Social Justice: Time to Review Our Land Tax System
By Godfrey Dunkley
There has been a great search for justice throughout the ages and this has taken many forms. But what is justice?
The quality of a nation is governed by the application of justice in its many forms: This in turn is closely allied to individual freedom.
In South Africa the masses struggled for and won political freedom and the right to vote, but this has been a hollow victory as there is now, reportedly, more unemployment and poverty than there was before. Economic freedom and justice are still to be established. Unfortunately, most social work by organisations or individuals is directed at alleviating the symptoms, and this is very important, but there is little effort to understand and correct the basic causes of the problem. Without this understanding, the social problems will never be corrected! It is necessary for large numbers of people to realise that there are basic causes of unemployment and poverty with all its social ills and these partly relate to the present system of taxation, and can be corrected.
To the serious observer it will become obvious that much land lies idle for the want of affordable labour, whilst labour is idle for the want of access to affordable land on which to be employed or for self-employment. It is necessary to find ways of bringing the two together under conditions of economic and social justice. Changes in the tax system are essential.
Existing deadweight taxes increase the cost of labour, the cost of products and the cost of capital. At the same time the system encourages the hoarding of land out of use at little annual holding cost. Not only unemployment but also the lack of home ownership is becoming a major problem.
This is not a problem peculiar to South Africa. It is largely a worldwide phenomenon. The classical economists who understood this problem have been side tracked to suit the greed of those wealthy in land. The latter forms part of the rich who control education, including the neo-classical economists, the media and to a degree the government. The masses have been brainwashed to believe that unemployment and poverty are inevitable. The truth is cleverly hidden by complex economic jargon.
The truth is simple. Where there is complexity, look for error. Economic truth and justice have been distorted by hidden agendas that have turned economics into the dismal science. When the basic concepts of economic truth are clearly understood then it becomes a fascinating subject. Who has the courage to take the first step in this direction?
There is massive empirical data available to support these claims.
Revising tax can change the system. It requires that over a period of time all present taxes be progressively replaced by collecting an equivalent amount of revenue based on the potential annual rent of all land or assessed according to market value of land only, excluding improvements.
When taxes are reduced or eventually eliminated, an equivalent value goes back into land rent and expressed as increased market value. There will be more than enough rent or land value tax to support all levels of government and for improving the infrastructure. This in turn results in more revenue available.
Most people are already paying rent on land or interest on mortgage bonds in addition to the deadweight taxes. So why not pay the rent of land directly to government and be relieved of all present taxes?
It can be done with your aid!
There has been a great search for justice throughout the ages and this has taken many forms. But what is justice?
The quality of a nation is governed by the application of justice in its many forms: This in turn is closely allied to individual freedom.
In South Africa the masses struggled for and won political freedom and the right to vote, but this has been a hollow victory as there is now, reportedly, more unemployment and poverty than there was before. Economic freedom and justice are still to be established. Unfortunately, most social work by organisations or individuals is directed at alleviating the symptoms, and this is very important, but there is little effort to understand and correct the basic causes of the problem. Without this understanding, the social problems will never be corrected! It is necessary for large numbers of people to realise that there are basic causes of unemployment and poverty with all its social ills and these partly relate to the present system of taxation, and can be corrected.
To the serious observer it will become obvious that much land lies idle for the want of affordable labour, whilst labour is idle for the want of access to affordable land on which to be employed or for self-employment. It is necessary to find ways of bringing the two together under conditions of economic and social justice. Changes in the tax system are essential.
Existing deadweight taxes increase the cost of labour, the cost of products and the cost of capital. At the same time the system encourages the hoarding of land out of use at little annual holding cost. Not only unemployment but also the lack of home ownership is becoming a major problem.
This is not a problem peculiar to South Africa. It is largely a worldwide phenomenon. The classical economists who understood this problem have been side tracked to suit the greed of those wealthy in land. The latter forms part of the rich who control education, including the neo-classical economists, the media and to a degree the government. The masses have been brainwashed to believe that unemployment and poverty are inevitable. The truth is cleverly hidden by complex economic jargon.
The truth is simple. Where there is complexity, look for error. Economic truth and justice have been distorted by hidden agendas that have turned economics into the dismal science. When the basic concepts of economic truth are clearly understood then it becomes a fascinating subject. Who has the courage to take the first step in this direction?
There is massive empirical data available to support these claims.
Revising tax can change the system. It requires that over a period of time all present taxes be progressively replaced by collecting an equivalent amount of revenue based on the potential annual rent of all land or assessed according to market value of land only, excluding improvements.
When taxes are reduced or eventually eliminated, an equivalent value goes back into land rent and expressed as increased market value. There will be more than enough rent or land value tax to support all levels of government and for improving the infrastructure. This in turn results in more revenue available.
Most people are already paying rent on land or interest on mortgage bonds in addition to the deadweight taxes. So why not pay the rent of land directly to government and be relieved of all present taxes?
It can be done with your aid!
Godfrey Dunkley has studied and lectured on the subject of land economics and taxation for over 45 years. He has presented many papers both in RSA and at international conferences and had many articles published as well as being on radio talk shows. Dunkley had two terms as President of the International Union for Land Value Taxation, 1993 - 1997. He is author of the book " That All May Live - Guidelines Towards a Better Society" 1990, and booklet "Land Tenure; A Time Bomb Ticking in South Africa" 1991. Presently has a PowerPoint Presentation "Full Employment by a Change in Taxation." This is freely available here.
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Godfrey Dunkley.