A friend in the UK gave me permission to share his post here. You might explore Winston Churchill’s writings on the subject, entitled “The People’s Land” at wealthandwant.com/docs/Churchill_TPL.html. I’m on the fly today, and didn’t copy in Jock’s links. You might want to go to his original to pursue them!

http://jockcoats.me/peoples_budget_day

People’s Budget Day tagged with: * Land Value Tax * 1909 * common birthright * economic liberalism * geo-libertarian * Henry George * house of lords * liberalism * lloyd-george * Revolutionary Liberalism * tax * welfare state

Just a brief post to recall that today, 29th April, is the hundredth anniversary of David Lloyd-George’s 1909 “People’s Budget”. Thanks to the wonders of the interwebs you can now read the whole budget online.

He ended (the main section - in the “Balance Sheet” section) with these words which have stood for a century accusing his successors of all parties for not having solved the problems he set out on the road to do:

“This, Mr. Emmott [in the chair of the Ways and Means Committee to which the budget was addressed], is a War Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away we shall have advanced a great step towards that good time when poverty and wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests.”

From the financing of the newly created Old Age Pension and Disability insurance to the funding of the preparations for real war in the form of spending on Dreadnought battleships there was much for Lloyd-George to find in his budget. He didn’t miss a trick, and more or less anything that could conceivably be taxed was, in many cases for the first time, taxed.

But for many of us it is for what ended up not being taxed that this budget is most remembered. The debate surrounding this budget, with speeches up and down the country by Lloyd-George himself and more notably perhaps Winston Churchill, must be one of the best documented in history, for it was a first attempt to implement some permanent form of Land Value Taxation. A tax shift that Churchill described as:

“the new attitude of the State towards wealth. Formerly the only question of the tax-gatherer was, “How much have you got?” We ask that question still, and there is a general feeling, recognised as just by all parties, that the rate of taxation should be greater for large incomes than for small. As to how much greater, parties are no doubt in dispute. But now a new question has arisen. We do not only ask today, “How much have you got?” we also ask, “How did you get it?

  • Did you earn it by yourself, or has it just been left you by others?
  • Was it gained by processes which are in themselves beneficial to the community in general, or was it gained by processes which have done no good to any one, but only harm?
  • Was it gained by the enterprise and capacity necessary to found a business, or merely by squeezing and bleeding the owner and founder of the business?
  • Was it gained by supplying the capital which industry needs, or by denying, except at an extortionate price, the land which industry requires?
  • Was it derived from active reproductive processes, or merely by squatting on some piece of necessary land till enterprise and labour, and national interests and municipal interests, had to buy you out at fifty times the agricultural value?
  • Was it gained from opening new minerals to the service of man, or by drawing a mining royalty from the toil and adventure of others?
  • **Was it gained by the curious process of using political influence to convert an annual licence into a practical freehold and thereby pocketing a monopoly value which properly belongs to the State — how did you get it?”That is the new question which has been postulated and which is vibrating in penetrating repetition through the land.”

When at last the Finance Bill of 1909 was rejected by the House of Lords (an action that led directly to two General Elections and the eventual imposition of curbs on the Upper House’s power in the form of the Parliament Act 1911) Richard Cobden’s comments in the Corn Laws debates in 1845 had come to its most extreme conclusion:

“For a period of one hundred fifty years after the [Norman] Conquest, the whole of the revenue of the country was derived from the land. During the next one hundred and fifty years it yielded nineteen-twentieths of the revenue. For the next century down to the reign of Richard III it was nine-tenths. During the next seventy years to the time of Mary it fell to about three-fourths. From this time to the end of the Commonwealth, land appeared to have yielded one half of the revenue. Down to the reign of Anne it was one-fourth. In the reign of George III it was one-sixth. For the first thirty years of his reign the land yielded one-seventh of the revenue. From 1793 to 1816 (during the period of the land tax), land contributed one-ninth, from which time to the present [1845] one-twenty-fifth only has been derived from the land. …Thus, the land which anciently paid the whole of taxation paid now only a fraction. …The people had fared better under the despotic monarchs than when the power of the state had fallen into the hands of a landed oligarchy who had first exempted themselves from taxation, and next claimed compensation for themselves by a corn law for their heavy and peculiar burdens.”

The course of that “implacable war against poverty and squalidness” was set and as we know today, continues now and will continue until we learn to stop taxing production and honestly gained incomes and start instead to undermine the fundamental inequities of the economic system that traps so many in inescapable poverty, as people like Lloyd-George, Churchill, J S Mill, Henry George, and many of the individualist anarchists of the nineteenth century, like Benjamin Tucker knew only too well.

A century is long enough - real poverty reduction will never be achieved by redistributing the power of real economic growth but in eradicating these fundamental inequities that prevent people from bettering themselves. Alistair Darling, you have no hope of matching Lloyd-George. Learn from them, or give it up!

LVTfan here: see Michael Kinsley, in the WaPo, quoted (below) at http://lvtfan.typepad.com/lvtfans_blog/2009/04/michael-kinsley—the-senates-estate-tax-debate.html which says, in part:

Perusing the Forbes 400 list of America’s richest people, it’s striking how few of them made the list by building the proverbial better mousetrap. The most common route to gargantuan wealth, like the route to smaller piles, remains inheritance. The ability to pass money along to your kids may motivate many a successful executive or investor to work harder, but it can’t possibly motivate those kids to inherit harder in order to pass it along once again.

Dozens of Forbes 400 fortunes derive from the rising value of land or other natural resources. These businesses are fundamentally different from mousetrap building. Land does not need to become “better” to increase in value, and that value increase doesn’t produce more land.