Property Tax Reform to Share Nature's Gifts to Us All
[A presentation to the Calhoun County, West Virginia Commission, 18
October 2009. Reprinted from
GroundSwell, May 2012]
The earth and its resources was created by a higher power, God,
Mother Nature, or a big bang. Whatever its origin, it was not created
by human beings.
Ownership is grounded in exertion, or production. In as much as we
did not produce the earth, neither can we own it. But in order to live
we have to get access to the earths space and resources.
And by we I mean all of us. Fairness and sharing are human traits
which have helped make us civilized. Civilizations which were crashed
were civilizations owned by a few. The USDA 1978 land ownership survey
showed that 4% of Americans own 95% of the privately owned land. And
by owned they meant with deed or title in hand. This doesnt
sound like sharing to me.
Security of tenure and ownership are not the same thing. We needf
security of tenure in order to encourage construction and development.
Ownership is a sometimes thing, and is valid only as long as the
property tax is paid.
The property tax not only raises funds, but insures sharing. Here in
WV we dont do a very good job of land sharing. Our land tax rate
is one of the two lowest in America. Mississippi is the other. Low
land taxes encourages investment, and hoarding, not sharing. There are
land owners here in WV who own scores of acres, far more than they can
The property tax is two very different taxes. The improvement tax,
based on the construction cost and probable sale value of the
building, ends up being a punishment for enterprise. The more you
improve, and the larger the building the higher are the taxes.
The land part of the property tax collects part of the annual site
rent. The tax bill presented to us is based on the sale price, reduced
to a 60% assessed value, then multiplied by the millage rate.
Many business district land owners and some farmers routinely deal
with the rent concept. They lease land to a tenant for an annual
payment, called rent.
Rental value is based totally on the market. Downtown Charleston
advantageous sites lease for $3.00 per square foot per year.
Manhattan, NYC, leases for $15.00 per square foot. My Lee District
acreage could bring $30.00 per acre (keep in mind an acre is 43,560
Rent, I like to call it site rent, also called economic rent or
ground rent, depends on the population around the site and their
economic activities. Rent is the social product of civilization. It
exists because people are there, growing, making, producing, trading,
Rent belongs to all of us. The study I gave to you recently shows
that only 9-22% of Calhoun Countys rent gets collected as a
property tax. And the 22% applies only to the village. The land owners
get to keep and/or capitalize the residue into sales prices.
Taxing rent has economic and moral ramifications. Highly taxed land
encourages its owner to make good use of the parcel so as to gain
income with which to pay the tax. Low taxed or untaxed sites plays no
part in economic development. This means little labor or capital
Our current recession has been coming on for 30 or more years. Since
WW2 taxation has been more and more based upon the production of labor
and capital, less on rent. Bill Moyers in his book, Moyers on
Democracy especially chapters 13, 15, 16, and 18, points out the
growing discrepancy between a rich class and the rest of us.
Pres. Obama, most politicians, and the media believes that consumer
spending determines economic production. They ignore the proper
sequence of production.
All wealth is a product of labor and capital on land using natural
resources. Unless a land owner approves, no production will take place
on his land. Obviously higher land taxation will drive owners to put
land to use.
Do I have to point out that basic land production results in all
other types of production tomato processing factories employ
workers for instance, who need food, clothing, transportation, health
care, education, computers, vacations, entertainment, and on and on.
It all starts with the earth.
Taxation of buildings, and the low taxation of land lies at the basis
of economic hard times.
Economic problems are human caused problems. They are capable of
solution by we humans.
You are in a good position to influence the Legislature to reform our
property tax system. Legislators seek issuesthere are no more
important issues than poverty, unemployment, out migration, slow
businesses. Our WV tax code was set up in 1932 for the welfare of land
owners. You can see economic problems right here in Calhoun Co. Vacant
former commercial-industrial buildings, run down housing, lots of
vacant houses, good land sites vacant, high unemployment, outmigration
for jobs, loss of population. You ran for this position in order to
solve problems. There are plenty of problems.