Let us get rid of that damned Un.
Equal Right to what is created as a result of a developing society – more details.
Sole right for the individual to what the individual contribute – more details.
Equal right to political influence in the broadest possible sense – more details.
Reciprocal humanity, across borders – more details.
UnEqual right!
Unequal right leads to extreme inequality. This inequality is a result of the fact that only a few are allowed to rake in the economic return created by the development of society. The table of society is more accessible to the elite than to those at the bottom of the social ladder; that is why they are at the bottom. The elite part of society are getting rich not merely by their individual work effort, but by raking in profits from speculative trading in values. This speculative trading distorts the economy, and creates riches far beyond what could be obtained by individual work effort.
A few obtain riches that soar to great heights while others scrape the bottom. This extreme inequality is unnatural and contrary to the simple justice, that could be obtained by distributing the economic return created by the development of society equally to all members of society.
Equal rights are about the right to get your equal share of the economic return created by the development of society, no matter what job you have or don’t have, what education you have or don’t have, how much land you own or how valuable that land may be, or how much capital gain you are able obtain from investing capital in production. It is an equal right you should have due to the simple fact that you contribute to the development of society at an equal proportion to every one else. You are a cogwheel in the economic machinery of society, and no cogwheel is more important than others.
Financiers contributes with risk taking capital and as a taxpayers and consumers, but on the other hand they are putting taxes on the economy due to their workfree profits obtained by pure speculative investments. Tax evasion is another common phenomenon, and is also simply an extra tax on the productive part of the economy.
The common worker contributes with his work effort and as a consumer. He also pays his tax.
Welfare claimants as consumer, and we all contribute greatly by stimulation our offspring to become a productive part of society, if this society allows it.
All such cogwheels are equally essential for the macro-economy. Therefore every cogwheel should be awarded an equal share of the economic return created by the development of society.
But equal right is more: The economic return created by individual work effort, and by investing capital production should be protected against taxation. No one but the individual having invested this work effort and capital has the right to earn this revenue. Income taxation puts a taxation on the revenue on which we all depend for out livelihood, thereby taxing the revenue that could have invested in creating jobs, production and consumption of products.
As society is developed the conditions for economic activities improve; the collective work effort by all combined with investments in production and the buying and trading of all, and especially the infrastructural development improve these conditions, so that the revenue gained from economic activities increase. Land is essential for all economic activities, which means that land values will increase as a result of these improved conditions, caused by the joint effort of all of us.
This is where the solution to inequality can be found. The increase in land value is a result of society developing and should be shared equally by all.
In the present societies that is not the case. The elite rake in the the lion’s share as workfree profits, leaving nothing for those at the bottom of the social ladder.
To fight inequality this has to change. It can be done by putting a tax on land values to an extent where it is not possible to earn work free profits from having control over land and its work free revenue. This work free revenue is called Land Rent, and is the result of land being traded as a commodity, constantly increasing in value, because the conditions for economic activities continue to improve. The free trading of land should be abolished, because the revenue earned by trading land is created by the joint effort of all members of society. We should all have equal right to our share of this revenue.
Land should be rented, but houses etc. should be traded as before.
We should also be allowed to keep the entire revenue from our own work effort and from investment in production and job creation – the income. This is where the double role of land value taxation becomes apparent; The land value tax should be the only source of revenue for the government budget, so that income tax can be removed. As society continues to develop, the revenue from land value tax will become greater than what is needed for public expenditure. This surplus should be shared by all as a citizens salary.
This is about land ownership: what does it actually mean to own a piece of land? We should discriminate between judicial ownership and economic ownership, and economic ownership should be split into two:
the right to exploit the land for your own benefit, and the right to cash in on the mere ownership of the land, the workfree profits. Judicial ownership and the right to exploit land economically should remain private, but the right to cash in work free profits should be stopped by means of land value taxation. The land value tax should be taken solely from the unimproved value of the land; the improvements produced on the land – houses, gardens, systems for geothermal energy etc, i.e. anything produced, should be free from taxation. Only the land itself should be taxed.
Equal right is about more than this. It is also equal to political influence no matter your income, your wealth, your placement in the social hierarchy, education etc. Even the most highly educated expert in political science and economics can be so focused on his personal needs and truths, that he or she is unable to judge what is best to induce all the cogwheels of society to run in a stable and operational way. To reach such a goal we need inputs from all hierarchies of society.
Unequal right breaks all borders. Inequality is unevenly distributed. The country with the highest GDP per capita per year is Liechtenstein with $139.100, and the country with the lowest is Somalia with $400. This difference is not caused by the average inhabitant of Liechtenstein being 347 times smarter or hard-working than the average Somalian. It is caused by the unequal access to the revenue created by the development of society; it is caused by the fact that the Somalian society develops very slowly or not at all, because the trading partners Somalia earns the trade surplus consistently and constantly. It is caused by the fact that whatever growth is realized in Somalia is raked in by a small elite, who are consistently investing their profits abroad, thereby sucking their own country dry.
It is caused by the rich countries being allowed to protect their own terms of competition, while demanding that their poor trade partners drop any kind of protection. This policy is enforced by lapdogs of the rich countries: IMF, OECD and WTO.
From a national perspective the solution has already been mentioned: land value taxation.
In a global perspective part of the solution is for the poorer countries to de-globalize their economy, at least to some extent, and then focusing whatever economic surplus they have in an infrastructural development: transport, irrigation, electrification, education etc., and that they base their economy primarily on domestic products, and protect their financial markets against exploitation or downright attacks from the global financial system. 68,5 million people have been displaced from their home region or even their home country. About 3 million har applied for asylum in primarily Europe, USA and Australia. Several reports from Gallup world show, that the potential for refugees are far greater, perhaps around 750 million people – source.
No one is asking why people choose or want to become refugees. We are only talking about avoiding the pressure from immigration. But we must remember, that these people have the same equal right as everyone else, even if they come to Denmark or Germany or…. If we truly want to stop them from coming we must fight the reasons behind their choice, not fight the refugees.
The Most Socially Just Tax
Our present complicated system for taxation is unfair and has many faults. The biggest problem is to arrange it on a socially just basis. Many companies employ their workers in various ways and pay them diversely. Since these companies are registered in different countries for a number of categories, the determination the general criterion for a just tax system becomes impossible, particularly if it is to be based on a fair measure of human work-activity. So why try to do this when there is a better means available, which is really a true and socially just method?
Adam Smith’s (“Wealth of Nations”, REF. 1) says that land is one of the 3 factors of production (the other 2 being labor and durable capital goods). The usefulness of a particular site of land is expressed by its purchase price and in the amounts that tenants willingly pay as rent, for its access rights. Land is often considered as being a form of capital, since it is traded similarly to other durable capital goods items. However it is not actually man-made, so rightly it does not fall within this category. Indeed, the land was originally a gift of nature (if not of God), for which all the people in the region should have equal rights for sharing in its opportunities for residence, accessibility and use.
However over many years, as communities became established and grew, the land has been traded as if it was an item of durable goods and today it is often treated as a form of capital investment. It is apparent that for a particular site, its current site-value greatly depends on location and is related to the community density in its region, as well as the size and natural resources that it can provide. Such bounty, often manifest in the exploitation of rivers, minerals, animals or plants of specific beauty and use are available only after infrastructural developments have made possible access to the particular place. Consequently, much of the land value is created by man within his society, by his need and ability to reach it and take from it materials, plants and live creatures, as well as the opportunities it provides for working space near to people. These advantages should logically and ethically be fairly returned to the community, for its general use within the government, as explained by Martin Adams (in “LAND” REF 2.).
However, due to our existing laws, the land is owned and formally registered and its value is traded, even though it can’t be moved to another place, like other kinds of capital goods. This right of ownership gives the landlord two big advantages over the rest of the community. He/she can determine how it may be used, or if it is to be held out of use for speculative reasons, until the city grows and the site becomes more valuable. Secondly the land owner enjoys the rent from a tenant or its equivalent if he uses the land himself. Speculation in land values and its rental earnings are encouraged by the law, in treating a site of land as personal or private property—as if it were an item of capital goods, although it is not, see Prof. Mason Gaffney and Fred Harrison: “The Corruption of Economics”, REF. 3.
Regarding taxation and local community spending, the municipal taxes we pay are partly used for improving the infrastructure. This means that the land becomes more useful and valuable without the landlord doing anything—he/she will always benefit from our present tax regime from which the land value grows. This also applies when the status of unused municipal land is upgraded and it becomes fit for community development. When this news is leaked, after landlords and banks corruptly pay for this valuable information, speculation in land values is rife.
There are many advantages if the land values were taxed instead of the many different kinds of production-based activities such as earnings, purchases, capital gains, home and foreign company investments, etc., (with all their regulations, complications and loop-holes). The only people due to lose from this are those who exploit the growing values of the land over the past years, when “mere” land ownership confers a financial benefit, without the owner doing a scrap of work. Consequently, for a truly socially just kind of taxation to apply there can only be one method–Land-Value Taxation.
Consider how land becomes valuable. Pioneers and new settlers in a region begin to specialize and this slowly improves their efficiency in producing specific goods. The land central to the new colony is the most valuable, due to its easy availability and least transport needed. After an initial start, this distribution in land values is created by the community. It is not due only to the natural land resources. As the city expands, speculators in land values will deliberately hold potentially useful sites out of use, until planning and development have permitted their more intensive use and for their values to grow. Meanwhile there is fierce competition for access to the most suitable sites for housing, agriculture, manufacturing industries, transport byways, etc. The limited availability of the most useful land means that the high rents paid by tenants make their residence more costly and the provision of goods and services more expensive.
Entrepreneurs find it difficult or impossible to compete with the big organizations who have already taken full advantage of their more central sites. The greater cost of access, or the greater expense in transportation from less costly outlaying regions, discourages these later arrivals. It also creates unemployment, causing wages to be lowered by the land monopolists, who control the big producing organizations, and whose land was previously obtained when it was relatively cheap. Consequently this basic structure of our current macroeconomics system, works to limit opportunity and to create poverty, see above reference.
The most basic cause of our continuing poverty is the lack of properly paid work and the reason for this is the lack of opportunity of access to the land on which the work must be done. The useful land is monopolized by a landlord who either holds it out of use (for speculation in its rising value), or charges the tenant heavily for its right of access. In the case when the landlord is also the producer, he/she has a monopolistic control of the land and of the produce too, and can charge more for this access right than what an entrepreneur, who seeks greater opportunity, normally would be able to afford.
A wise and sensible government would recognize that this problem of poverty derives from lack of the opportunities to work and earn. It can be solved by the use of a tax system which encourages the proper use of land and which stops penalizing everything and everybody else. Such a tax system was proposed about 140 years ago by Henry George, a (North) American economist, but somehow most macro-economists seem never to have heard of him, in common with a whole lot of other experts. (I would guess that they even don’t want to know, which is even worse!) In “Progress and Poverty”, REF. 4, Henry George proposed a single tax on land values without other kinds of tax on earnings, sales of produce, services, capital-gains etc. This regime of land value tax (LVT) has 17 features which benefit almost everyone in the economy, except for landlords, tax collectors and banks, who/which do nothing productive and find that land dominance and its capitalistic exploitation have their own (unjust) rewards.
17 Aspects of LVT Affecting Government, Land Owners, Communities and Ethics
Four Advantages for Government:
1. LVT, adds to the national income as do other taxation systems, but it should replace them. The author has shown in REF.5, that taxation of any kind is beneficial to the country as a whole due to its national income providing for more work too, but that when the tax applies to land the topology and spread of its effects are about 3 times as beneficial as when the same amounts of income are taken directly from labor.
2. The cost of collecting the LVT is less than for all of the production-related taxes–tax avoidance becomes impossible, because the sites are visible to all and who owns each site is public knowledge. The army of tax collectors who are opposing a similar set of lawyers, are no longer busy with tax loop-holes in the law, so the number of people more productively employed will grow and the penalty on the country of having complicated taxation is less.
3. Consumers pay less for their purchases due to lower production costs (see below). They can buy more goods and enjoy a raised standard of living. This creates greater satisfaction with the management of national affairs and more prosperity.
4. The national economy stabilizes—it no longer experiences the 18 year business boom/bust cycle, due to periodic speculation in land values (see below). The withholding of unused land is eliminated see item 7, so there is less need for the complications of frequent land sales, with developers searching and buyers hunting for unused sites.
Six Aspects Affecting Land Owners:
5. LVT is progressive—this tax depends on the site area as well as its position. The owners of the most potentially productive sites pay the most tax per unit of area. Urban sites provide the most usefulness and their owners will pay at greater rates, whilst big rural sites have less value and can be farmed appropriately, to meet their ability to provide useful produce. Small-holder farming closer to population centers becomes more practical, due to local markets and reduced distribution costs.
6. The land owner pays his LVT regardless of how his site is used. A large proportion of the present ground-rent from the tenants (who do use the land properly), becomes transformed into the LVT, with the result that the land has less sales-value but retains a significant “rental” value.
7. LVT stops speculation in land prices, because the withholding of land from its proper use is not worthwhile.
8. The introduction of LVT initially reduces the sales price of sites, even though their rental value can grow over a longer term. As more sites become available, the competition for them is less fierce and entrepreneurs have more of a chance to get started.
9. With LVT, land owners are unable to pass the tax on to their tenants as rent hikes, due to the reduced competition for access to the additional sites that come into use.
10. Speculators in land values will want to foreclose on their mortgages and withdraw their money for reinvestment. Therefore LVT should be introduced gradually, to allow these speculators sufficient time to transfer their money to company-based shares etc., and simultaneously to meet the increased demand for produce (see below, items 12 and 13).
Three Aspects Regarding Communities:
11. With LVT, there is an incentive to use land for production, transport or residence, rather than it being vacant and held unused.
12. With LVT, greater working opportunities exist due to cheaper land and a greater number of available sites. Consumer goods become cheaper too, because entrepreneurs have less difficulty in starting-up their businesses, and because they pay less ground-rent–consequently demand grows, whilst unemployment and poverty decrease.
13. Investment money is withdrawn from land and placed in durable capital goods. This means more advances in technology and cheaper goods too because the effectiveness of labor has been raised.
Four Aspects About Ethics:
14. The collection of taxes from productive effort and commerce is socially unjust. LVT replaces this national extortion by gathering the surplus rental income, which comes without any exertion from the land owner or by the banks–LVT is a natural system of national income-gathering.
15. Previous bribery and corruption for gaining privileged information about land, cease. Before, this was due to the leaking of news of municipal plans for housing and industrial development, causing shock-waves in local land prices (and municipal workers’ and lawyers’ bank accounts!)
16. The improved use of the more central land of cities reduces the environmental damage due to unused sites being dumping-grounds, and the smaller amount of fossil-fuel use (with its air-pollution), when traveling between home and workplace.
17. Because the LVT eliminates the advantage that landlords currently hold over our society, LVT provides a greater equality of opportunity to earn a living. Entrepreneurs can operate in a natural way– to provide more jobs because their production costs are reduced. Then untaxed earnings will correspond more closely to the value that the labor puts into the product or service. Consequently, after LVT has been properly and fully introduced as a single tax, it will eliminate poverty and improve business ethics.
References:
1. Adam Smith, 1776: “The Wealth of Nations”, UK
2. Martin Adams, 2015: “LAND– A New Paradigm for a Thriving World”, North Atlantic Books, California, USA
3. Mason Gaffney and Fred Harrison, 2005: “The Corruption of Economics”, Shepheard-Walwyn, London, UK
4. Henry George: “Progress and Poverty” 1897, reprinted 1978 by the Schalkenbach Foundation, New York, USA
5. David Harold Chester, 2015: “Consequential Macroeconomics—Rationalizing About How Our Social System Works”, Lambert Academic Publishing, Saarbüchen, Germany
Whats the use in having good rights if they are not respected? What we badly need is the actual equality of opportunities to work, reside and have our children properly educated, as well as getting medical assistance when necessary. These rights will come after the most basic one is received through the advantage in owning useful land. Its potential or actual rent should be paid to the government, as if it was a tax and one that replaces all other harmful ones on the results of production such as earnings, purchases and added capital gains.
TAX LAND NOT PEOPLE; TAX TAKINGS NOT MAKINGS!
It is not simply equality nor equal rights that properly covers this dire need, but the equality of opportunity both to work and to reside that our poor society is lacking. This opportunity is being withheld and speculated in through the land-owners, who behave as if they are capitalists instead of being owners of a limited gift of nature.
I apologize for the late answer – I have been on a vacation.
I am not saying, that equal rights to the LVR through an LVT combined with abolishing income taxation if possible, will automatically solve all the socio-economic problems of a society.
I describe it by saying that all the socio-economic inequality is a result of the foundation on which society is built being unstable, distorted and deformed, due to land speculation and all its consequences, and income taxation etc.
Introducing LVT will start to gradually repair these deformation, creating a far more stable and well-functioning foundation for the society. But all the present problems will not disappear automatically. There will still be plenty of political work to be done. But the prerequisites for attaining equal opportunities for all will be far better than the present. We still need to create an all-inclusive society, where people are treated as individuals with equal access to the service provided by society.
For much more detail: https://rightsanddemocracy.blog/an-inclusive-society/.