Downstream or Upstream

When we confront the multitude of problems that our country and our world face: Pollution, Unemployment, Homelessness and Lack of Affordable Housing, and Environmental Disasters, for instance, there are two ways of trying to solve them: I call them Downstream and Upstream.

For instance, do we solve the problem of polluted rivers by trying to rid the rivers of pollutants after they get in the river by trying to cleanse the river downstream after it's polluted? or do we control the pollution of the river upstream by limiting the use of pollutants near that river? It would seem much more sensible to limit to control pollution before it gets to the river.

In the same way, we can tackle unemployment, or a least some of its results, by providing unemployment benefits after a person is unemployed. The would be trying to solve the problem downstream. Or we could change the tax system so that a person is not penalized with increased taxes when they work, or provide work. This would be an upstream solution.

With homelessness and lack a affordable housing, we can set up a means test, that is, an income or asset criterion, which would decide if a person would be eligible to receive a subsidy for housing, which would be collected from other people who do not meet this criterion. Those who are just on the other side of this criterion would have to contribute to this subsidy through taxes or other government mandates, either direct or indirect. A downstream solution. Or we could change our tax system so that it increases effective wages and lowers the land portion cost of housing. That would be an upstream solution.

The recent oil spill suggests that this could have been prevented by more controls over those who produce oil (upstream solution). The questions arise:

1. Who would appoint the watchers? Probably, whichever government is in office at the moment.
2. Would those who appoint the watchers be influenced by those who profit from lack of control? You can answer that one.

The alternative would be to reduce the demand for oil by eliminating the subsidies on driving, such as socialized parking (provided by the local governments, and mandated by local governments on those who want to provide jobs or housing. Also eliminating the exemption that motor vehicles and motor fuel have from paying sales tax here in North Carolina, and I presume in other states. Also, zoning which mandates that a certain size lot or house is the only one allowed in certain areas could be struck down. (Upstream solutions)

For all the aforementioned issues the solution of Land Value Taxation needs to be examined, especially in its long-term effects. References are available on this blog.

Introduction

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)