End the 1 Percent’s Free Ride: Taxing Land Would Solve America’s Biggest Problems

[xchrom]

http://www.alternet.org/tax-land-end-1-percents-plutocracy



Appealing to the overwhelming majority of Americans who believe the tax code is so complex that it needs “ major changes or a complete overhaul,” Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Dave Camp, R-Mich., have adorably started a joint Twitter handle: @simplertaxes. The bipartisan love fest is no doubt a heartfelt effort, but not very convincing from men who acquired the fancy titles by opening and maintaining loopholes for the ownership class. Baucus’ hot-off-the-presses tax reform proposals predictably simplify the code very little.

At present, neither party advocates the tax code so elegant it can reduce inequality, mitigate poverty, stimulate productivity, prevent asset price bubbles, stem community-shredding gentrification and drain the distended Wall Street cabal of its ill-gotten gains – in just one tax.

Land value. If we want a real overhaul/simplification of the tax code, the way to do it is to tax land value. It might be the only tax we need. No sales tax. No income tax. No payroll tax to fill a Social Security trust fund. No corporate income tax that, as we can plainly see, offshores profits. No need to tax labor and industry at all. Just tax the stuff that humans had nothing to do with creating, and therefore have no basis to claim ownership over at all. You’ll find that almost all of it is “owned” by the fabled 1 percent.

And boy are they sucking a lot of money out of it. By far the most valuable asset form in the U.S. is real estate, and the majority of that is the value of the land, as distinct from the value of the human-made buildings. Economist Michael Hudson has assessed that the land value of New York City alone exceeds that of all of the plant and equipment in the entire country, combined. No one put any enterprise or cost into producing the land’s value – they simply bought it when it was cheap, sold it when it was dear, and waited for the check. “They” are the Finance, Insurance and Real Estate (FIRE) sector, and they capture 40 percent of the United States’ profits, despite the complete passivity of their profit-accumulation method.

[Egalitarian Thug]

1. Good morning. I like to think that Jesse is right, but I'm not holding my breath. n/t

[n2doc]

2. No. The tax would just be passed off to their renters

How about 2 things- Tax all income the same, and tax estates at at least 50% (above a million or 2)? The first eliminates the special breaks the Rich get for capital gains, carried interest and other scams, and the second ensures that they can't just create a self-sustaining plutocracy. The rich will still have rich kids, but they will have to work to keep up their wealth level.

[mainer]

3. You want to shift income taxes to property taxes?

Just the way to hurt retirees who make poor incomes. This doesn't capture only the rich; it captures cash-poor, land-rich farmers and ranchers. And no, land isn't all held by "the rich." Many of the farms here in Maine are held by small organic farmers who are barely making a living. And many waterfront homes are held by older people who saw their land values rise over the past decades.

Taxes should stay on incomes -- tax people when they can afford it.

[unblock]

11. no one's saying there can't be adjustments where appropriate.

and one could come up with examples where income tax is equally inappropriate.

[Bohunk68]

15. Absolutely!!

I live in Upstate NY out in the country with 20.8 acres. Not the best land in the world. I'm also retired and living on a small fixed income. I would not be able to afford all the taxes that would have to be levied to make up for stopping all other taxes. This idea puts the cost on the backs of a lot of retired persons and would force a lot of us onto park benches. Shitty idea.

[Chan790]

18. My best friend's parents are in a similar situation...

my understanding though from him is that the reason everyone who lives up there owns 20,30,40 acres because all that land is basically hinterland (undevelopable forestland with no roads or infrastructure and little timber value.) and worth bunk. (Thus, that taxes on it would be similarly low until that time where it becomes actually development-ready and thus valuable.)

Looking at the proposal in the OP, my takeaway is that your taxes, by intent and design, should go down as a larger portion of the tax-weight would be borne by the owners of the extremely valuable RE in midtown Manhattan, the stuff worth 10000x more per city- block than your entire 20 acres.

[beachbum bob]

4. not a good plan...if you want to tax the rich

eliminate preferential treatment of their income.....

capital gains for one
inheritance tax
stock transfer taxes based on shares traded
under table income avoidance like corporate "distributions" in place of W2 income

[FreakinDJ]

6. +1

[unblock]

10. that's a good set of improvements to a system that's inherently flawed.

the rich will always find ways to avoid taxes, and income taxes are among the easier to avoid, reduce, or at least defer.

[beachbum bob]

21. not difficult to acheive if we had

Democratic Congress people guts and ethical center

[hobbit709]

5. Fuck that. The county values my property at $122K-90 of that is the land value.

I live on $938/mo SS plus whatever I can make on the side. My property taxes went up $300 from last year. In 1990 when we bought the house for $36K taxes were under $400/yr. This year taxes are $2700.

[canoeist52]

7. This is the tax that broke up so many family farms in Massachusetts.

They were taxed at potential house-lot value. Farmers couldn't afford that tax so they had to sell the land for house-lots. So we ended up with suburban sprawl an lost so much habitat for wildlife and valuable open space for environmental renewal.

Taxing capital gains is more fair.

[safeinOhio]

8. Tax wealth, not income.

I could go for that.

[Joel thakkar]

9. Not the full solution

1) If we go away from income tax to property tax, we have to first of all take the Property-Tax-Exemption of religious and non-profit org. If we do not take that exemption, Religious churches will start buying up loads of lands/property to expand their empire and effect life of non-religious people.

2) Many people will be forced to sell their home. Let's suppose someone got a $500k home in inheritance. Suppose they lose their job, how will they pay for the big property tax?

3) What about companies that require very low office space? New tech startups only use a floor in the building while do millions and billions of transactions. They will have a very low tax rate. (This point is only valid if you are also taking away corporate income tax along with personal income tax)

[Chan790]

20. Proposing ending NPO tax-exemptions on holdings is a conservative and ridiculous thing...

to propose. It's right up there with proposing extending the Capital-gains exemption. It may be the most conservative thing that will be posted on DU today and not result in an instant banning.

It's a long-term goal of the extreme right which opposes the existence of 501(c)3 charitable institutions, claiming that only religions should receive tax exemption and that the weight of taxation for those charitable institutions gets shifted to them. Further, any such proposal seriously harms the public interest by harming the ability of entities that require large amounts of space such as animal sanctuaries, the community gardens of food banks, homeless shelters, domestic violence shelters,...to serve the public interest. You might as well propose outlawing charities since the tax-deduction for charitable giving would also be going away in this proposal...your proposal reduces the operating funds of 99% of current 501(c)3 charitable institutions to $0 while imposing huge taxes upon them.

So...what do you have against the people in poverty, the homeless, victims of domestic violence, children, victims of natural disasters, people with rare diseases and the 99.9% of Americans that benefit every year from the efforts of NPOs?

[NightWatcher]

12. Tax the financial market transactions. Leave the land alone

Don't tax my aunt who had acreage, tax the guys who trade hundreds of times a minute to manipulate the NASDAQ, DOW, ....

[rock]

13. On an aside: the complexity only serves one purpose

Clue: it's not to make the taxes fair

[Coyotl]

14. Bad idea. Farmers and ranchers own most of the private land in the USA.

Higher property taxes hits retirees particularly hard.

[xchrom]

16. Meet The 25 Land Barons Who Collectively Own 1% Of America

http://www.businessinsider.com/biggest-landowners-america?op=1


A Nevada well drilled by Fasken Oil & Ranch Ltd
#25 Fasken Family owns 300,000 acres

Fasken Oil & Ranch Ltd
Land: Ranches and oilfields throughout Texas.
Background: Toronto attorney David Fasken started buying land in Texas in 1913. After oil was discovered on their ranch in the 1940s, the Faskens spread across the Southwest.



Pat Broe and his Rockies acres
#24 Pat Broe owns 310,000 acres
Land: Holdings in many states. Broe's Hubble & Green Ranches in New Mexico cover 290,000 acres. His Colorado’s Great Western Industrial Park became a major source of the state’s green job growth in 2008.

Background: Broe's investment and asset management company controls over 100 companies in real estate, energy and transportation.


Anne Marion and her sprawling 6666 Ranch
#22 Anne Marion owns 345,000 acres
Land: Oilfields and ranchlands throughout Texas. Her two main ranches, the 6666 Ranch near Guthrie and the Dixon Creek Ranch near Panhandle, total 275,000 acres.

Background: Anne Marion is the fourth generation heir to Samuel Burnett, a cattle rancher who amassed more than a third of a million acres in Texas by the early 1900s.

21. East Family owns 350,000 acres

East Wildlife Foundation
Land: Ranchland in Texas and New Mexico.

Background: Alice Gertrudis Kleberg East, gave up her interest in her grandfather Richard King of King Ranch estate in exchange for the San Antonio and Santa Fe ranches.


Founding father J.R. Simplot and his vast agricultural complex in Idaho.
# 20 Simplot Family owns 355,746 acres
Land: Idaho, agribusiness. The land and livestock division has 37 farms and 15 ranches with capacity for 30,000 mother cows.

Background: The J.R. Simplot Company started its fortune in potatoes but diversified over the years to become one of the largest, privately held food companies in the world.



Read more: http://www.businessinsider.com/biggest-landowners-america?op=1#ixzz2lUDG30BW


***i'm of the opinion that we are not incapable of designing and engineering tax law so that it hits the wrong people.
i think there is some consensus that we have not targeted out tax laws enough -- which is what i think we're seeing here.

[hfojvt]

17. I am getting a sense of deja vu

Did somebody just read Henry George's "Progress and Poverty"?

http://en.wikipedia.org/wiki/Henry_George

"Henry George (September 2, 1839 – October 29, 1897) was an American writer, politician and political economist, who was the most influential proponent of the land value tax, also known as the "single tax" on land."

[stevenleser]

19. I prefer a straight wealth tax for the 1%.

Something on the order of 1% per year for anyone in the top 1% of wealth.