How Taxes can/do effect local economy.

Session #2 1:00-2:30
Convener: Laine Harris
Participants: 3 Eliezer Lee Cruz, Jonathan Parizer and ??

I (Laine) wanted to introduce the concept of "Single Tax" as a useful and necessary component to the transformation of the economy (Local and global).

The "Single Tax" is/was an idea formulated by a man named Henry George in the late 1800's. A simplified way of looking at the concept is looking at economy trough the filter of "to the creator goes that which is created", in particular looking at the creation and distribution of value.

Another basic filter/principle to look at taxes from is; all taxes are a disincentive to whatever is being taxed.

Currently people work on resource available to them creating value as they do. People do not live in a vacuum and tend to congregate in community which creates legitimate community needs. Currently we mutually agree to rob each other one and and another to collect the resources needed to meet those needs. This take the form of various taxes, most of which are impediments to production and commerce. However there is a value created by the community. This value is the sight value of land and the mineral resources in and of the earth such as oil in the ground, air in the sky, water in the ground, etc. These resources I'll simply refer to as "Land".

Currently we allow individuals the special privilege of collecting that community created value as "Land Owners". No individual EVER created ANY land value. Land value is ONLY created by and through community.

The concept of "Single Tax" is that the value of the "Land" will meet the legitimate needs created by the community and should be collected and used by and for the community. This shift in thinking can and will have enormous ramifications.

Shifting all the taxes from collective community robbery/thief to collecting the value created by the community will take all the profit out of speculation. It will not be economically sustainable to hold resources out of use and the resources used will tend to be used to their maximum value. It will also take away the one place the people can currently park economic resources without maintenance or attention. Right now the only place someone can store any large amount of wealth is to "invest" in land resource. They will only and always increase in value as long as we continue to create more people. This value will in crease independent of anything the individual does or doesn't do. It is, by far, the single biggest way the rich get richer. This can be through out right land ownership or through land control such as mortgages.

Implementing a shift from property/income/business taxes to a land base tax will free resources for people to work on and create as well as encourage the best most efficient use of those resources and it will tend to put the economic resources currently "invested" in some form of "land" speculation into production/jobs/and real investments.

This has been implemented in a number of places, usually on a very limited and small scale and in each and every instance there has be a correlate improvement in the local economy. There are examples of this in New Zealand, South Africa, and more locally in Pennsylvania. A key element of the Renaissance of Pittsburgh was a shift in the local tax from property to land. These tax shifts are generally revenue neutral but shift the tax burden from the "improvements" on the land to the site, "Land" value.

Here in CT there has been some legislation (the details of which I am not completely clear on) that allows for some level of township/city-hood to implement a "two rate" system in which the municipalities can separate the land value from the property value and tax them at different rates.

While "Single Tax" is not a "Silver Bullet" without it any and all other useful changes will, eventually be absorbed into rent and our community needs will continue to grow as long as the population continues to increase and natural resource (read oil?) are depleted and we will have to continue to collectively steal from each other value we have created in the form of one kind of tax or another to meet those community needs.

This can also have huge implications for the "ecology" conversations. If corporations had to pay the actual retail cost of the "Land" resources they used much of our ecological ills would be addressed over night. For example, if a coal powered generation plant actually had to pay the retail value of the air and water is used we would start to realize the true cost of coal power and the alternatives to that would immediately be recognized as less expensive and therefore more desirable. Shoreline/coastal real estate development would be prohibitively expensive. If the owner of a desirable beach front property had to pay the true economic site rental value that the collective community creates by their collective desire/value the community places on such a resource they would either a. not build on the resource and leave it for the community or b. they would be paying the very high value the community places on the resource and therefore the community, as a whole, is compensated for the loss/degradation of the resource.

This is a very rich and deep conversation and my intent here is to "open the ball" and start the conversation.

Disclaimer/background, I, Laine, was born in Fairhope Al as a 4th generation "Georgist". My great grandfather and grandfather were part of the founding of the city of Fairhope which was an intentional community formed to demonstrate the principles of Single Tax. Fairhope which is still often listed as one of the most desirable places to live has so diluted and abandoned the actual principles of "Single Tax" that now it is, at best a hollow shell of principles.

S good source for background and links

A good article on the implementation written by Steven Cord, a person who has dedicated most of his life to this conversation and help implement a "two rate shift" in many areas.

The web site for the "Center for the Study of Economics"

You may find a ton of information by googling;
"Single Tax"
"Henry George"
"Two rate tax"
"incentive taxation"
"Georgist" or "Georgism"
and, of course you may contact me to continue and expand the conversation.

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