Link: Tax Analysts: The Price of Civilization.

Bravo! Both to David Cay Johnston and to Tax Analysts, for making him a regular columnist there. I hope that DCJ’s work will remain available to us ordinary mortals who aren’t subscribers to Tax Notes. Yes, getting the conversations going among legislative aides and academics is important – but so is reaching the public, and I hope TA will choose to do both, with this particular column!

The third paragraph says

Our national debate on tax, such as it is, suffers from “experts” who typically know little to nothing of the history, practical rationale, moral basis, or economic benefits of tax. Their expertise is in delivering memorized talking points, not imparting understanding.

I hope DCJ will keep bringing us back to those four aspects:

  • tax history
  • practical rationale
  • moral basis and
  • economic benefits .

A clear-eyed study of them will, I believe, lead most “consecutive thinkers*” to the same conclusion I’ve reached, that Land Value Taxation – in all its manifestations – is the primary tax we should be relying on, and that doing so will allow us to reduce our reliance on the taxes which damage the economy, take from producers that which they produce, reduce wages, reduce opportunity, produce less housing than we need, produce sprawl, etc.

* see the bottom of this post for the reference

He goes on to say,

The purpose of this column is to challenge and provoke readers, to stimulate them to think deeply about how we distribute the burdens and the benefits of government. The hope is to encourage the reader to question what he believes and to ponder what could be, whether it is thinking inside the box or out, but never just checking the box.

I’m in favor of all that, and hope that the first “thinking box” he will attempt to get us out of is the income tax box, particularly the wage tax box – and that he will rapidly take his readers through the injustices and burdens that the FairTax box imposes on the economy and particularly the bottom 90% or so of the income and wealth spectrums.

He continues,

Each reader here has the power to help fulfill the noble promise of the Framers, who in the preamble to our Constitution laid out six purposes for the nation: society, justice, peace, security, commonwealth, and freedom.

I think he is laying out a right set of criteria. His audience is people who spend their days thinking about taxes; I hope that they are wearing the “how do we make America better for all” hat, and not the “how do we perpetuate the tax industry as it is currently configured” hat.

He goes on to make some excellent points:

Those politicians in both parties who understand that our system of taxation needs to be modernized and who want improvement are confronted with two numbers that inhibit any real change.

The numbers are 37.6 and 1970.

The first number is the median age of Americans today. The second number is the year when Washington lost its discipline on matching taxing to spending. Since 1970 half of Americans have been born – and the federal budget has been balanced only twice, during the last two years of the Clinton administration.

The reason the national median age of 37.6 is a problem has to do with experience. Few people develop a political and economic awareness before they are in their late teens or twenties. That means everyone born since 1960 has known only the antitax policies of Ronald Reagan and all three presidents who followed.

Half of Americans have lived only in an era when taxes were demonized. Taxes bad, any tax cut good. And budget deficits? To them, isn’t that the way it has always been?

and he concludes with

Americans who were not adults before 1970 – 2 out of 3 of us – have no practical experience with the idea that taxes can foster economic growth and build the commonwealth. And without government, there is no wealth, no peace, no security, and no justice.

Fewer still grasp how our tax system is throwing sand in the gears of commerce, when it could be greasing them. And very few grasp how corporate taxes favor multinationals over domestic firms.

I look forward to his explorations, and hope to hear them widely discussed. Readers of this blog know what conclusions I think are most logical from the assumptions he has laid out. I will be curious to see what conclusions he reaches, and whether his logic is similar to mine.

The ideas of Henry George can provide a great deal of 21st century illumination of the topics he is taking on.

*Consecutive thought:

The truth is self-evident. Put to any one capable of consecutive thought this question:

“Suppose there should arise from the English Channel or the German Ocean a no man’s land on which common labor to an unlimited amount should be able to make thirty shillings a day and which should remain unappropriated and of free access, like the commons which once comprised so large a part of English soil. What would be the effect upon wages in England?”

He would at once tell you that common wages throughout England must soon increase to thirty shillings a day.

And in response to another question, “What would be the effect on rents?” he would at a moment’s reflection say that rents must necessarily fall; and if he thought out the next step he would tell you that all this would happen without any very large part of English labor being diverted to the new natural opportunities, or the forms and direction of industry being much changed; only that kind of production being abandoned which now yields to labor and to landlord together less than labor could secure on the new opportunities. The great rise in wages would be at the expense of rent.

Take now the same man or another — some hardheaded business man, who has no theories, but knows how to make money. Say to him: “Here is a little village; in ten years it will be a great city — in ten years the railroad will have taken the place of the stage coach, the electric light of the candle; it will abound with all the machinery and improvements that so enormously multiply the effective power of labor. Will, in ten years, interest be any higher?”

He will tell you, “No!”

“Will the wages of common labor be any higher; will it be easier for a man who has nothing but his labor to make an independent living?”

He will tell you, “No; the wages of common labor will not be any higher; on the contrary, all the chances are that they will be lower; it will not be easier for the mere laborer to make an independent living; the chances are that it will be harder.”

“What, then, will be higher?”

“Rent; the value of land. Go, get yourself a piece of ground, and hold possession.”

And if, under such circumstances, you take his advice, you need do nothing more. You may sit down and smoke your pipe; you may lie around like the lazzaroni of Naples or the leperos of Mexico; you may go up in a balloon, or down a hole in the ground; and without doing one stroke of work, without adding one iota to the wealth of the community, in ten years you will be rich! In the new city you may have a luxurious mansion; but among its public buildings will be an almshouse.

to which I’ll add that THIS is what Mark Twain was referring to when he said “Buy land. They aren’t making any more of it.” But not just any land will do; rather, it must be land where population is increasing and where public investment will be high. The passage comes from Henry George’s book Progress & Poverty. Let’s think consecutively. Let’s enact the tax reform which harnesses the effects of this law of economics for the common good, rather than to continuing to enrich “God’s eldest sons.”

Happy 4th of July, friends! Liberty and justice for all.