Afterword
The GlobalGreen Tax?
Community
Ground
Rent
by
Peter Gibb
Community Ground Rent is such a simple measure, and such a just one. Could it not be supported by folk of all political persuasions? ‘Honest Capitalism’? ‘True Socialism’? A ‘green’ land and tax policy you say?! But Community Ground Rent is not actually a tax at all !! - it is a user fee. Who would call the coin put in a parking meter a tax? - Nor is it one: it is a fee, for the exclusive use of a certain area of the Queen’s highway, for a certain period of time - and just so Community Ground Rent for land. It is a simple payment for real value directly received.
We are used to considering the normal source of public revenue as taxes, which necessarily harm us. Taxes on labour stifle enterprise: taxes on capital stifle investment; taxes on goods stifle trade - and the existing tax structure not only distorts production and distribution, it also depresses land values and rents. As a proportion of the national incomes of Western societies, under present tax regimes, the underlying total value of land rents is between a quarter and a third 1: therefore land rents would be well able to support necessary state expenditure, in a prosperous society with full employment. Just as all right-founded enterprises fund their activities from the resources they rightly have at hand, so it is right to source our public expenditure from our public resources - the common fund of every community in the land, given us by Nature and made valuable by the community. And relative to current tax systems, Community Ground Rent would be simple to administer, with liability hard to avoid.
Community Ground Rent would be assessed annually, holding by holding, by a Public Valuer, and would be payable by the land holder to the community. Assessments would be based on the ‘unimproved’ value of the site - that is, the bare site value exclusive of all ‘improvements’ (such as buildings, cultivation, etc.), which are the result of man’s labour, and therefore private.
Community Ground Rent would be inherently place- based, and so eminently suitable as a decentralised revenue system (where authorities could collect funds locally, and pass grants up to central government). Community Ground Rent is truly the practical, effective, and inexpensive - as well as being the naturally just - means of meeting common public expenses.
The introduction of such a fundamental measure as Community Ground Rent would obviously have many and far-reaching consequences for a country like Scotland. They would include: the systematic restoration of a more just distribution of wealth, and the fading away of social inequity (of both opportunity and reward, which today breeds such contrasting extremes of wealth and poverty) - rather than its progressive entrenchment as at present; current taxes could be reduced or even abolished; today’s depression and distortion of the economics of production and distribution, where taxes stifle the incentive to work, save and trade, would lessen or disappear; the system of public finance would become more transparent, accountable and acceptable; labour wages and returns on savings would increase; land could no longer be the subject of profitable speculative investment by commercial interests - and would appeal less for unsocial amusement - prompting a fall in land prices and, while the market settled, an increase in the amount of land offered for sale; the national economy would stabilise, with the breaking of the interminable cycle of economic boom and bust (which is actually based on land speculation); landholders would be encouraged to optimise returns from their holding (within, just as today, a system of planning and environmental regulation) - so encouraging community development, and decreasing involuntary unemployment; land parcels would be disaggregated, in the shedding of underused ‘investment liabilities’, so holding size would naturally decrease and total numbers increase, both effects easing the passage to land-ownership for the many, not the few; the initiative for enterprise and development, and the power to let or make it happen, would tend to remain with, or revert to, local individuals and groups.
So is it a wonder that man is not working now to transform his societies in the light of the truths shown us by Ogilvie? The fact is that, deep down, he is. All over the world, small groups of people are coming together and realising that the value of the rent of the land is the natural, lawful, proper and practical source for meeting our common public expenses. They have seen that the private appropriation of the value of the land is indeed “a gross and blasphemous slander on the Creator, as well as a most iniquitous fraud on the bulk of mankind”2. Henry George said it a hundred years ago: William Ogilvie said it two hundred years ago: Moses said it three thousand years ago: - but, today, they are saying it in Russia 3, in South Africa 4, in Denmark 5, in the USA 6, in the UN 7 . . .
. . . and in Scotland ???
“ You cannot cure this deep-seated disease by any half-way measures. You must go to the root, boldly and firmly. Take no stock of those people who preach moderation. Moderation is not what is needed; it is religious indignation. Grasp your thistle. Proclaim the grand truth that every human being born in Scotland has an inalienable and equal right to the soil of Scotland - a right that no law can do away with. ”
1 Costing the Earth, edited by R Banks. (See Further Reading).
2 See the concluding lines of MacDonald’s Biographical Notes (p.159).
3 “A glimpse of what is in store for Russia surfaced in a key report to the Habitat conference in Istanbul this week. The United Nations document concludes that structural adjustment programs imposed by the International Monetary Fund are a main reason for the deterioration in the social fabric of the world’s cities. These programs, which include the privatisation of land and natural resources, have increased poverty, homelessness and unemployment in more than 50 countries that borrowed from the IMF, reports the UN.
“At a Duma congress in Moscow on May 21, [we] issued a similar warning to the deputies who were about to give the third reading to the Land Code. . . . Why do we fear the Land Code? Because it threatens the return of landlordism. . . . Russia deserves better.” A Tolstoyan Land Code by Fred Harrison. ‘The Moscow Times’, June 7, 1996.
4 “Serious thought is being given to . . . a Rural Land Tax in the RSA. This is being investigated by the department of Land Affairs and a Parliamentary Select Committee on Land Affairs. The subject is also just starting to enter into public dialogue and the press. . . . Over the last few months there have been numerous reports in the media regarding the intention of the Minister to introduce a rural land tax, but the details have not been set out. Godfrey Dunkley had a long meeting with minister Derek Hanekom on March 7th 1995 during which strong emphasis was placed on the need for such a tax to apply to all land and not only farming land. It was also pointed out that this should not be seen as an additional tax but that an equivalent amount should be off-set against taxes that impinge at the margin of production.” From A Rural Land Tax For The Republic Of South Africa, in the ‘Association for Incentive Taxation Revenue Research Newsletter’ No. 8, June 1995.
5 “. . . A Georgist political party was created, referred to in English as the Justice Party, which in 1926, won two seats in the Danish Parliament.
“ ‘The greatest success of the Justice Party occurred in 1957. The party won nine seats in the Parliament; and, through an alliance with two other minority parties, was actually in a controlling position. Viggo Starcke declared that he had the ‘honor’ to be the parliamentary leader of the Justice Party for fourteen years.
“ ‘The three years of 1957-1960 were years of success for the Justice Party’. Viggo Starcke remembered: ‘The results for the country were good. . . . There was progress in every sphere of economic life. Production rose . . . more than 30%. Savings, especially in the private sector, increased enormously . . . taxes were reduced, so that a family which in 1960 had the same income . . . as in 1957, had a tax reduction of more than 10%. . . . In 1957 Denmark had considerable unemployment. In 1960 the unemployment had given way to full employment. . . . Twice the law concerning taxes on unearned increment was improved. . . . The results were good for the country. . . . For the Justice Party they were not. At the election of 1960 the party was defeated and lost all of its members in the Parliament. The result was unfair. It was mainly due to two sets of factors. The first was the continued, organised attacks from the parties representing big money and great monopolies.’ ” From The Decline and Fall of Georgism: A New Modest Proposal by Jack Schwartzman, (paper delivered at Den Danske Henry George Forening International Conference, Roskilde, Denmark, 1995), citing Centuries of Experience with Land Taxation in Denmark, by Viggo Starcke, Henry George Forlaget, 1967 & 1995.
6 “There is continuity in history. A spontaneous, unbroken thread runs through it.
“The simple nature of that thread is the gradual unfolding of an idea: that human beings must be accorded respect as individuals and that each and every one of us is equally free. . . . Personal commitment [to this idea] got me elected in 1992 as a legislator: as a Representative to New Hampshire’s General Court. . . . New Hampshire can accurately be called “the most nearly [Henry] Georgist” state among the 50 which are united in North America. We have unusually few taxes that fall on labour and industry. There is neither a general sales nor a general income tax among them. We depend more heavily than any other state - by a substantial margin - upon the property tax. We are making headway toward assessing land at its market value, thereby taking the measure of economic rent. And we tax our citizens less heavily, as a percentage of per capita income, than do any of the other states.
“I spend most of my waking hours these days looking for ways to convince my colleagues to take those few remaining steps that will make us truly Georgist, and authentically a “single tax” state.” From Property Rights: A Common-Sensism, by Richard Noyes, (Paper delivered at Den Danske Henry George Forening International Conference, Roskilde, Denmark, 1995).
7 The following are excerpts from three recent UN Resolutions:
“We urge relevant UN agencies to study alternative methods of taxation, including land value taxation which would shift taxation policies off labour and productive capital and onto the common heritage of land and natural resources, so as to promote a more equitable distribution of wealth around the Earth.”
“Base development policy on an ethic of fair and equal rights to the Earth for all human beings; promote collecting for the community as a whole the increase in ground rent that results from sustainable development.”
“Develop education of alternative economic systems, eg., replace taxation with payments to local governments for services rendered to the site.”