Taxes Kill Jobs
Mike Curtis
[
GroundSwell, January 2012]
Taxes kill jobs is the message of political candidates. The American
economic system causes unemployment and recessions; that is true, but
without revenue and the role of government the U.S. would surely be a
third world country.
However, there is one tax system that actually creates jobs. Its
not based on the socialistic principle of Ability to Pay,
like most of our taxes. Its based on the value of the Benefits
Received by the tax payer. Its doesnt confiscate a
percentage of income, taking more from those who have a greater
income, even when the benefits they receive are the same as others. It
doesnt tax wages, which are the earned income of labor; it doesnt
tax buildings, machines, or inventories, which were acquired from the
people who made them; It doesnt tax sales or consumption, which
is the only reason anyone produces anything.
It is simply a charge for the value of the opportunities to which the
taxpayer has been given exclusive control. It is a tax on the value of
land. It can be taxed at 100% without in any way adding to the cost of
production. It doesnt add to the value of land or the value of
things produced on the land. It simply collects what would otherwise
go to the holders of land as an un-earned income when the land is
actually used.
It insures that the government has ample revenue for the legitimate
needs of society, while limiting the government to those values which
cannot be attributed to the efforts of individuals or corporations,
but are socially created by the community as a whole and attach to the
land. It cannot be evaded, because the land cannot be hidden.
The reason wages no longer rise as inventions and new technologies
increase the results of labor is because people have no independent
way to employ them-selves.
If youre among the least skilled workers, no matter how little
machines cost or how much those machines increase the results of your
labor, you have to bid against other people who want the same job; the
result is that wages tend to a bare minimumsuperseded by the
legal Min. Wage.
For workers with superior skills and knowledge, those with whom
employers can increase their profits, it is simply a matter of supply
and demand. The higher the pay, the greater the incentive to learn the
skill and acquire the knowledge. The wages of any qualified worker
will be determined by two opposing factors. First, the demand for the
goods or services they produce will encourage employers to offer wages
that tend to equal the greater value of their contribution to the
product or service. But, as the higher pay stimulates others to
acquire similar skills and knowledge the increased supply of superior
workers competing against each other, brings wages down until the
wages that reward the special skill are no longer high enough to
stimulate others to acquire the same skill and knowledge required for
the job. Remember when computer programers earned twice what they do
now? The supply increased and their wages went down. They still make
more than the average worker, because its not so easy to learn
computer programing. The supply has not exceed the demand.
Although the vast majority of workers have no way to employ
themselves, and the general level of wages havent increased in
40 years, it is not a natural law that wages will always tend to
remain static. The United States has 700,000 square miles of arable
land. That is less than 450 people per square mile. France has more
than 850. The U.K. has more than 2,500 and Japan has more than 7,500
people per square mile.
All production takes place on land. The reason why more workers are
looking for employment than landowners are looking for workers is that
an enormous portion of the arable land in America is unused or grossly
under used; simply held as an asset.
Suppose that cities were developed to their full potential. The slums
with empty houses and abandoned factories were redeveloped to their
full potential; the surface parking lots were replaced with multistory
parking garages; the grossly underdeveloped sites in the high-rise
business districts were put to their highest and best use. Suppose the
suburbs were carefully planned and developed with wooded and open
parkland instead of relying on land speculators posing as farmers to
provide open space; suppose we eliminated sprawl with its leapfrogging
patterns that increase the cost of the infrastructure, waste land, and
separate people from work and social relations; suppose we created a
disincentive to hold idle, mineral land that increases in value. That
is to say: What would happen if the majority of now privately held
idle land was put to good use? It would generate an increase in the
demand for labor and create job opportunities for everyone who was
willing and able to work.
What is required is a shift from confiscatory taxation, which we now
have, to a revenue system that is based on the value of land, which
measures the value of the benefits received by landholders from
society. Land values include the surface rights, mineral rights, and
all other natural opportunities like the electromagnetic spectrum used
for communications.
Under this proposal, the rental value has to be paid whether the land
is used or not. While the payment of rent is a payment for a benefit
received, for those who leave their land idle, it becomes a penalty,
and that insures an ample supply of land for all who need or want to
use it.
It also insures that all workers and the owners of productive capital
get to keep everything they produce by taking advantage of the natural
opportunities that are equally available to everyone else.
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