The Single Tax - Land Value Tax (LVT)
by, 03-12-2012 at 06:57 AM (1019 Views)
The cause of the 1929 & 2008 crashes was over speculation in land because the gains were tax free. Debt after debt was poured into land. Land is unique being one of the factors of production of economics. It was treated likes it was a washing machine.
If the gains from land were not tax free people would not borrow to pour debt after debt into land.
Transcript, "based" on Fred Harrison with Max Keiser:
The Forbidden Knowledge
The forbidden knowledge in economics is the land market. There is nothing magical about this. Data about the western European economy, tells us that trends repeat every 18 years without fail. Looking at the land market you can see how the heath of the economy is progressing. From this information the turning points in the business cycle can be pinpointed.
The Boom - Bust Cycle
The boom bust cycle is programmed into the politics. It used to be a monarchical system, aristocracies economy now it is semi-democratic. The underlying factors are still the same. The best gains are out of LAND, not the stock market, not out of anything else. Over the business cycle the highest capital gains are out of land. That is the secret.
The way the market is structured at the present time we definitely get a boom after 15 years into the cycle and then a bust because debt is created to over exploit that market and the economy has to come to dip. It has happened every 18 years for the past 200 to 300 years.
Socialized LAND and Privatized WAGES.
The socialization of LAND is recovering for the community the value we collectively create. Changing the taxes by abolishing taxes on earnings and the profits from the investments from our savings. Privatise the wealth that we create. Let people keep what they produce. Collect from the public sector that shared revenue that is chrysalises in the land market as land values, we use that to pay for public services. That's resocialising what used to be the public revenue and privatising people's wages.
There is an Anglo-American phenomenon, unlike the Germans who do not view their homes as their castles and invest in productive activities. The US and UK culture is to regard their house as their castle and their homes as a nest egg/pension fund.
It is a political problem. They found that when the Liberal government introduced a land value based tax 100 years ago the House of Lords simply rejected any attempt at reform.
That culture of making money out of nothing, just by occupying a little bit of land, has seeded through into the democratic system. The UK even has shop workers who have portfolios of buy-to-let properties to make money out of nothing. It is a political problem to inform them that it is against their interests. There hasn't been the political or moral strength of our statesmen for 100 years to change that corrupt method of distributing income.
All Become Richer When Taxes Are Raised From Land Values
In the USA they would be collectively better off by $100s billions per year to share out amongst the population if they made the tax shift from taxing wages and raising revenue from land values. That become an incentive. Everyone becomes richer. In the Tony Blair administration the nation lost wealth and welfare to the tune of one years worth of national income. That pays for a lot of hospitals and schools. Wages would be higher. It takes moral courage by the stewards of our system of government. The people would listen and once informed they would want to make the change.
Taxing Land Values Give Sustainable Economics
If we want a sustainable system of economics and want to be able to compete with the Far East on an equal footing over the next business cycle, the only option is to shift taxes off wages and onto the "values" of land. What that would mean? It would mean is that the factory gate products of western Europe would become more affordable in global markets. Without this tax shift, our goods will continually to be undercut by cheap labour produced goods in the Far East.
This future is not sustainable. This is what the G20 economies have driven Europe and North America into. A situation of crisis were we will not be able to compete, unless there is a change to the cost structure. The only way we can do that is to implement this tax shift.
Governments have been abysmal in looking after the interests of the advanced countries. They have exposed Europe and North America to a Far Eastern economy that is going to gobble up most of us. We may be in the doldrums for the next 20 years, because our governments have tried to inflate us out of this depression by the very mechanism that brought us into it in the first place. Debt was the way to maintain living standards, not by producing goods that are of any value but by borrowing and spending.
That is exactly what governments are still doing, piling debt on debt. They have socialised the private debt of land speculators, putting the burden onto future tax payers. What does that mean to the rest of the business cycle? It means the European and North American economies are not fit for purpose. The G20 economies have failed abysmally to take care of their nations.
Doldrums Will Continue
The economy will be in the doldrums for about 10 years, as the Japanese economy in the 1990s and European and North American in the 1930. Some will make money by latching onto the forbidden knowledge that predicts the trends, but for the rest of us there will be a decline in living standards and lot of unemployment.