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Re: Georgism or what?

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  • David Chester
    There is a whole menagerie of animals out there, not just one kind we promote. Its proper name is Macroeconomics and we are so sold on the virtues of our
    Message 1 of 7 , Oct 10, 2006
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      There is a whole menagerie of animals out there, not just one kind
      we promote. Its proper name is "Macroeconomics" and we are so sold
      on the virtues of our candidate cat (actually a catastrophie) that
      we miss the fact, (as Newton once wrote) that "he felt as a child
      who plays on the sea shore and examines a rounder stone or a
      prettier shell, whilst the great undiscovered ocean of (scientific)
      truth that lay all about".

      If you are concerned about judging the virtue of our cause, then I
      would claim that its people are far too narrow-minded, in spite of
      their wider knowledge about one specific aspect of economics. I have
      even had to argue with a few of them as to whether there is a
      difference between Microeconomics and Macroeconomics. In order to
      properly understand the latter (which most of us do not) require us
      to seriously discover what this difference really is in practice.
      George muddied the waters here by mixing his arguement about both,
      although I think it is more fair to claim that his subject really
      dealt with Macroeconomics. And we continue to teach in his old-
      fashioned way the same partial truths and half stories.

      The related point that I wish to make about this specific subject,
      is that just as the motion of particular molecules of a gas do not
      need to be calculated in order to specify its physical properties as
      a whole, so too can Macroeconomics be treated as an exact science,
      without needing to know about every personal exchange or deal. What
      we need to know are the various KINDS of transactions and between
      whom in the AVERAGE sense. If and when you write out some analysis
      of this situation (as I have done), you will finish up with an exact
      theory. My model of the system is very "mechanical" but not so
      simple as to lack interest, and what's more it shows how short-term
      Macroeconomics throws a whole new light on taxation in general and
      LVT in particular.


      ...> Jeffery J. Smith wrote:
      >
      > On Oct 9, 2006, at 4:19 PM, Ole Lefmann wrote:
      > >  
      > > I am convinced that in a democracy a lasting arrangement of
      public
      > > collection of the values of Nature and Society - or a
      considerable
      > > part of it - will never be a reality unless people - the people,
      the
      > > electorate – feel that the revenue belongs to them. If they
      don't,
      > > others will take it from them, exactly as they have done as long
      as
      > > societies have existed, with a class of power brokers and a
      class of
      > > servants.
      >
      > There is a second cat to be seen, and most Georgists, like normal
      > people everywhere, just can't see it. Georgism will win despite
      > Georgists. It's the greens, the libertarians, and the basic income
      > people who'll eventually bring it in to law, for good.
      >
      > SMITH, Jeffery J.
      > President, Forum on Geonomics
      > jjs@...; www.geonomics.org
      > Share Earth's worth to prosper and conserve.
      >
    • Paul Metz
      On Oct 9, 2006, at 4:19 PM, Ole Lefmann wrote: I am convinced that in a democracy a lasting arrangement of public collection of the values of Nature and
      Message 2 of 7 , Oct 10, 2006
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        On Oct 9, 2006, at 4:19 PM, Ole Lefmann wrote:
         
        I am convinced that in a democracy a lasting arrangement of public collection of the values of Nature and Societ y - or a considerable part of it - will never be a reality unless people - the people, the electorate – feel that the revenue belongs to them. If they don’t, others will take it from them, exactly as they have done as long as societies have existed, with a class of power brokers and a class of servants .
         
        Then Jeffery J. Smith wrote:  
        There is a second cat to be seen, and most Georgists, like normal people everywhere, just can't see it. Georgism will win despite Georgists. It's the greens, the libertarians, and the basic income people who'll eventually bring it in to law, for good.

         Now Paul Metz writes: 
         
        There is no mutual exclusion between the several streams mentioned. They are too related for that and can - not always easily - cooperate.
        And for being effective, they should do so. I suppose Ole and Jeffery have this intention as well.
        Our common ground is in the 2 assumptions made by Ole Lefmann:
         
        - "in a democracy"
        - "the people feel that the revenue belongs to them". This is also the assumption of the free market economics, that all actors are well-informed. It also makes clear we should not promote a direct use of the revenue for specific investments, like public transport,
         
        Democracies are very rare and the world average is far from it. So let us try to win the war within these few democracies first. There, most of the organisations mentioned can make themselves useful in informing - sometimes named educating - "the people".
         
        This will take centuries, so it is more practical to try to educate a potential majority of the political decision makers. The challenge we face is to select such a target group and consistently inform the key persons about "what is in our proposals for them and their voters".
         
        Such a strategic approach in cooperation with our potential allies is so far not our strength. Most of our communications are internal discussions, few attract the others we so urgently need - and who need us, but they don't know until we inform them ....

      • Wetzel Dave
        Neil, The UK introduced an insurance tax about 20 years ago. It falls on car, house (building and contents), boat, holiday insurance etc. - but I m not sure
        Message 3 of 7 , Oct 14, 2006
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          Re: Georgism or what?

          Neil,
          The UK introduced an insurance tax about 20 years ago. It falls on car, house (building and contents), boat, holiday insurance etc. - but I'm not sure about life insurance or health insurance?

          Homeowners could also receive a concept introduced to me by Tony Vickers "a Homestead Alllowance"
          Similar to a personal allowance on income tax, the Homestead Allowance would only apply to each occupied property once and could be used to offset the poor widow living in an expensive property argument.

          It is ironic that at time some of us have been considering a complete exemption for houses from LVT that the the Tory Bow Group in the UK has recently published Mark Wadsworth pamphlet that proposes a form of LVT that ONLY falls on residential land and no other.


          Best Wishes,
          Dave

          Dave Wetzel
          Vice-Chair TfL
          Tel: 020 7126 4200
          --------------------------
           

          -----Original Message-----
          From: Neil Gilchrist <Neil@...>
          To: 'Carol Wilcox' <carol.wilcox@...>; 'Charles Bazlinton' <baz@...>; 'Ole Lefmann' <olefmann@...>; Wetzel Dave <Davewetzel@...>; 'Ed Dodson' <ejdodson@...>; 'Fred Harrison' <Metaman@...>
          CC: cc@... <cc@...>; svenddinsen@... <svenddinsen@...>; 'Peter Gibb' <petergibb@...>; pma@... <pma@...>; 'Norman Slater' <n.slater7@...>; vistasigns@... <vistasigns@...>; kwilliams@... <kwilliams@...>; john.digney@... <john.digney@...>; 'Jake Himmelstein' <jhimmel441@...>; 'Godfrey Dunkley' <landtax@...>; 'George Collins' <georgelcoll@...>; marynixon@... <marynixon@...>; madrid@... <madrid@...>; 'Tatiana Roskoshnaya' <tatiana.roskoshnaya@...>; chbs13@... <chbs13@...>; 'Nic Tideman' <ntideman@...>; hsandler@... <hsandler@...>; 'Frank Peddle' <fpeddle@...>; 'Barbara Sobrielo' <denbar@...>; 'Alanna Hartzog' <earthrts@...>; 'Dan Pedersen' <dan@...>; 'Ulf Kobbernagel' <ukcui@...>; 'Peter Ussing Olsen' <peter.ussing@...>; 'Thorkild Sohn' <thorkild.sohn@...>; 'Axel Bjørk' <geonomic@...>; 'Bent Straarup' <irenebent@...>; 'Dan Holst Nielsen' <danholst@...>; 'Frede Pertho Christiansen' <frede.christiansen@...>; 'Henry Fagerli-Nielsen' <hgbibl@...>; 'Jonathan Mendel' <jon_mendel@...>; 'Jeffery J Smith ' <jjs@...>; 'Lars Bækgaard' <lars@...>; 'Lars Rindsig (dk)' <lars@...>; 'Julien Gross' <julien.gross@...>; 'Paul Metz' <metz@...>; 'Mark Wadsworth' <gmwadsworth@...>
          Sent: Sat Oct 14 04:22:40 2006
          Subject: RE: Georgism or what?

          Carol,



          As you imply LVT cannot be yet another tax.  I agree that it has to replace other taxes and the best taxes to replace are those that also fall on property.  The objections of property owners will be undercut by the removal of these taxes.  I would think they had just cause to complain if LVT encouraged selling and stamp duty penalised it.  Does the UK have stamp duty or other government levies on property insurance?  In NSW we have both stamp duty and a fire brigade levy on property insurance.  Unlike a property tax it falls entirely on capital.  Curiously it also falls on those who prepare for misfortune.



          What brings me to write though is the suggestion that it may be a good strategy to exclude residential property from the tax base.  I think that is a bad thing to do:

          1.                It reduces the size of the tax base and therefore its usefulness as a revenue source.

          2.                It distorts the market in favour of residential property.  One of the virtues of LVT is that it is an efficient tax; it does not distort the market.  More land will be made available for residential use than economic efficiency would dictate.  Even though more land may be diverted to residential use – it will remain more expensive than if it were taxed.

          3.                There is no policy justification for doing so.  Owners of residential land are getting the same unearnt income as owners of commercial, industrial and rural land.  I think bad policy is bad politics.  It may appear expedient to do exempt residential land but doing so means LVT cannot provide its benefits.  For example, under-developed or vacant residential land will remain so.  There will be no urban consolidation, just urban sprawl.

          4.                Exemptions reduce the simplicity of LVT.  It increases the cost of collection and of compliance.  With no exemptions all registered land owners are invoiced in accordance with the land value – nothing could be simpler.  If there are exemptions it is necessary to check if the exemption applies, complex rules evolve for land of mixed use, zoning or ownership and the system gets more costly to administer and comply.

          5.                Having exempted residential land it will remain a huge battle to include it later.

          6.                Providing exemptions without a sound policy will lead to more requests for exemptions; rural land, government owned land, church owned land, charity owned land, landmark businesses, struggling businesses, and businesses in marginal electorates.



          The citizens’ dividend, phased introduction, ability to defer and ability for automatic payment are preferable to exemptions of any kind.



          Regards,

          Neil



          -----Original Message-----
          From: Carol Wilcox [mailto:carol.wilcox@...]
          Sent: Thursday, 12 October 2006 9:13 PM
          To: Charles Bazlinton; 'Ole Lefmann'; 'Wetzel Dave'; 'Ed Dodson'; 'Fred Harrison'
           Subject: Re: Georgism or what?



          Sorry, Charles, but I can't see how you can introduce LVT without removing Council Tax (CT), Non-Domestic Rates and Stamp Duty Land Tax at least.



          I'm including Mark Wadsworth in this discussion because he has been involved in the drafting of tax proposals for the Tories and UKIP. He knows how difficult it is to get policymakers to accept radical changes to the tax system. Mark has produced some very interesting stats to show that a 1% tax on capital value of houses (less a homestead allowance which represents the building cost of a reasonable sized house), to raise the same revenue generated by CT + Stamp Duty Land Tax + TV licences,  would produce a big majority of winners. I think he would agree that it would be politically difficult to move past the 1% rate for some time.



          No one seems to be doing anything for the moment about lobbying for LVT on non-residential land, which I think could be far more acceptable to policymakers and stakeholders. But I can see that going beyond substitution of Business Rates + Stamp Duty Land Tax would be very difficult without promises of reduction of Corporation Tax (CT) and other business taxes. The need to reduce CT in particular is urgent because of the degree of avoidance/evasion.



          Carol


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        • Jeffery J. Smith
          ... It s people in politics who love to tinker, unnecessarily complicate things, at the expense of efficiency. Which probably explains why they re so
          Message 4 of 7 , Oct 14, 2006
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            On Oct 14, 2006, at 2:06 AM, Mark Wadsworth wrote:
            >
            > Once all these changes had been made, it would be a cinch to adjust
            > values used to strip out buildings element. At the moment, business
            > rates are about 40% of annual rental value of buildings, so it would
            > have to be a higher percentage of annual rental value of land element
            > alone to be fiscally neutral.
            >
            > I prefer to see Business Rates as 4% of capital value than 40% of
            > rental value.

            It's people in politics who love to tinker, unnecessarily complicate
            things, at the expense of efficiency. Which probably explains why
            they're so comfortable imposing posts so long with all the garbage that
            went before. Courtesy is of low value. It's only people in science and
            engineering who love efficiency, who're drawn to both succinct posts
            and zero exemptions coupled with a dividend.

            SMITH, Jeffery J.
            President, Forum on Geonomics
            jjs@...; www.geonomics.org
            Share Earth's worth to prosper and conserve.
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