with lots of people unemployed or underemployed, especially in comparison to the boom years during the Clinton administration (felt particularly acutely in the vicinity of the Silicon Valley epicenter).

At the federal level, under the Bush regime, an enormous tax cut is planned. They claim this will stimulate job creation and increase revenues in the long run. Certain services (the ones the Republicans don’t like) will have to be cut, though of course military spending will have to grow so we can continue to bring our war on terrorism to the rest of the world. Yeah, right, whatever.

Here in my home state, Governor Davis says he’s going to have to increase taxes, in particular sales taxes, and cut some services. Frankly, this doesn’t sound a whole lot better. Sales taxes have always been regressive – they put a much heavier burden on the unemployed and the paycheck-to-paycheck working poor than they do on the upper-middle and wealthy classes.

But there are other ways to go about it, ways that bring both short-term and long-term benefits to the widest expanse of the population. Changing the way we use taxes, and the economic signals communicated by taxes and costs, could be the best way to turn things around. It may seem a little inconvenient and awkward at first, but it could be the tipping point that rescues our civilization. Here’s how:

First, stop taxing things that are good. By this, I mean cut back or eliminate taxes on income (at least, the first $20K per person should always be tax-free). Don’t tax employers for payrolls – they should be encouraged to hire more people at whatever level, use human-power instead of mechanical/industrial processes wherever reasonable. And, as oddly-Republican as it sounds coming from me, maybe we should even reduce taxes on investment and savings (if, as claimed, these do stimulate the economy, particularly technological innovation).

Second, increase tax breaks, credits and other assistance for doing things better.There should be huge tax incentives for things like on-site, renewable power generation (solar, wind, biomass). Consumers should get bigger tax breaks (and perhaps government-sponsored, low-or-no-interest loans) for installing solar or wind systems, better windows and insulation, skylights, etc.… and for trading-in gas guzzlers for vehicles with much higher fuel efficiency.

Third, tax the bad stuff. This is where public revenue should be generated. Problem activities that reduce public quality of life now or in future generations should be taxed, not only to cover the costs of the damage they do, but also to provide for the public services we want from government (education, health care, social security, public infrastructure, etc.).

There should be huge taxes on polluters (from “accidental” stuff like oil spills to day-to-day power-plant emissions). Anything that harms air, water or soil, anything that threatens public health or healthy ecosystems, is going to cost us all in the long run (this goes more-than-double for nuclear waste, since its toxic effects can last so much longer). We need to build in ways to pay for repairing that damage now, and tremendously increase the disincentive to pollute. Some of the revenue from polluter taxes will obviously have to go to hiring more research, monitoring and enforcement staff, not to mention developing better monitoring and pollution-control technology. Voila, job creation!

Stop subsidizing the wrong stuff. Right now, government gives big tax breaks to companies that buy machinery to replace human labor. It actively subsidizes exploratory mining and drilling, not to mention the hidden “subsidy” of national defense spending to protect our overseas resource-extraction interests. The federal government charges ridiculously low fees (well below market value) for mining, logging and grazing on public lands. Taxpayers pay for aqueducts and dams that divert water from fragile ecosystems, and huge factories and industrial farms get most of the benefit. We the taxpayers prop up failing airlines, in spite of the fact that air travel currently uses far more fuel per mile than other travel options.

Tax Resource Extraction. Anything that is nonrenewable, or wherever the extraction rate exceeds the renewal rate, should incur huge taxes. So, for instance, metal and fossil fuel extraction suddenly become very expensive (not only for domestic companies to do it, but also to import resources extracted from other countries). Large-scale timber harvesting, overfishing and overgrazing should likewise be very expensive propositions. Aquifer depletion becomes far more expensive than investments in water conservation for factories, farms and households.

Waste should be taxed, not only from big corporations, but collection from small companies and households as well. Companies and people need to learn to stop throwing things away because, really, there is no such place as “away.” What this will mean is that companies need to find more efficient ways of producing their products, or else they need to find markets for their “waste” (and given the big taxes on resource extraction for most raw materials, there are likely to be markets for lots of things that were once “cheaper and easier” to get from nature).

Taxes on consumer waste (again, combined with the increased expense of raw materials) will mean that consumer habits are likely to change. Consumer demand will drop for “disposable” items, for over-packaged goods, and for things that are not built to last. They will preferentially chose items with guaranteed “take-back” or repair and upgrade services, whether it be re-useable milk bottles or reclaimed computers, because they will quickly realize that these products are actually less expensive. Again, there is a built-in job creation benefit. Companies will have to staff recycling centers for their products. Reductions in disposable packaging will necessitate more careful shipping and handling and therefore more human control over these processes. Retailers will have to hire more sales or security personnel to monitor potential shoplifting, because bulky packaging will no longer be a cost-effective way to deal with theft. Skilled repair workers will be in high demand to keep electronics, appliances, furniture and even clothing in good working condition, because it should always cost less to repair something than to throw it away and buy a new one.

Unnecessary transportation should be taxed, especially the kind that puts lots of individuals alone in cars on freeways. Taxes on cars, taxes on fuel, taxes or fees for parking are all good ways to discourage the solo, rush hour commute – reducing the harm from all that fossil fuel use, and reducing the public demand for freeway expansion and road repair. This will simultaneously increase the need for mass-transit options, not only on the scale of light-rail service and bus networks, but also more flexible short-distance options, like bike-rickshaws in shopping districts (see my downtown Santa Cruz plan) and door-to-door taxi-vans for people outside urban areas.

There should be big taxes on developers who convert greenbelts to sprawling housing developments, encouraging people to settle farther away from job opportunities and markets (and big tax breaks for those who build livable, mixed commercial and residential units in urban lots), and additional property taxes for people who buy out in the sprawl zone. Likewise, taxes can discourage large employers from locating too far from residential centers and failing to provide transportation services for their employees (vanpools are easy if everyone is going to the same place). Again, this could actually increase employment in the transportation sector, particularly for professional drivers.

Such taxes will also make long-distance transportation of goods more expensive, encouraging people to buy local products. Small-scale local farms will become more lucrative compared to huge, distant agribusiness. Since economies-of-scale won’t count for as much, the diversity of local production will increase, leading to products that are better suited for local conditions.

The nature of long-distance travel would change as we stop subsidizing expensive and wasteful airlines and airport expansions, and focus instead on increasing the efficiency, speed and reliability of rail and sea travel (and/or developing new and more efficient air travel innovations).

Overpopulation should be taxed. Tax breaks for middle and low-income families to support a first, and perhaps a second child are reasonable (particularly for lower-income families), but people should incur tax penalties for having any more kids than that. Sure, population growth in the US is much lower than in most developing countries, but considering how much more a US citizen is likely to use as a proportion of global resources, we need to stop growing and perhaps start shrinking our population if we want to maintain such a high standard of living. Our economic setup already provides some disincentives for too-large families, but those who have more than two kids should be penalized by the tax code.

Of course, this is only fair if there are plenty of options for preventing unwanted births, including easily accessible and free or affordable contraception (including morning-after pills) and options for early termination of unintended pregnancies (including Mifepristone/RU486 and other non-surgical or surgical techniques, especially in the first trimester). Also, public health money and research funds should not be invested in increasing fertility options. While the rich few may continue to pay exorbitant amounts to overcome fertility problems (IVF and the like), public money should go only to encourage childbirth prevention (and adoption or foster parenting for infertile people who want families).

Taxes and fees instead of prison for vices. Here’s where we can get a lot of public revenue, instead of our current, wasteful public spending practices. Where possible, we could legalize, monitor and tax things like personal drug use and prostitution. Where impossible (even I realize that the Bible Belt won’t accept this overnight), change the punishment from incarceration to fines. Certainly, simple possession or cultivation of marijuana should only be punished by fines (this is already the largest cash crop in California, and right now the state is losing instead of gaining money because of it). The cost to incarcerate nonviolent offenders is huge, especially when instead we could be earning government revenue from their behavior. Wage garnishment should be an option for those who can’t pay immediately. With the savings from reduced incarceration, we could easily provide public-works jobs for those who can’t find other employment to cover their fines, plus monitoring and addiction treatment for those who want or need it, reaping additional civic benefits.

{Updates: You can just imagine how annoyed I am by the recent tax cut package.  Interestingly, the thing that sparked the most ire in the media was the 11th hour removal of the tax credit for children that had previously been included. I must concur that this was dastardly in its level of dishonesty. What I would prefer, instead of the “per child” tax credit as proposed, would be a much larger tax credit (say $1000) for those middle and low income families who have one or two children (and maybe even a little credit for those who have none), then a reduced credit if they have a third child, and none for families of four or more. Perhaps, to be fair, we should “grandfather” in existing large families, provided they don’t have any new offspring after the first year the credit would go into effect. The logistics will of course get tricky for split/recombined families, and you wouldn’t want to penalize anyone who adopts and therefore has a larger family, but there must be some way to cope with all that.

On 5 June 03, an article on “Green Taxes” by C. Morris appeared on AlterNet.org}