Here is an idea I have come up to fix Henry Georges book Progress and Poverty. any comments welcome.
Chapter X - Land Value Tax is a Wrong too - The Problem.
The Land Value Tax (LVT) as proposed by Henry George is a single tax on land, high enough that the value of land would go to zero. If an apartment, a house, a business, and a vacant lot occupy the same amount of land in the same area, they all would pay the same property tax. The money would go to the city government as the only tax they collect. The LVT is a major blunder by Mr. George despite a great book overall. George was from an era when there were no income taxes and small government burden. "We must make land common property." writes George. LVT does not make land common property, it makes land owned by government.
Murray Rothbard did a review of the land value tax and came up with some good points, it would be extremely hard to find the true site value as even empty land has improvements. He also claims society does not own the land the State would own the land. It would simply transfer this ownership from producers to bureaucrats. "A newborn Pakistani baby would have a moral claim to ownership of a piece of Iowa land someone has just transformed into a wheat field" writes Rothbard.
"A government is an institution that holds the exclusive power to enforce certain rules of social conduct in a given geographical area." says Ayn Rand. "The only proper functions of a government are: the police, to protect you from criminals; the army, to protect you from foreign invaders; and the courts, to protect your property and contracts from breaches or fraud by the others, to settle disputes". In her book Atlas Shrugged, it depicted Taggert Transcontinental a railroad of massive acreage owned by one family. This railroad denies other people to use the land for their railroad or the government a highway.
In Hong Kong or areas with a land value tax there are certain tenants that can barely afford the land tax. They live under massive poverty while the real estate tycoons that own the apartments are the richest people in the country. The cities with the highest property values in the United States often have the highest level of homelessness, just spend a walk in Santa Barbara or San Diego. These people can not afford the property tax as is.
If poor had the right to live on rent-free land they would be able to use their income to improving their lives by saving and investing. Instead their money is spent support the city workers, mortgage, and real estate industries. The city requires permits even to install a water heater and your house has to be built their way and their size to boost the property tax. They collect tax for libraries and parks you don't even use.
Imagine a person living on 1 acre of desert land and the price per acre might be $500. Another person lives on a lot in Malibu and the lot might cost $500,000 an acre. How is that fair when the guy in the deserts kid ends up in Vietnam or Iraq, while the kids of the guy living in Malibu sits on the beach with cool breezes all day. Someone living in an apartment should pay the same tax to the city as a house, they use the same amount of police, fire, and water. According to George, an apartment dweller would get a tax break. You should pay for the services you use. The services should be independent of the land rent.
The more improvements that are done, the higher the prices are for land. The poor are priced out of the market, from their fathers that built the trains and roads. Their only crime, they did not make much money. Furthermore, the poor must pay the rent, insurance, and property taxes, before they buy anything else. If not they end up on the street. All the while the land owner is using the rents to accumulate more and more land, once they reach critical mass where their rents exceed their spending all they do is accumulate land.
George was wrong about assuming government property is common property. Rand and Rothbard were wrong about allowing individuals to own land. Land is limited and unlike Rembrants is necessary for life, food, energy, and shelter. A small percentage of individuals and government are not society. Land under your feet should be free like air. The question is what are the logistics to make this happen.
Chapter X - Average Rent - The Solution.
If rents should not be collected for government or individuals, who should collect the rents? The land of a country should be owned as if each person was a shareholder. If you use more land than your fair share, you should pay rent to those that use less land. All property lots are auctioned and leased to the highest bidder as 10 year and 5 year leases. All money collected from the land lease auctions is placed in a fund called the land rent pool. The pool should be divided equally to residents as a monthly check. Every person over 18 would receive the identical check.
People that use more than their fair share of land would be paying more in rent than their land check. A farmer that leases 500 acres might pay $200 an acre or $100,000 a year to lease the land. A homeowner in the desert might rent 1/4 acre for $1 a year. A 5 acre oil lease might generate millions for the land rent pool. Fishing licenses might generate more money. 50% of all land would be preserved as wilderness, forests, and to protect wildlife. There would be no land locks like the Nature Conservancy. The Nature Conservancy might now advocate which 50% is to be preserved. An apartment dweller might not even own land but receive a land check, as a citizen. People that use less land than their fair share would receive a land check. Those that use average rent would receive nothing. If the average rent check is $800 per lot per month, if you lease a lot of $1200 a month, your net fee is $400 per month.
All oil leases, timber, fish, and minerals rights meet the George definition of land. These leases should be added to the total land rent pool, taken from the grips of government. Today one half of all homes in Palm Springs are built on leased land, farmers rent land in every farm state and most counties, and the government collects oil royalties. The switch to the new system will be rather painless. Considering Iowa as a whole, the total amount of bushels per acre and total corn produced in Iowa should increase on a land lease system as the most productive farmers would win bids for farm land.
After the lease is up the property, it is again put up for lease on by auction. After the new leaser wins the bid, the old leaser has one month to remove their property at the site. The new leaser takes control of the lot. The cycle is repeated. You can own as many lots as you want as long as you win the auction and pay the rent. Movable homes will be the new industry.
Permanent improvements of the land become part of the land as the soil. To conform to air and water quality laws you most likely would want a septic system. You could request a grant from the land lease board to install a septic system and water well. Thus you might get a check of $20,000 to install a well, tank, and septic system, but install it for $19,000 and keep the difference. If the system is expected to last 100 years you might be billed $40 per month until the lease is up. The goal is the land pool should expect to reap 100% profit on all improvements. You might also request $100,000 to build a house. If this house has a 50 year lifespan warranty, the expected rent might be $333 monthly. There are no mortgages, you must meet and pay the rent to live there. Total improvements are expected to generate profit in the land auctions. You can put a removable home on the property, to lower your cost of rent. You fail to make rent, you lose your lease. No problem you move to another area.
The city would still own the streets, the sewers, electric grid, schools, cable lines, possibly even libraries, and the fire department. However, it would be your choice to subscribe to them or not. The only mandatory fee would be for the courts, police, and defense and that would come from sin and income taxes. The streets would be owned as by the people. The roads should be built by volunteer donations. If you decided to do some work on the road it would be legal as long as it met certain standards. In order to get a permit to drive over 10 mph on roads, you might have to be responsible for 500 feet (maybe 50) of road built to ansi standards. Like adopt a road, you can build it yourself, or hire a contractor to build and maintain.
If the people own the land, do the cities, counties, states, or Federal government have any right to it. The only people entitled to free rent are the police, courts, jails, and defense. These are necessary to enforce the law and protect the people. However, when you consider a school or city park it does not meet the criteria for free rent. However schools are a choice. You have the choice to select a $1000 a month school with poor ratings or also have the choice to select a home school for $100 a month. Schools act as businesses and they should collect land rent that goes into the rent pool. City parks with grass and soccer fields should also pay rent if used for people and picnics. Libraries must pay rent. City government must bid on parcels for parks, schools, firestations, streets, and libraries. This money goes to the rent pool to be divided among each citizen equally. However, the government can not force you to use their junk. They can not put firefighting or school requirements on the property. Dams and water structures must pay a rent as the States, utilities, cities own them to provide water at economy of scale to residents of the city.
Suppose the land causes you injury or the house collapses who do you sue. It would not be possible to seek $1 in damages from the land pool. The land rent pool is sacred and no scamming or lawsuits can be taken from it. However, you could sue the homebuilder if the house is defective and causes you damage.
Ayn Rand first jobs when she came to the United States were letter stuffing and waitress. If her books did not sell, she probably would have been doing the same work for the rest of her life. However, there is no reason to live in poverty if you are doing something productive. You can really start to accumulate wealth not paying rent to government or landlords. Every person in the United States can be wealthy even a letter stuffer.
Apartment buildings, skyscrapers, golf courses, corporations would pay a maximum rent. It would be high enough such that no one would question the low rent maybe $5000 per acre a year, maybe $1000 an acre a year for golf courses as they offer some wildlife value. It is the rent where a person could lease the land permanently and the lease could be sold.
There have been complaints this system is Maoism or communism, This system does not confiscate people lands by death, it does not organize communes, it does not tell what to plant or how to plant. The rent rather than going to the land owner or government, would go to the median rent pool to be divided equally among all citizens. This would assure the people the land an the land under their feet is free unless you use too much or take the best land.
Support the median land rent system. Support a more productive use of land. Support free land under your feet.
