Since we are somewhere in a recession, maybe the beginning, maybe the middle, maybe the end, it's important that we try to find out what is going wrong. Most people say it's the lack of regulation of the banking and financial markets that have allowed a few to profit at the expense of the many.
I believe that the problem is that we don't differentiate between the wealth that we've earned (the fruits of our work) and the wealth that God/Nature has given us as a society.
Some others have done a lot of work in this regard and you can find their efforts online at:
http://www.progress.org
http://www.whatwouldjesustax.com/
http://www.wealthandwant.com
We know that if something is taxed, it will be reduced: if we tax beer, beer sales will go down. In the same way if we tax work, wages and employment will go down.
If we tax land, the amount of land does not go down, but the demand for it will go down, because only those who want to use it will buy it, land speculators will not want it. If that happens, the purchase price of land will go down, by the law of supply and demand. The purchase price goes down because speculators (those who believe they can profit from the ride up the bubble) don't bid up the price so high.
This makes housing more affordable.
Untaxing work means that workers' wages are higher and that employers are motivated to create more jobs.
(to be continued)
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Joe,
ReplyDeleteI agree, respecting everyone's right to natural resources is a Christian imperative.
If a mutual friend gave us a basketball and said, "This is a gift for you and Joe," and I took it for myself without compensating you, that's stealing. So when the bible says the earth is God's gift to humankind (Genesis 1:26), yet some are deprived of its use without compensation, how that different from theft?
When we tax something that humans create, we get less of it; we discourage production, we reduce demand.
ReplyDeleteWhen we tax the value of something which is already here and fixed in supply, we get better use of it, and we reduce the price of it, because title comes with a carrying cost.
So instead of paying the seller for something he didn't create AND then paying taxes on our wages and purchases and buildings and land, we pay a higher land tax to our community and a lower purchase price to the seller.
And when someone who wants to build a spec house, he seems to maximize his profits when he puts on the lot a home designed to sell for about 4 times what he paid for the land. If we can lower the selling price of land, builders will be able to make their profit on more modest homes, which more of us can afford to buy, to furnish, to heat and cool, to maintain and to keep in good order. We should get fewer McMansions and more housing that fits the needs of average people and working people and retirees. And we get jobs, and homes with modern technologies, efficient heating and cooling and insulation and all that ... and when we stop taxing the buildings, we don't discourage investment in solar or geothermal or other smart technologies.
Seems like a win-win situation.