JEFF SMITH MADE GEONOMIST PRESENTATION
AT
WHO OWNS AMERICA? EVENT
Jeff Smith, Portland, OR, was one of the presenters
on a panel on Property Rights on June 4, 1998, in Madison,
WI. The Who Owns America? II event was cohosted by North
American Program, Land Tenure Center, U.W.-Madison and
Lincoln Institute of Land Policy, Cambridge, Mass.
U.W.-Madison Prof. Jane Larson moderated the panel,
on which Ben Brown of the John Marshall Law School and
Kenneth Barden of Dayton, OH also made presentations.
Introduced as president of the Geonomy Society and
editor of the Geonomist Journal, Jeff Smith's comments were
entitled, "Share Rent, Transform Society." Major points
covered are as follows.
If society decided to share among its members all the
annual value of society's sites and resources and air
space, what would happen?
If someone buys a ticket to Super Bowl and decides
not to go and sells it for more than its face value, he
could face the wrath of the law. If he bought a super
location and sold it for more than he paid for it, he could
become a pillar of society. Temporary ownership for
profiteering is illegal; but if permanent ownership, it is
legal. If only we had a single standard, I think society
would change for better. It doesn't matter who owns what.
What matters is who gets the rent. We have millions of
acres of forest we Americans own together, and we are
losing rent on it.
The word property cannot convey the distinction
between rent and land. Ralph Borsodi came up with an
alternative, a trust that would claim publicly and occupy
privately and use sparingly and compensate neighborly.
Share the rent with neighbors. A word for that is
geonomics, earth focused economics. It hones in on all
this flow of rent that is so overlooked. Shift the focus
to sharing; then owning of land loses importance and
belonging to earth regains its importance. It is a
different identity for human beings as parts of the
economic system.
The amount of rent has to total some amount. If you
ask how much taxes are, you get a figure, or how much wages
or interest are, you could get a figure. No one does a
good job of keeping track of how much we spend or how much
nature we use. In some of the best estimates, Ronald Banks
in England estimates that the flow of rent is as great if
not more than any of those other flows. Assuming that is
true, if not allowed to collect in the wrong pockets, but
redirected to everybody's pockets, we can expect a
solution. How would you do it? You could collect it via
service tax, extractive tax, user fees; there are many
different ways to collect. You can return it to the
residents of the region, through subsidies or dividends.
Alaska has an oil dividend to citizens, and different kinds
of taxes exist everywhere. It is a matter of disbursement.
If you were to choose the Libertarian version, and
rely on fees and dividends, you get a geobonus, an added
benefit. You would quit distorting prices, you could pull
government back in a sense. Now taxes and subsidies at
the margin can make housing unaffordable to maintain, so
the apartment owner lets his apartment building become
dilapidated and causes nearby owners to do the same. He
can breed a slum.
We subsidize water and make water cheap for farmers
in Arizona to irrigate their land, and we then have taxes
to pay for environmental absurdities. Shift to fees and
dividends and have prices precise and use the weight of
the market to guide our choices toward sustainability. If
we had this price leveling, we could get the market to work
right.
There are four reasons this could be fair. In
history three times when land tax was applied on increased
value, it also increased land ownership, and tenure was
extended. Last century in Denmark, land taxes were
increased. In the 1890s in California irrigation
districts, they went from a few ranches to many small
farms. In the 1950s a land tax in Taiwan broke up huge
plantations and resulted in many family farms.
In the past, land owners owed services to king, but
in this age of equality then we owe our neighbors. We have
an equal right to the earth.
The community creates rent. Land value rises when
infrastructure goes on land. Technology progresses when
the community becomes more tranquil and density goes up.
Density is a really good measure of land value. No one
owner by himself is responsible for density. Rent from
land value is justified because all should share in the
rent.
If the community collected the rent, it would
motivate owners not to speculate in anticipation of a
higher future return. There would be a tendency to infill
in the city and make cities more efficient. It would make
mass transit more efficient. We could collect some rent in
a greater amount as ecological security deposits for gas
stations with gas pump brownfields. We could actually put
a surcharge on gasoline and put the playing field back to
level between cars and other transportation. If we
collected ground rent around transit stops and dedicated
that income stream to the transit system, we could run a
free system. When built, BART (Bay Area CA Rapid Transit)
did a study and found it could run BART free. If we had
free mass transit, people would choose to ride instead of
drive. It becomes more efficient and more people use,
increasing the mobility of citizens in the region. If we
get people out of cars, that reduces air pollution,
noises, run off, and use of resources.
It is not just collecting ground rent but also
untaxing other systems. Untax labor and make it more
affordable. Enterprises such as recycling and
reforestation, weatherization, reconstruction, and health
enterprises are labor intensive and made more expensive
artificially by taxing labor. We subsidize business: free
roads for the timber industry, cheap water for
agribusiness. Stop those subsidies and recycling could
compete.
On a level field, recycling would roll over
extraction of virgin material. We could spare forests and
salmon and have a healthier eco system. Look at
restoration. Money has to come from the public treasury
but we could look at it as public investment. Pay for
restoration and land values increase, so land dividends
would increase. Direct investment benefits the entire
public. Now the public is paying for private parties.
That is not fair. Look at the economy. Take taxes off
homes, and they become more affordable. Have some kind of
land charge, and housing stock increases as sites get
developed. Affordable housing helps stabilize
neighborhoods. In places that do have the land tax, i.e.,
Australia and New Zealand, they have fewer disputes with
assessment. Assessors say their job is so much easier now.
If land is less profitable and less of a political
football, it is less tense in local politics.
If you take taxes off labor and capital, more
investment flows into jobs, and we would have close to full
employment, so labor could demand full market value for
services. We could double the income of the average worker
with no loss in standard of living. If fewer demands are
placed on government by citizens, it doesn't have to borrow
so much. If you reduce the amount of tax on the economy,
and reduce the amount of redeemable notes, then we should
be able to eliminate inflation. It is unmasked. You can
see lower prices; the cost of living goes down. It will
change social relationships. Labor and capital make up,
with higher wages for labor, lower taxes for capital, and
more investment funds. Labor can negotiate from a position
of strength. Capital might want to share management
decisions and spread that risk of liability to workers. It
tends to reduce hierarchy and increase equality in society.
What other social relations might change? Increase
land ownership participation in community and it benefits
community, with town hall meetings and block parties.
Those kinds of communities have less crime. Pittsburgh has
six times greater land tax than improvements, more
affordable housing, and less crime.
The main indicator of economic health is called the
GDP. A good measure would be leisure, the amount of time
off from labor to maintain a comfortable standard of
living. If we shift, it would shrink the work week, and
help get rid of rush hour traffic.
The green tax would reduce the role of economics in
politics.
|