“If land value is taxed, the land will not flee, shrink or hide.”
– Fred Foldvary, San Jose State University
|When you've paid your rent, you've paid your taxes.
"If governments would collect their necessary revenue in the form
of site rents, resource rents, monopoly rents and licence rents
—all of which, by reason of their origin, accrue preferentially
to the rich—they would not find it necessary
to impose 'progressive' taxes
on earned income."
– Dr Gavin Putland, Director, Land Values Research Group
"If you don't tax that value that attaches to land, arising from the general wealth of the economy, the banks get it."
– Professor Michael Hudson
"If you wanted to reduce the unpopularity of the property tax,
the way to do it would simply be to provide for an effective method whereby it could be withheld at source, in small payments and that would eliminate a large part of the objection to it."
– Milton Friedman
|Why do we pay DOUBLE?
– 1. bank mortgage for access to land plus interest rates up to triple property value.
– 2. taxes to fund government.
Only one payment would be required under the Land Value Tax (LVT) system: aka a "Single Tax" on the value of land and resources can fund government, including a basic income, replacing welfare, social security, and unemployment payments.
Housing is a cost of living to wage earners
"Land only has a value (price) because the full economic rent is not being collected. The more economic rent (or land tax) that is collected the lower the price of the land. If the whole economic rent is collected the price of the land would be zero." – Raymond Makewell, The Science of Economics (2013)
"To understand the mechanism that drove the global economy into depression, substitute 'land' for 'housing'. All the analyses refer to housing crises around the world, and the related financial symptoms like the sub-prime mortgage racket. But these terms are intended to disguise the site of the problem – the way in which we make money out of land without adding value to the wealth of our nations." – Fred Harrison
"The management of the modern economy by the affluent for the affluent will fail." – John Kenneth Galbraith
Collect Economic Rent on all natural resources
Eliminate taxes on everything – except land (and natural resources).
Immediate social and economic benefits:
- Removal of taxes on productivity will encourage innovation.
- Removing land from speculative growth cycles will provide affordable land (and homes).
- Provision of a "Citizen Dividend" will end involuntary poverty.
Immediate benefits of collection and distribution of Economic Rent
- No more tax reporting: no income, business, and sales taxes.
- No need to take out a bank mortgage for private access to land.
- A social wage, for all citizens, providing basic economic security.
- Restoration of sustainable economic enterprise practices, ending inhumane, unhealthy, unsafe, ecologically damaging work conditions.
Collection of Economic Rent would provide public funding for all public services and infrastructure, and a Citizen Dividend, representing equal shares in surplus.
Sustainable clean energy solutions are waiting for permission to emerge.
There are many creative solutions for provision of additional public services, aka the "dirty work" could easily be managed via various National Service programs.
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Australia's Future Tax System
The Australian Treasury Department tax review, Australia's future tax system (2010) deemed collection of Resource Rent, aka Economic Rent via a Land Value Tax, the tax system of choice.
"Land Value Tax is efficient because the tax reduces the price of land but does not affect how it is used, or how much is used."
– Dr. Ken Henry, Treasury Secretary, Australian Gov. (2001-2011)
Henry Review Recommendations (Treasury 2010b)
C2 — Land tax and conveyance stamp duty
Recommendation 51: Ideally, there would be no role for any stamp duties, including conveyancing stamp duties, in a modern Australian tax system. Recognising the revenue needs of the States, the removal of stamp duty should be achieved through a switch to more efficient taxes, such as those levied on broad consumption or land bases. Increasing land tax at the same time as reducing stamp duty has the additional benefit of some offsetting impacts on asset prices.
Recommendation 52: Given the efficiency benefits of a broad land tax, it should be levied on as broad a base as possible. In order to tax more valuable land at higher rates, consideration should be given to levying land tax using an increasing marginal rate schedule, with the lowest rate being zero, with thresholds determined by the per-square-metre value.
Recommendation 53: In the long run, the land tax base should be broadened to eventually include all land. If this occurs, low-value land, such as most agricultural land, would not face a land tax liability where its value per square metre is below the lowest rate threshold.
Recommendation 54: There are a number of incremental reforms that could potentially improve the operation of land tax, including: a. ensuring that land tax applies per land holding, not on an entity's total holding, in order to promote investment in land development; b. eliminating stamp duties on commercial and industrial properties in return for a broad land tax on those properties; and c. investigating various transitional arrangements necessary to achieve a broader land tax.
40 year projection
Parliament of Australia, Library Section Briefing, 2010:
See dedicated page on Australia's Tax History
"As stated in the Report’s preface, the Review took a long-term perspective and intended the Report to be a guide for reform of the tax and transfer system in Australia to meet the challenges from the economic, social and environmental changes envisaged over the next 40 years. The 138 recommendations made in the report are therefore intended to be viewed in the medium to long-term perspective and not in the short-term context of a three-year Parliament." – Bernard Pulle, 2010
A Cambridge, UK group are offering a viable option:
Location Value Covenants (LVC)
Exemption from other taxes – that's the proposition –
"An extremely clever choice and very Georgist."
– Bryan Kavanagh
It's an option to switch from paying income taxes to signing a "Covenant" on the locational value of your land, - a Covenant which remains on the property's title.
See a quick overview here
With a mortgage, the money is created out of nothing by the banking system.
With an LVC, the money is created out of nothing by the government. >>> more
Systemic Fiscal Reform goals
Systemic Fiscal Reform is a process of reform moving from the current tax, welfare and monetary system to one based on based on economic, financial and moral integrity. The endpoint of this process is a much more stable and productive society with the following features:
No Income or Corporation Taxes – Replaced by payments pledged by property owners
Income Tax and Corporation Tax are to be phased out (along with all payroll taxes, National Insurance payments and Gains taxes). In their place, government will be funded by payments pledged by landowners through covenants established on a voluntary basis. These pledges are called Location Value Covenants (LVCs), and are inspired by or using the English legal instrument of land covenants.
No Value Added or Sales Taxes – Replaced by a Carbon Tax
VAT and sales taxes are to be abolished. In their place, a uniform Carbon Tax is levied on all extraction and importation of fossil fuels. This Carbon Tax is in proportion to the pollution and climate change potential of the fuel when used in the normal way.
No Estate (Inheritance), Gift, Transfer or Stamp Taxes
Estate taxes such as Inheritance Tax and Accession Taxes are to be abolished. All Stamp Duties are to be abolished, including those on share and real-estate transfers.
No means-tested welfare benefits – Replaced by a Citizens' Dividend
Welfare benefits based on poverty, joblessness tests or housing costs are to be abolished. Any welfare payments based on disability are retained. >>> more
The Private-Investment Community Land Trust
A Better Way to Revitalize Communities
by Dan Sullivan
The essential concept
The private-investment community land trust is an alternative system for private land-holding, for generating community revenues, and for encouraging better land use. Essentially, land users lease the land, rather than purchase it, from a land trust. The trust then uses lease revenues to pay investors, to provide community services, to rebate taxes levied against occupants of trust land by larger taxing bodies, and to acquire additional land. It has many advantages over our traditional land tenure system, and particularly over urban-renewal projects, to the occupants, the investors, and the communities in which they are located.
Current Occupants Can Stay
People often complain that urban redevelopment projects create "gentrification," by which they mean pushing poorer people out in order to entice richer people to move in. The land trust approach attracts richer people and more dynamic businesses with little or no displacement of those already living or doing business in the community. Studies show that when a community gradually improves, it actually loses fewer residents than similar communities that stagnate or continue to decline. The real cause of displacement is the urban renewal project that is undertaken to trigger gentrification. Indeed, the original term for "urban renewal" was "slum clearance." >>> more
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