The third and final part of Georgist Economic Philosophy
By GRAHAM HART
Member of the Bannerad system
|CONTENTS of Part 1|
|1. Human Rights||6. Misappropriated Rent|
|2. The Land||7. Natural Public Revenue|
|3. Wealth||8. Involuntary Unemployment|
|4. Rental Value of Land||9. Wealth Producers|
|5. Exclusive Occupation||10. Full Employment Restored|
At the turn of the 20th century, the "Single Tax" movement was one of the most vital and influential forces of the progressive era. Single tax Mayors and Legislators were elected in a number of states, most notably Mayor Tom L. Johnson of Cleveland. A statue of Johnson in Cleveland today shows him holding the book that inspired his political career: Progress and Poverty.
|CONTENTS of Part 2|
|11. Monopoly and Speculation||16. Australian Land for Australians|
|12. Site Revenue Collection||17. Encourage Land Use--Discourage Speculation|
|13. Freedom of Information||18. Australia--Populate or Perish|
|14. Banking and Money in a Prosperous Economy||19. Democratic Elections|
|15. Three-Year Phasing-in Period||20. Proportional Representation|
|CONTENTS of Part 3|
|21. Governments Should Consult the People||27. Transitional Hardship|
|22. By-Elections||28. The Public Service|
|23. "Taxation--the Power to Destroy"||29. Protective Tariffs|
|24. Taxation Must be Abolished||30. Artificial Wage Fixing|
|25. The Family--the Central Unit of Society||31. Economic Recovery|
|26. Site Rent Revenue--Potential||32. Social Justice and Responsibility|
The third and final part of Georgist Economic Philosophy
By GRAHAM HART
21. Governments should consult the People
The people should be consulted by referendum, at election times, on all important matters, with pros and cons fairly stated. In the past, the people have only been consulted when a grab for more power has been the issue. In most cases, wisely, the people have rejected such moves.
The cost of by-elections could be saved under Proportional Representation. The defeated candidate with the highest number of votes at the last election would be declared elected.
23. "Taxation--the Power to Destroy"
Dismantling the Taxation Structure needs careful examination. There are about 70 different taxes at present. We propose only one method of rasiing public revenue, which is not a tax, because there is value in exchange for rentals charged.
Each different tax calls for an army of officials for assessment, collection, and the prevention of evasion and avoidance. Also there are the unpaid costs imposed on industry with another army of people engaged in dealing with the tyranny of government and the ruthless methods used to extract the last drop of blood. The land "tax" is cheaply and easily collected, and is impossible to evade.
A particular tax must be eliminated in order to achieve any saving in collection costs to the nation. A low rate of tax would cost as much to collect as any greater amount.
In the process of elimination, Payroll and Fringe Benefit taxes must be Number One, because these must be paid, irrespective of whether a profit is made or not, and firms not making profits must borrow to pay taxes. To tax a firm for organising employment, when 600,000 Australians [written in September 1987] are out of work, must surely be an invention of the Devil.
Stamp taxes must be Number Two. This impost forces young people buying a house to pay, ultimately, about three times the amound that reaches the Treasury. It causes farmers, small businessmen and others heavily in debt to pay a tax they cannot afford in changing their securities if better borrowing terms are offering.
Fuel taxes in a country with such vast distances to travel can only be described as midnight madness. Increasing transport costs have the effect of driving people to live in more densely populated areas, closer to the workplace, increasing land rents, and depriving their children of a more healthy environment.
All forms of taxation aimed at consumers hurt the poor and those on fixed incomes more than the wealthy. Taxes on consumption restrict production just as effectively as direct taxes on employment and industry, and reduce the opportunities for employment.
Space will not permit a complete examination of all the methods of raising public revenue by taxing income and productivitiy. These are exposed in other literature available through our headquarters.
24. Taxation Must be Abolished
It is not sufficient just to collect rent for revenue. "Taxation--the Power to Destroy" must be reduced progressively (and ultimately abolished), while the rental income from the People's Estate is being diverted to the public treasury, and simultaneously all forms of monopoly are being abolished.
If the natural public revenue created by all Australians is not collected on their behalf, then about 70 repressive taxes, extracted at enormous cost (not only in money, but also in moral degeneration) must be imposed.
25. The Family--the Central Unit of Society
Destruction of family life, which is the central and most important unit of society, is the highest price to be paid. Poverty and hardship are the greatest causes of marriage failure, and innocent children suffer when their mothers are driven into the workforce. In many cases, this is just to pay spurious interest on the family home mortgage.
When grandparents are consigned to institutions, and teenagers are induced to leave home and "shack up" with their mates and girlfriends--then Communication between the three generations, so essential to cultural progress and survival, is lost. The voice of experience leavening the impetuousity of youth, and the happiness which comes with love and mutual support, are ireplaceable.
26. Site Rent Revenue--Potential
The potential revenue from site rent is enormous, more than adequate to suppor the proper functions of government. With honest and efficient administration, a national dividend, eventually, could be expected.
Classical economists know that taxation waste and monopolies, ultimately, are at the expense of rent, the revenue from which, therefore, would be the sum total of taxes and visible rent. Fortunately this would be reduced by an increase in real wates and returns for the use of capital, which are determined by the law of rent.
The general level of wages and interest (spurious interest would be eliminated) rises when the availability of land for use is increased, and rent falls; this happens when it becomes unprofitable for speculators to withhold valuable land, either totally or partially from use.
27. Transitional Hardship
With any radical change in fiscal policy there will be some cases of hardship suffered during the transitional period.
Those who had retired from the workforce would benefit only as indirect taxes were abolished. But, because they are not receiving wages, they will not be benefitting from abolition of direct taxes on wages.
Others may recently have paid a high price for a centrally-situated homesite and borrowed heavily to finance the deal; these people will benefit from the abolition of taxation and spurious interest, but land rental payments to the State may impose a strain on the family budget. In cases of genuine hardship, rental charges could be reduced or delayed (as at present) until death or the property is sold.
Ageing parents may be disturbed at the loss of, say, $50,000 of land price which they were planning to leave to the family--because, in a liberated economy, land price [not housing etc. price] would ultimately disappear. However, the parents would have the pleasure of seeing in their own lifetime their children established in life, because of the saving of land price of say $30,000 [more likely $100,000 in 1997 prices] each on their homesite, plus reduced interest and lower mortgage repayments. The saving for a family of three children could easily amount to $150,000 [1987 figures] of land price and spurious interest. Moreover, all Australians would be living in a tax-free economy, with full employment opportunities.
In a buoyant economy, generous care can be provided for those in genuine need, including the aged and the incapacitated, without a means test, and with the availability of part-time work for all who desire it.
The bureaucracy has swollen to enormous proportions, employing between 30 and 40 per cent of the workforce, and, of such, probably about half are engaged in doing useless or counterproductive work.
Nevertheless, many public servants are dedicated and do work hard; such forms of employment, however, are soul-destroying, give little or no job satsifaction, are conducive to early retirement, and often lead to premature decease.
Once a free economy gains momentum and nearly full employment is restored, many will retire voluntarily to take up more rewarding occupations. This has been the experience, to some extent, during the bried boom conditions which preceded the depressions of earlier periods.
In a free economy a gradual process of reducing the public service to manageable proportions would occur; not by ruthlessly declaring people redundant, but by natural wastage, and non-replacement of those who retire or choose to re-enter the private sector workforce.
29. Protective Tariffs
Industries which survive only because of protective tariffs cannot suddenly be forced into insolvency. Costs must be reduced, as proposed, and alternative opportunities for profitable investment made available. Free trade must be preceded by land reform.
Free market assessment of wages is possible only when a sufficient measure of site revenue collection is achieved and land speculators are convinced that there is no future in such anti-social operations. This will occur when opportunities for full employment have been restored.
31. Economic Recovery
In conclusion, one fact is certain--there can be no economic recovery for Australia [written 1987] until full or nearly full employment opportunities become a reality and alternative avenues are available for the investment of capital.
All classes of society must realise that they have been conned by legislation intended only as soothing syrup and to divert attention from the basic cause of monstrous social injustice, bordering on criminal folly, which is destroying our Country, and the future prospects of our children.
Just two glaring examples of hypocricy are given:-
* Equal Opportunities legislation. Can the children of parents paying up to a third of their combined income in land rent and spurious interest have equal opportunities with the children of multi-millionaires who live in luxury from the unearned fortunes that are sapped from the labour of wealth producers?
* Can there be any greater "Restrictive Trade Practices" than a tax structure which penalises all who do useful work, and rewards whose who are permitted to charge their fellow men [and women] for the right to use the earth?
32. Social Justice and Responsibility
This brief examination can do no more than alert the reader to the root cause of the problem, and point to a simple but effective solution, to arouse indignation, and above all, to induce all concerned people to realise that they have a responsibility for action.
The Georgist International Movement commenced in 1879. Australia has branches in each State, with world affiliations in the United States, Great Britain, Canada, New Zealand, South Africa, the Netherlands, the Dominican Republic, Spain, Korea, and Taiwan. (see LINKS and CONTACTS for details.)
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It was revealed in The West Australian 15/9/87 that Australia's suicide rate, particularly among young people, is one of the worst in the World, being about double that of the United States.