Earth Rights Democracy:
Public Finance Based on Early Christian Teachings
Alanna Hartzok
[A paper delivered at the Christianity and Human
Rights Conference held at Samford University, Birmingham, Alabama,
November 2004]
Earth Rights Democracy Public Finance based on Early Christian
Teachings
This paper makes a case for a new form of democracy based on human
rights to the earth as a birthright, linking this to the
Judeo-Christian Jubilee Justice tradition and Old and New Testament
teachings. It presents a tax fairness practical policy approach based
on the ethical stance of these teachings.
The United Nations Millennium Declaration was adopted by the world¹s
leaders at the Millennium Summit of the United Nations in 2000.
Secretary General Kofi Annan has said that the Declaration ³captured
the aspirations of the international community for the new century²
and spoke of a "world united by common values and striving with
renewed determination to achieve peace and decent standards of living
for every man, woman and child."[1]
All UN Member States pledged to achieve several Millennium
Development Goals by the year 2015, including (1) reduce by half the
proportion of people living on less than a dollar a day; (2) reduce by
half the proportion of people who suffer from hunger; and by 2020, (3)
achieve significant improvement in lives of at least 100 million slum
dwellers.
The basic framework for these goals was set forth in the Universal
Declaration of Human Rights, adopted by the UN General Assembly on
December 10, 1948. Article I states that "All human beings are
born free and equal in dignity and rights." Article 25 says that "Everyone
has the right to a standard of living adequate for the health and
well-being of himself and of his family, including food, clothing,
housing and medical care and necessary social services, and the right
to security in the event of unemployment, sickness, disability,
widowhood, old age or other lack of livelihood in circumstances beyond
his control."
The International Covenant on Economic, Social and Cultural Rights
was adopted and opened for signature, ratification and accession by
the General Assembly on December 16, 1966 and entered into force on
January 3, 1976. The Covenant proclaims these economic human rights,
among others: the right to wages sufficient to support a minimum
standard of living, to equal pay for equal work, and equal opportunity
for advancement. In addition, the Covenant forbids exploitation of
children, and requires all nations to cooperate to end world hunger.
Nearly every UN member state has signed and ratified this important
Covenant. The United States, Cambodia and Liberia have signed but not
ratified it. Our government, founded upon clearly articulated
political human rights, is floundering in the field of economic human
rights.
The US Census Bureau reports that the number of Americans living
below the poverty line jumped by 1.3 million to 35.9 million or 12.5
percent of the population last year. The latest U.S. Conference of
Mayors "Sodexho Hunger and Homelessness Survey" reports that
hunger and homelessness continue to rise in major American cities.[2]
More than 3.5 million people, or 1.25 percent of the US population,
are living in city streets or homeless shelters. The number of
homeless grew by around 19 percent in 2003 and 13 percent in 2002.
Twenty-three of the 25 surveyed cities reported that lack of
affordable housing was the leading cause of homelessness. Twenty
participating cities reported that unemployment and various employment
related problems were the leading causes of hunger.
There is a significant lack of decent affordable housing in the
United States. The growing gap between wage earnings and the cost of
housing leaves millions of families and individuals unable to make
ends meet. According to the National Low Income Housing Coalition,
families across the country would need to earn a "housing wage"
of $15.21 an hour, nearly three times the current minimum wage, to
afford a two-bedroom apartment at the average fair market rent.[3] In
states with median housing costs, a minimum wage worker would have to
work 89 hours each week to afford a two-bedroom apartment at 30% of
his or her income, which is the federal definition of affordable
housing.[4] Currently, five million rental households have "worst
case housing needs," which means that they pay more than half
their incomes for rent, live in severely substandard housing, or
both.[5]
Economic Research Service of the United States Department of
Agriculture released its annual report on household food security for
2002. It was no surprise given the recent increases in poverty that
hunger and food insecurity rose for the third year in a row. A food
insecure household is defined as a household which faces limited or
uncertain availability of food. In 2002, 34.9 million people lived in
households that were food insecure, 1.26 million more people than in
2001. This number includes 13.1 million children. The number of people
living in households where someone was hungry also increased by
300,000 to 9.3 million. About 567,000 kids lived in homes where
children were hungry, 100,000 more than the year before. The
prevalence of food insecurity rose from 10.7 percent in 2001 to 11.1
percent in 2002, and the prevalence of food insecurity with hunger
rose from 3.3 percent to 3.5 percent.[6]
The wealth gap is increasing in the US. According to the latest
Federal Reserve data, the top 1% of the population has $2 trillion
more wealth than the bottom 90 percent.
Perceptions of the causal factors of these statistics and the
suffering of so many who lack basic necessities in this wealthy
country are most often simplistic explanations -- these people lack
money and they lack money because they lack jobs or their wages are
too low, or housing costs are too high. For those concerned about the
growing wealth gap in America and worldwide, and the resultant
poverty, homelessness, hunger and food insecurity, the dilemma usually
bogs down into supply or demand side efforts to find solutions. But
the root cause is a deeper injustice.
The primary cause of the enormous and growing wealth gap is that the
land and natural resources of the earth are treated as if they are
mere market commodities from which a few are allowed to reap massive
private profits or hold land and resources out of use in anticipation
of future profits. Henry George, the great 19th century American
political economist and social philosopher, proposed a solution to a
problem that too few understood at the time and too few understand
today. Early Christian teachings drew upon deep wisdom teachings of
the Jubilee justice tradition when they addressed this problem. The
problem is the Land Problem.
The Land Problem takes two primary forms: land price escalation and
concentrated land ownership. As our system of economic development
proceeds, land values rise faster than wages increase, until
inevitably the price paid for access to land consumes increasing
amounts of a worker's wages. In classical economics, this dilemma is
called the "law of rent" and has been mostly ignored by
mainstream economists. The predictability of the "law of rent"
- that land values will continually rise - fuels frenzies of land
speculation and the inevitable bust that follows the boom. A recent
Fortune cover story informs us that there are big gains and huge risks
in housing speculation in about 30 predominantly coastal markets that
encompass 100 million people. Since 2000, home prices in New York,
Washington, and Boston have surged 56% to 61%. Prices jumped 58% in
Miami and Los Angeles and 76% in San Diego where the median home price
county-wide is $582,000. The gap between home prices and fundamentals
like job growth and incomes is greater than ever.[7]
The second form of the Land Problem is the fact that in most
countries, including the United States, a small minority of people own
and control a disproportionately large amount of land and natural
resources. Data suggests that about 3% of the population owns 95% of
the privately held land in the US. Less than 600 companies control 22%
of our private land, a land mass the size of Spain. Those same
companies land interests worldwide comprise a total area larger than
that of Europe -- almost 2 billion acres.[8]
In order to show that there was NO NEED for land reform in Central
America because our land in the US is even more concentrated in
ownership than Central America, Senator Jesse Helms read these facts
into the Congressional Record in 1981: In Florida, 1% owns 77% of the
land. Other states where the top 1% own over two-thirds of the land
are Maine, Arizona, California, Nevada, New Mexico, and Oregon.
A United Nations study of 83 countries showed that less than 5% of
rural landowners control three-quarters of the land. Other studies on
land ownership report these facts: In Brazil, 2% of landowners hold
60% of the arable land while close to 70% of rural households have
little or none. Just 342 farm properties in Brazil cover 183,397
square miles -- an area larger than California. In Venezuela, 77% of
the farmland is owned by 3% of the people. In Spain, 70 per cent of
the land is owned by 0.2 per cent of the people. In Britain, 69 per
cent of the land is owned by 0.6 per cent of the population. Just
158,000 families own 41 million acres of land while 24 million
families live on four million acres.[9]
The basic human need for food and shelter requires access of labor to
land. With access to land people can produce the basic requirements of
life. Access to land provides an enabling environment for life itself
and thus meets the minimum requirement of love, meaning fairness in
human relations based on the fundamental equal right to exist. The
Land Problem in its two forms -- the inequitable ownership and control
of land and natural resources and the treatment of land as a market
commodity -- is the root cause of the great amount of human
deprivation and suffering from lack of the basic necessities of life.
And yet the human right to the earth is missing from the Bill of
Rights, the Universal Declaration of Human Rights, and the Covenant on
Economic, Social and Cultural Human Rights.
Democratic governance has not yet concerned itself with a "first
principle" question. This question concerns property rights in
land -- property rights in the earth itself. The question is, "Who
Should Own the Earth?" The question of "Who Should Own the
Earth?" is a fundamental question. In venues when this question
is asked, the answer is always the same. The answer is, "everyone
should own the earth and on an equal basis as a birthright."
The right to the earth has yet to be pronounced in human rights
covenants. Democracy is unclear, ethically weak, and on shaky ground
when it comes to the question of the right to the land and resources
of the earth. Democracy as presently constituted lacks this most
fundamental and basic human right -- the equal right to earth. The
right to the earth is the great undiscovered revolution in both
American and global politics.
Early Christian teachings on the Land Problem, however, were clear
and precise. The question of "Who Should Own the Earth?" was
unequivocally answered. The land ethic of the early Christian
communities was that of "koinonia" meaning essentially that
God was the sole owner of the earth which was given as a gift to all
for the "autarkeia," the self-reliant livelihood, of all. In
the words of John Chrysostom, Bishop of Constantinople at the close of
the fourth century, "The very air, earth, matter, are the
Creator's; and so are you yourself ...; and all other things also."
When Christianity became the state religion of the Roman empire, the
early Christian teachings on land were overtaken by the Roman land
laws of "dominium" -- a legalization of property in land
originally obtained by conquest and plunder. A largely corrupted
Christianity, uprooted from its early teachings on land ownership, too
often went hand in hand with the exploitation and degradation of
centuries of colonial conquests. A statement by the great South
African Archbishop Desmond Tutu addressed this point in a succinct and
profound manner. He said, "When the missionaries came to Africa
they had the Bible and we had the land."
They said "Let us pray." We closed our eyes. When we opened
them we had the Bible and they had the land.[10]
Charles Avila, in his profoundly important book entitled Ownership:
Early Christian Teachings, explored the early church fathers¹
view of property rights in land. He contrasted these teachings to
Roman property rights law. In his chapter on "The Concept of
Ownership" Avila states:
The concentration of property in private hands began very early in
Rome and was indeed based on the foundational and legitimizing idea of
absolute and exclusive individual ownership in land. This was the same
idea which would come to form the basis of the slave-owning, the
feudal, and the capitalist (including the pseudo-socialist, or
state-capitalist) economic systems successively. Modern civilization
has not yet discarded this antiquated ownership concept, which was
originally derived from ancient Rome. In fact, it seems to us, this is
one of the main roots of the present global crisis, in which the rich
become richer because the poor become poorer.[11] Avila further noted
that ³the distinction in legal terminology between "real"
and "personal" property is the survival in words of an
ancient real distinction between property held in both theory and
practice as common by its very nature and property which was the fruit
of one¹s labor.[12] Avila said that modern social thinkers
... advocate the promotion of
social justice without stopping to think that individual ownership
of nature¹s bounty might be socially unjust in itself. And yet
patristic thought insisted long ago that there can be no real
justice, or abolition of poverty, if the koina, the common natural
elements of production, are appropriated in ownership by individuals.[13]
Here are a few Patristic period quotes on land ownership that Avila
compiled in his book:
Ambrose: How far, O ye rich, do
you push your mad desires? Shall ye alone dwell upon the earth? Why
do you cast out all the fellow sharers of nature and claim it all
for yourselves? The earth was made in common for all. Why do you
arrogate to yourselves, exclusive right to the soil?
St. George the Great (Pope 590 - 604) rebuked the Romans when he
said: They wrongfully think they are innocent who claim for themselves
the common gift of God.
Clement of Alexandria: (The functions of property) -"to be
shared," "to minister to" and serve "the welfare
of all"; "not for personal advantage as being entirely one's
own" but "for those in need"; "to achieve
autarkeia" and "to foster koinonia" -- constitute the
very essence of Clement's view of property.
St. John Chrystostom: God in the beginning did not make one man rich
and another poor; nor did he afterwards take and show to anyone
treasures of gold, and deny to the others the right of searching for
it; rather he left the earth free to all alike. Why then, if it is
common, have you so many acres of land, while your neighbor has not a
portion of it?
Augustine: He (according to Avila¹s research) saw that the poor
are poor because they have been deprived by the propertied few of the
wealth that should belong to all. He laid the blame for this unjust
situation squarely on the doorstep of an absolutist and exclusivist
legal right of private ownership. He reminded his audience that they
were all "made from one mud" and sustained "on one
earth" under the same natural conditions, having the same essence
and called to the same destiny. He rejected the legalized status quo
as inappropriate for human living. Holding that legal arrangements of
property rights were of human origin, he asserted that they should be
changed, in theory and in practice, in function of a faith-informed
ethic based on the true meaning of ownership.
Basil the Great: He saw that a privileged few were exceedingly rich,
ostentatious, and powerful, inasmuch as wealth, particularly the
wealth-producing resource, land, was concentrated in the hands of the
few. He taught a philosophy of ownership based on the view that God
was Father and giver and Provider for all, and that therefore a few
must cease stealing the food-producing resources that God had destined
for the use of all.
Basil admits a certain right of laborers to the product of their
labor but asks the landlords by what right they exercise ownership
over their vast estates: "Which things, tell me, are yours?
Whence have you brought them into being?" Whatever you have
produced, or brought into being, may justly be yours. However, it is
land that has made the landlords rich, and land is not something they
have brought into being.² Speaking to the rich Basil said:
You are like one occupying a
place in a theatre, who should prohibit others from entering,
treating that as one¹s own which was designed for the common
use of all. ...If each one would take that which is sufficient for
one¹s needs, leaving what is in excess to those in distress, no
one would be rich, no one poor. Did you not come naked from the
womb? Will you not return naked into the earth?[14]
Jesus pointed to Old Testament teachings regarding land ethics.
According to some contemporary theologians, one of the tasks of the
mission of Jesus was to restore the original intent of the Jubilee. In
Luke 4:18 (by way of Isaiah 61:1-3): He has anointed me to preach good
news to the poor.. to proclaim release of captives.. To set at liberty
those who are oppressed, to proclaim the acceptable year of the Lord.
As theologian Walter Brueggeman explains in Land: The Foundation
of Humanness[15], the "acceptable year" is the year of
the Jubilee when the land was to be returned to the original holders.
The "release of captives" is the release of debt slaves who
had lost their land because they could not pay the mortgage. A crucial
aspect of Jesus¹ mission was the reassertion of the land rights
of the poor and displaced.
The early Christian land ethic echoed Old Testament teachings
concerning land rights. Hear these voices anew:
The land must not be sold beyond reclaim, for the land
is Mine; you are but strangers resident with me. - Lev. 25:23
The profit of the earth is for all. - Eccles. 5:9
Woe unto them that join house to house, that lay field to field,
till there be no place. - Isaiah 5:8
Restore, I pray you, to them even this day, their lands, their
vineyards, their olive yards, and their houses. - Nehemiah 5:11
During the 15th century and several centuries thereafter, the "commons"
(land that had always been available for free use by the community)
were enclosed by the wealthy or powerful for private use only. This
accelerated the rise of the market economy, for without land, peasants
had to survive by their wits and their abilities to manufacture. The
emerging economy which used money as a primary medium of exchange
opened up an opportunity for the landless to acquire land -- they
could now buy it. But working to accumulate enough wealth to buy land,
instead of asserting an inherent human birthright to the earth, is
akin to a slave's saving enough money, by cleverness, skill and extra
hard effort, to buy him or herself into freedom.
We must not forget that mainstream institutionalized Christianity
once promulgated the doctrine that the right of some humans to hold
other humans as slaves was encoded in the Bible. After much struggle
and centuries of suffering, it gradually dawned on the majority of
people that slavery was unjust and it was abolished. A similar
awakening regarding the land problem lies in our future, hopefully the
near future. The vision for a just land ethic was held by several
great sages of our own recent history. Their statements could be
useful to us today.
Thomas Jefferson -- The earth is given as a
common stock for men to labor and live on.
Abraham Lincoln -- The land, the earth God gave
to man for his home, sustenance, and support, should never be the
possession of any man, corporation, society, or unfriendly
government, any more than the air or water, if as much. An
individual, company, or enterprise should hold no more than is
required for their home and sustenance. All that is not used should
be held for the free use of every family to make homesteads, and to
hold them as long as they are so occupied.
Henry George -- Our primary social adjustment is
a denial of justice. In allowing one man to own the land on which
and from which other men must live, we have made them his bondsmen
in a degree which increases as material progress goes on. This is
the subtle alchemy that in ways they do not realize is extracting
from the masses in every civilized country the fruits of their weary
toil; that is instituting a harder and more hopeless slavery in
place of that which has been destroyed; that is bringing political
despotism out of political freedom, and must soon transmute
democratic institutions into anarchy.
Avila, again in Ownership: Early Christian Teachings, wrote:
On first reading Henry George
(Progress and Poverty) almost twenty years ago when doing research
for this volume, I was particularly struck by the similarity of his
arguments, and even analogies, to those of the fourth century
Christian philosophers on the topic of land ownership.[16]
Henry George, the great American political economist and land rights
philosopher (1839-1897), eloquently confronted the enigma of the
wealth gap in his masterwork Progress and Poverty and set forth both
an ethical and practical method for holding and sharing the land as a
sacred trust for all. He made a clear distinction between property in
land and property in wealth produced by labor on land. He said that
private property in human made wealth belonged to the producer and
that the state should not tax wealth produced by human labor. George
said:
To abolish these taxes would be
to lift the whole enormous weight of taxation from productive
industry. The needle of the seamstress and the great manufactory;
the cart-horse and the locomotive; the fishing boat and the
steamship; the farmer's plow and the merchant's stock, would be
alike untaxed. All would be free to make or to save, to buy or to
sell, unfined by taxes, un-annoyed by the tax-gatherer. Instead of
saying to the producer, as it does now, "The more you add to
the general wealth the more shall you be taxed!" the state
would say to the producer, "Be as industrious, as thrifty, as
enterprising as you choose, you shall have your full reward! You
shall not be fined for making two blades of grass grow where one
grew before; you shall not be taxed for adding to the aggregate
wealth.[17]
In an economic system such as ours which uses money as a medium of
exchange, land and resources come to have monetary value. In asserting
that the gifts of nature are common property and should be equitably
shared by all, George saw that in a just society the ownership of land
and natural resources would be conditional upon the cash payment to
all of a fairly assessed tax, or land rent, for the exclusive right to
God's gifts. Thus the collection of land rent for the community as a
whole would replace the taxation of productive endeavors. Those with
more and/or better located land would pay more into the common fund,
while those with little or no land would pay much less or nothing at
all.
As George explained it:
... the value of land is at the
beginning of society nothing, but as society develops by the
increase of population and the advance of the arts, it becomes
greater and greater. In every civilized country, even the newest,
the value of the land taken as a whole is sufficient to bear the
entire expenses of government. In the better developed countries it
is much more than sufficient. Hence it will not be enough merely to
place all taxes upon the value of land. It will be necessary, where
rent exceeds the present governmental revenues, commensurately to
increase the amount demanded in taxation, and to continue this
increase as society progresses and rent advances.[18]
The author of Common Sense was onto the same idea when he said:
Men did not make the earth ...It is the value of the
improvement only, and not the earth itself, that is individual
property...Every proprietor owes to the community a ground rent for
the land which he holds. - Tom Paine
Enormous sums are currently accruing as unearned income to a
relatively few individuals, families and corporations who are holding
large amounts of land, very valuable and well-located land, and
natural resources as their own exclusive private property. These
enormous land values and resource rents are also accruing as unearned
income to banks holding mortgages based on exploitative compound
interest rates. It may be of interest to note that the word "mortgage"
means "dead hand." Truly, when one must work so many years
of ones life to pay off a mortgage, one productive hand is as if dead
in terms of producing for oneself, as the labor of that hand pays the
mortgage. For the 33% of citizens (40 million people) in the United
States who are renters, there is not even equity ownership to look
forward to after a life of labor. For the more than three million
homeless people in American and the multi-millions who are homeless
around the world, what Henry George said in 1879 holds true today:
Our primary social adjustment is
a denial of justice. In allowing one man to own the land on which
and from which other men must live, we have made them his bondsmen
in a degree which increases as material progress goes on.[19]
Not only is the land ethic of Old and New Testament prophets and
Henry George virtually the same, the policy approach of "resource
rent for revenue" also known as "land or site value taxation"
has its corollary in the approach called for by the ancient rabbis in
their discussions about the finer and little known details of Jubilee.
Talmudic rabbinical discussions considered how fairly to partition
the land of Canaan among the tribes under Joshua. Those with poorer
land were to be given more acreage and those with more fertile land
would be given less. As for land disadvantageously situated, the
adjustment was to be made by money; that is to say, those holding land
nearer the city (Jerusalem) should pay into the common treasury the
estimated excess of value pertaining to it by reason of its superior
situation, while those holding land of less value, by reason of its
distance from the city, would receive from the treasury a money
compensation. Upon the more valuable holdings was to be imposed a tax,
or lease fee, the measure of which was the excess of their respective
values over a given standard, and the fund thus created was to be paid
out in due proportions to those whose holdings were in less favorable
locations. In this, then we see affirmed the doctrine that natural
advantages are common property, and may not be diverted to private
gain.[20]
The early Christians were attacked and persecuted and the Christian
land justice teachings were undermined by Roman law. Similarly, there
was a great movement to discredit the teachings of Henry George. Pope
Leo XIII issued the Rerum Novarum Encyclical in 1891 which propounded
an exclusivist right to private property in land, exhorting those
without land to work harder, longer and smarter to save money from
which to buy land.[21] Money from vested interests poured into the
University of Chicago, Columbia University and other emerging schools
of economics to thwart and obscure the understanding and the solution
to the land problem and the wealth divide. Academics were paid to
undermine Georgist economics which had followed in the classical
tradition and to instead develop an approach to economics which
minimized the contribution of nature's gifts to the production
process. Land, the term in classical economics which denotes all gifts
of nature, was made a secondary factor, a mere subset of capital. The
two major factors became Labor and Capital. The intellectual crime of
the century -- the neoliberal economics paradigm - has predominated in
the field of economics ever since.[22]
Yet the truth of George¹s koinonia based economics endured
through the work of several schools, publishers and research
organizations established during the first half of the 20th century,
both in the US and worldwide. In 1949 this movement issued An
International Declaration on Individual and Common Rights to Land.[23]
The policy approach urged by Henry George and Thomas Paine as a way to
assure human rights to the earth¹s resources was successfully
implemented in part and to varying degrees in several places
throughout the world.
As a result of decades of steady education and promulgation, there
are now 18 municipalities in Pennsylvania which have adopted a
so-called split-rate property tax which shifts taxes away from
buildings and onto land according to site value. This approach is
based on the understanding that the property tax is actually two types
of taxes -- one upon building values, and the other upon land values.
This distinction is an important one, as these two types of taxes have
significantly different impacts on incentive motives and development
results. Decreasing the tax on buildings gives property owners the
incentive to build and to maintain and improve their properties. As
the levy on land values is increased, land speculation and poor land
utilization, an example being slum buildings and boarded up buildings,
are discouraged. The signal thus sent to property holders is to either
improve their properties or sell them to someone who can do so.
Either way, labor and capital gain access to land to improve and
augment the building stock. The tax incentives are harnessed correctly
to encourage effort directed to the provisioning of housing and other
basic human needs.[24]
Shifting the tax burden in this way discourages land hoarding and
encourages good land utilization. It promotes a more efficient use of
urban infrastructure (such as roads and sewers), decreases the
pressure towards urban sprawl (as there is significant infill
development), and assures a broader spread of the benefits of
development to the community as a whole.
Researchers have carefully recorded the number of building permits
issued in the three year period before and after the split-rate was
put in place. In every instance, the number of building permits
increased significantly after the implementation of this reform. As
the city improves, without the need for subsidies, the land values
gradually increase, thus providing the city with an increasing source
of revenue for public services. With this system, land values maintain
a natural correlation to the overall health of the city. Land values
do not peak and spike as they do under conditions which promote land
speculation and profiteering. As development stabilizes, land values
also stabilize. Thus it is possible to have a self-financing city with
citizens reaping the full rewards of their labor and creativity.
The experience with this form of taxation in the 18 municipalities of
Pennsylvania point towards the possibilities of a self-renewing city.
But until we greatly reduce or eliminate the burden of federal income
and payroll taxes and the billions of dollars of wasteful and
inequitable corporate subsidies, we will only have a partial
realization of the promise. Nonetheless, there is much we can learn
from the split-rate tax cities in Pennsylvania, upon several of which
we shall now focus.
Harrisburg, the capital of Pennsylvania, provides one of the best
examples of the benefits of shifting taxes away from labor and
productive capital and onto land according to site values.
In 1981 Harrisburg was listed as the second-most distressed city in
the nation under criteria used by the federal government. A review of
the gains made in effective economic development activities since then
has produced significant results, and the sharp reversal of nearly
three decades of previous serious decline. Beginning with the
implementation of the split-rate property tax and gradually increasing
the tax on land while decreasing the tax on buildings, Harrisburg has
sustained an economic resurgence that has garnered national acclaim.
It twice won the top United States community honor as All-American
City, along with the top state recognition from the state Chamber of
Business and Industry as Outstanding Community in Pennsylvania, all
because of Harrisburg's development initiatives and progress.
As of 2001, the value of taxable real estate was over $2.2 Billion,
versus $212 Million in 1982. Over 26,000 building permits were issued
from 1982 representing over $2.65 Billion in new investment. Even
adjusted for inflation, this is more than for any period since
Harrisburg became a municipality in the year 1791, with most of this
investment undertaken since 1990. There are over 5,500 businesses on
the city tax rolls in 2001 compared to 1,908 in 1981. The number of
vacant structures, over 5,500 in 1982, have been reduced by 85% to
less than 400. The crime rate has dropped 53% and fire rate has been
cut by 72%.[25]
Harrisburg Mayor Stephen Reed has written several letters to
officials of other cities telling them that the split-rate tax has
been a key to the remarkable renewal of his city.
The citizens of Allentown, the third largest city in Pennsylvania
with a population of 105,000, voted for the land value tax system in
1994 and it was instituted in 1996. The difference between the land
and building rates was expanded in each of the following four years.
Michael Rosenfeld, the executive director of that city's Redevelopment
Authority, says that the benefits of this tax approach are evident.
The value of both new commercial construction and of new residential
construction increased substantially after the shift to land value
taxation. Nearly three out of every four properties in Allentown saw
some sort of tax cut. Today, many of those properties have new or
better buildings on them, stabilizing the tax base to the point where
there has been no need for a tax increase in five years. The number of
building permits in Allentown has increased by 32% compared to the
three-year period before the land value tax reform.
Allentown and Bethlehem are both in eastern Pennsylvania and are
roughly comparable as to size and economy. In that Allentown adopted
this tax approach and Bethlehem did not, there was an opportunity to
compare the two. Allentown¹s new construction and renovation grew
by 82% in dollar value in the three years after it adopted two-rate
LVT as compared to the prior three years. Its new construction and
renovation grew 54% faster than Bethlehem¹s new construction and
renovation despite the infusion of much federal grant money into
Bethlehem (but not into Allentown) during 1997-99.[26]
The small cities of Washington and Monessen, both in southwestern
Pennsylvania, are roughly comparable as to size and economy. Monessen
has the common form of property tax which taxes building value
significantly more than land value. After Washington adopted the
split-rate tax in 1985, it saw its new construction and renovation
increase by 33% in dollar value following this tax reform as compared
to the prior three years. During the same time period, Monessen¹s
new construction and renovation decreased by 26%.[27]
Studies comparing Oil City, Pennsylvania, which shifted its tax base
starting in January 1989, with Franklin, a comparable neighbor
municipality, found that Oil City experienced a 58.2% increase in new
construction and renovation in the three years after it adopted a
two-rate property tax as compared to the three years before, whereas
Franklin experienced a 12.2% decline during the same time periods.[28]
In 1995, Professor Nicholas Tideman, the Chairman of the Economics
Dept. at Virginia Tech University and his then-graduate student,
Florenz Plassman, now a professor at the University of Binghamton,
N.Y. completed a highly technical, peer reviewed study of land value
taxation in Pennsylvania. To quote from the conclusion of their study:
"The results say that for all four categories of construction, an
increase in the effective tax differential is associated with an
increase in the average value per permit. In the case of residential
housing, a 1% increase in the effective tax differential is associated
with a 12% increase in the average value per unit. From the
perspective of economic theory, it is not at all surprising that when
taxes are taken off of buildings, people build more valuable
buildings. But it is nice to see the numbers."[29]
Dr. Steven B. Cord has done an exhaustive review of 237 studies of
land value taxation from all over the world. In every instance there
was an increase in construction and renovation after the policy was
enacted, indicating that there were previously unmet needs for housing
and other living and working space.[30]
A meticulous study conducted by Dr. Mason Gaffney entitled "Rising
Inequality and Falling Property Tax Rates"[31] refutes the common
belief that property tax relief would be good for farmers. His
research showed that property tax relief for agricultural land
increases the likelihood that it will attract those looking primarily
for tax shelters and speculative investments. Such nonproductive
incentives ultimately inflate land values overall, making it
increasingly difficult for working farmers to access and maintain
acreage for viable agricultural enterprise.
The high price of land means that the modern food and agriculture
system provides no options for those who cannot find a paying job
other than subsistence on charity or government supports. Those with
minimum wage incomes are finding it increasingly difficult to afford
decent housing. These social problems and pressures are bound to
increase with the cut-off of welfare and other government subsidies to
the poor.
Intensively managed small farms and well-designed ecological villages
could produce a diverse range of food, fiber, livestock, and energy
products for local markets. Bio-intensive farming methods depending on
renewable energy sources can yield both social and environmental
stability. The establishment of labor and bio-intensive small farming
operations can be greatly furthered by land value tax policies which
remove taxes on labor and productive capital while promoting
affordable land access.
A shift to land value taxation will likely have the following
benefits in the rural area:
- Discourage speculation in land
- Reduce the price of land to equate with its value for
production
- Enable new entrants to more easily obtain land
- Limit farm sizes to those of the most productive units
- Enable the reduction of taxation on earnings and capital
- Reduce interest rates as land became more affordable
- Prevent rural depopulation
- Encourage owner-occupation rather than absentee ownership
- Promote more responsible use of land
- Promote a rural renaissance.[32]
The success of the Wright Act is an example of how properly
implemented land based taxes can promote a rural renaissance. This
legislation, passed by California in 1887, allowed communities to vote
to create irrigation districts for the building of dams and canals and
to pay for them by taxing the increase in land value. Once irrigated,
land was too valuable for grazing and too costly for hoarding. So
cattlemen sold fields to farmers at prices the farmers could afford.
In ten years the Central Valley was transformed into over 7,000
independent farms. Over the next few decades, vast tracts of treeless,
semi-arid plains became the "bread basket of America" and
one of the most productive areas on earth. It is a prime example of
how land value taxation can promote and enhance the viability of both
an efficient and equitable agricultural base - without government
subsidy.
This equitable and successful public finance approach was eventually
undermined by private banking institutions. Now taxpayers nationwide
subsidize the irrigation needs of agribusiness. Self-financing
development projects reduce the necessity for debt finance, so do not
contribute to the profits of rent-seeking institutions. These
exploitative institutions which concentrate wealth in the hands of the
few will continue to sabotage this policy approach until sufficient
numbers of people have a better understanding of the land ethic of
koinonia and this fundamental approach to securing the human right to
the earth.
One of the best examples of the beneficial results of an ethic of
koinonia in natural resources is to be found in the state of Alaska
where an earth rights constitution gives ownership of the oil
and other natural resources of the state to the citizens of Alaska on
an equal basis. The Alaska Permanent Fund invests the state¹s oil
resource rents, the interest from which funds cash dividend payments
directly to all adults and children resident in the state at least one
year.
The Permanent Fund ended fiscal year 2004 on June 30 with a 14.1
percent return and a total value of more than $27.4 billion, according
to currently available Alaska Permanent Fund Corporation figures. More
than $24,000 per person have been distributed to citizens of Alaska
since 1982. Note that Alaska is the only state in the US wherein the
wealth gap has decreased during recent decades.[33]
The Alaska Permanent Fund is an innovative and important model of
resource rents for citizen dividends, but with worldwide oil
production nearing peak, it is the opinion of this writer that oil
resource rents had best be directed to the development of renewable
energy technologies. The electromagnetic spectrum, geo-orbital zones,
and surface land values would be a more appropriate source of rent
distribution as citizen dividend payments.
Had the land problem been addressed in the south after the Civil War,
a more equitable distribution of wealth and overall prosperity would
have been the likely result. It can be instructive to review this
earlier effort to secure land rights in America.
On March 3, 1865, just weeks before the end of the Civil War and
almost a year prior to the ratification of the 13th Amendment, the
Freedmen's Bureau was created by Congress. According to Section 4 of
the First Freedmen's Bureau Act, this agency
shall have authority to set apart for use of loyal
refugees and freedmen such tracts of land within the insurrectionary
states as shall have been abandoned or to which the United States
shall have acquired title by confiscation or sale, or otherwise; and
to every male citizen, whether refugee or freedman, as aforesaid
there shall be assigned not more than forty acres of such land.
Introduced into Congress by Thaddeus Stevens this portion of the
Freedmen's Bureau Act was defeated by Congress on February 5, 1866 "by
a vote of 126 to 36."34 Lands which had been distributed to
freedmen were reclaimed and returned to the previous owners. There was
to be no land reform for the South. Northern industrialists feared
that giving land to freedmen and poor whites in the South could have
led to similar demands for land by the people in the North, which, if
implemented, would assuredly have greatly limited the supply of cheap
labor available for factory work in the industrial North.
Abraham Lincoln sounded a warning when he said in 1865:
Corporations have been enthroned. ...An era of
corruption in high places will follow and the money power will
endeavor to prolong its reign by working on the prejudices of the
people ... until wealth is aggregated in a few hands...and the
Republic is destroyed.
We live in yet another age of rapid privatization of the remaining
commons. The airwaves, also known as the electromagnetic or
radio-frequency spectrum, the most valuable resource of the
information economy, is being given away to huge media corporations.
Economists estimate that in the United States alone the commercial
value of access to it could be more than $750 billion. There is a rush
to patent plant material around the world. The attempt to patent
sections of the DNA code itself is but a modern expression of previous
centuries of enclosures.
The band-aid safety nets of the 1940s and 50s are unravelling and a
new Gilded Age is upon us. The wealth gap is growing. Wages for nearly
everyone have stagnated or are declining. Ever escalating land values
push housing prices beyond the capacity of millions to secure adequate
shelter. Worldwide, a billion people live in degrading destitution
lacking basic needs. Local conflicts and global wars are waged for
control of land and natural resources. Tax funds that could build a
world that works for everyone instead are being directed to
biochemical weapons research, building space laser weaponry, and
neo-colonial warfare.
It has been said that the only two certainties in life are death and
taxes and that the power to tax is the power to create or destroy. The
story of the birth of Jesus is on one level the story of a family on a
long and onerous journey to pay taxes imposed by the Romans upon the
people of the land. We urgently need to establish land tenure and tax
policies based on the deepest wisdom of the Judeo-Christian tradition
-- a truth based on the perception of the unity of life, that all is
created by God, and on the realization of the brotherhood and
sisterhood of the one humanity. The privilege of holding large amounts
of land or highly valuable land as individual private property needs
to be a conditional, not an absolute right. For justice to prevail,
the right to exclusive access to land must be granted only upon
payment of full and fairly assessed land value taxes and resource
rents.
We have at hand a powerful solution and a way to secure a world of
peace and plenty. We need to constitute democratic governance on the
firm foundation of equal rights to the land and resources of the
earth, an earth rights democracy which removes the burden of
taxes from the backs of those who labor and instead directs government
to collect the value of our common wealth for the benefit of all. A
morally correct form of taxation may not lead to everlasting life, but
it WILL promote and sustain the conditions for lives worth living on
planet earth.
ADDENDUM
Episcopalian:
People without land or without any control over the value of land
lack security in a major dimension of their lives. -- National Bishops
General Convention, Action Proposal for Economic Justice, 2/22/88
A great deal of what is amiss alike in rural and in urban areas could
be remedied by the taxation of the value of sites as distinct from the
buildings erected upon them. -- William Temple, a former Archbishop of
Canterbury, in Christianity and Social Order
Equity insists that we cease levying taxes on the fruits of human
toil, and make the monopoly value of land be the exclusive basis of
taxation. -- Episcopal Bishop C.D. Williams
Methodist:
All creation is the Lord's and we are responsible for the ways in
which we use and abuse it. We believe that Christian faith denies to
any person or group of persons exclusive and arbitrary control of any
other part of the created universe.
Catholic:
The land is a gift of the Creator to all men and therefore its
richness cannot be distributed among a limited number of people while
others are excluded from its benefits. - Pope John Paul II, Bahia
Blanca, Brazil, 1986
God intended the earth and all things in it for the use of all
peoples, in such a way that the goods of creation should abound
equitably in the hands of all, according to the dictate of justice,
which is inseparable from charity. -- Pastoral Constitution on the
Church in the Modern World, Vatican II
The right of land ownership and of free bargaining in land are
subordinated to the fundamental right of man to obtain the necessities
of life. In the force of the fundamental claim of the Commonwealth
there is no unconditional right of land ownership. -- Pope Paul VI,
Populorum Progressio, 1967
Every man, as a living being gifted with reason, has in fact from
nature the fundamental right to make use of the material goods of the
earth. -- Pope Pius XII
Relevant Quotes:
The problems that exist in the world today cannot be solved by the
level of thinking that created them. -- Albert Einstein
The minority, the ruling class at present, has the schools and press,
usually the Church as well, under its thumb. This enables it to
organize and sway the emotions of the masses, and make its tool of
them. -- Albert Einstein
"What the public wants is called 'politically unrealistic.'
Translated into English, that means power and privilege are opposed to
it." -- Noam Chomsky
"The greatest triumphs of propaganda have been accomplished, not
by doing something, but by refraining from doing. Great is truth, but
still greater, from a practical point of view, is silence about truth."
-- Aldous Huxley
True compassion is more than flinging a coin to a begger; it
understands that an edifice which produces beggars needs
restructuring. A true revolution of values will soon look uneasily on
the glaring contrast of poverty and wealth. -- Martin Luther King
An intelligent approach to the problems of poverty and racism will
cause us to see the words of the Psalmist -- "The earth is the
Lord¹s and the fullness thereof" -- are still a judgment
upon our use and abuse of the wealth and resources with which we have
been endowed. -- Martin Luther King
AN INTERNATIONAL DECLARATION ON INDIVIDUAL AND COMMON RIGHTS TO
LAND
We hereby declare that the earth is the common heritage of all and
that all people have natural and equal righs to the land of the
planet. By the term "land" is meant all natural resources.
Subject always to these natural and equal rights in land and to this
common ownership, individuals can and should enjoy certain subsidiary
rights in land. These rights properly enjoyed by individuals are:
1. The right to secure exclusive occupation of land
2. The right to exclusive use of land occupied.
3. The right to the free transfer of land according to the laws of
the country.
4. The right to transmit land by inheritance.
These individual rights do not include:
1. The right to use land in a manner contrary to the common good of
all, e.g., in such a manner as to destroy or impair the common
heritage.
2. The right to appropriate what economists call the Economic Rent of
land.
The Economic Rent is the annual value attaching to the land alone
apart from any improvements thereon created by labor. This value is
created by the existence of and the functioning of the whole community
wherein the individual lives and is in justice the property of the
community. To allow this value to be appropriated by individuals
enables land to be used not only for the production of wealth but as
an instrument of oppression of human by human leading to severe social
consequences which are everywhere evident.
All humans have natural and equal rights in land. Those rights may be
exercised in two ways:
1. By holding land as individuals and/or
2. Sharing in the common use of the Economic Rent of land.
The Economic Rent of land can be collected for the use of the
community by methods similar to those by which real estate taxes are
now collected. That is what is meant by the policy of Land Value
Taxation. Were this community created land value collected, the many
taxes which impede the production of wealth and limit purchasing power
could be abolished.
The exercise of both common and individual rights in land is
essential to a society based on justice. But the rights of individuals
in natural resources are limited by the just rights of the community.
Denying the existence of common rights in land creates a condition of
society wherein the exercise of individual rights becomes impossible
for the great mass of the people.
WE THEREFORE DECLARE THAT THE EARTH IS THE BIRTHRIGHT OF ALL PEOPLE.
Originally composed and declared at a meeting of the International
Union for Land Value Taxation held in 1949.
URL: http://www.earthrights.net/docs/declaration.html
|