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Mason Gaffney: Nonpoint Pollution: Tractable Solutions to Intractable Problems
The Special Challenge to Economic Thinking
The Search for Surrogates
Sources of Nonpoint Pollution
What Problems are Created?
What Problems are Unsolved by Excise Taxes on Surrogates?
The Case of Forestry
The Case of Urban Settlement
The Case of Agriculture
The Common Theme from Forest, City and Farm

The inadequacy of surrogate pollution taxation is exemplified by forestry.  The main purposes of watershed protection have long been to regulate water flows, to reduce flooding and erosion, and sustain flows during droughts.  Minimizing pesticide runoff is a worthy additional purpose, but not the sole one.   

Francisco Goya left hanging in The Prado two paintings of his beloved, La Maja Desnuda and La Maja Vestida.  Some prefer the earthy Desnuda.  When it comes to Mother Earth, however, she looks better Vestida in virgin verdure or some renewable replacement raiments.  Gaia theorists, indeed, regard the biosphere as an integral part of the whole terrestrial organism.

However you regard it, removing it is hazardous and damaging to the children of Earth.  Denuded land is the source of almost all forest runoff problems.  Erosion results from a combination of
  • logging roads (too many, too long, on land too steep);
  • clearcutting; and
  • slow replanting.   
Slow replanting is the central problem.  It slows the supply of second‑growth timber, and thus creates pressure to invade submarginal areas.  Foresters should harvest the low, flat, warm lands early and often because:
a) Regeneration is economical there, it pays for itself where trees grow fast;
b) Regeneration is fastest there, minimizing the exposure period of bare land;
c) Logging roads may be shorter and less erosive there, because nearer to markets and on level land;
d) The temporary loss of scenic beauty is less severe;
e) The exposed bare land is less steep;
f) Logging is cheaper and less destructive; selective logging is more feasible;
g) Fire control is easier;
h) Younger stands are more vigorous and naturally resistant to pests.  

The last point bears underscoring here.  It points to how good forest management can minimize pest damage without heavy reliance on toxics.  The spruce budworm, for example, wreaks damage mainly on trees weakened by age.  To protect those older trees, whole forests, millions of acres in the northeast are sprayed, with tragic treadmill results.   

The tussock‑moth, over which so much organochlorine has been shed in the fir forests, damages trees mainly on poor growing sites.   Trees on good sites withstand defoliation, green up, and grow with renewed vigor.  The moral: stay off the poor sites.  The method: utilize the good sites fully.

Why aren't the good sites harvested early, replanted quickly, and utilized fully?  One major reason lies in the tax system.   
a.  Replanting cost is not expensable for income tax, it must be capitalized, hence not written off until decades later when timber is harvested.  Timber taxation was not neglected, you may be sure, by Oregon Senator Packwood who shepherded through our most recent tax reform; but timber lobbies have deliberately traded this off to keep what they prize more, the capital gains treatment of timber sales.  
b.  Most states have substituted the yield tax for the property tax.  The result is a bias against early harvesting.  When you look at the whole system it also pushes cutting pressure out to marginal lands.  But a yield tax at a high rate wholly destroys any incentive to restock marginal lands, once cut: it makes them subeconomic to replant.  
c.  Some states have virtually eliminated the land value part of the property tax on timber, removing an incentive to early reforestation.  A tax based on land value continues at a steady level during the sterile downtime of land between harvest and replanting, thus pricking holders in the most compelling way to restock, while not taxing them at all for actually restocking.  On marginal land the tax base is zero (it being based on land value) so it does not cause abandonment, nor make replanting any less economic than it already is.  

d.  When timber is standing the value added by growth is partly unrecognized as taxable income.  Timber has been a "capital asset" for income tax purposes since 1944.  Not only is much of the gain unrecognized as income, but any tax is deferred until harvest.  After timber is felled, value-added in the mills and markets is "ordinary" income and bears the full fury of the tax rates.  

 When timber is standing there is no property tax, so it need only grow fast enough to pay interest on its value.  After it is cut it must yield a rate of return high enough to cover a property tax, too, not just on its stumpage value but also on the value‑added by harvesting, hauling, milling, shipping, storing, merchandising, and constructing.   

Thus the dual result of income and property taxes is to defer harvest, increasing the volume of old, disease‑prone timber standing on good land, and pushing logging pressure out to marginal lands.  Many marginal lands are non‑regenerable.  Logging there is simply mining, leaving La Tierra Desnuda and open to the elements indefinitely. 
Forestry on public lands, ironically, manifests similar biases, from a different set of incentives.  William Hyde, Marion Clawson and others have documented the pattern: undermanagement of superior sites accompanied by premature invasion of steep, remote sites as the Forest Service internalizes all its profits from timber sales to build more roads (and its empire).   

Both private and public forestry generate specialists with information monopolies which they use to obscure these issues and divert us with others.   

An optimal solution would constructively combine and synthesize two apparently contrary concepts of land stewardship.  
THESIS: Concept A says "Conserve for the future."   

ANTITHESIS: Concept B says "Stewardship means highest and best use."  Landholders are responsible to use land now, in order to employ others (generate incomes), to produce goods (combat inflation), and pay taxes (avoid deficits).   

SYNTHESIS: Concept AB says do both, but in different places.  Use the good lands intensively, grow timber early and often, thus relieve human pressure and help conserve the vulnerable, erosive lands.   

Until this is done, will optimal taxes on aerial sprays do much good?  Some good, no doubt.  But the main problems are deeper rooted and call for bolder measures.   

That is my basic message.  Forestry suffers from cutting sprawl, quite analogous to urban sprawl.  The center is neglected, so the action moves to submarginal fringes and damages what's left of the center.  Let us now look at two more cases, urban sprawl itself, and agricultural sprawl, where the source of problems is analogous, and the implied solutions the same.   ...    Read the whole article

Lindy Davies:   The Top Ten Reasons Why Land is More Important than Ever
The Georgist economic proposal insists on the primary importance of land as a factor in the economy. Many people dismiss that as a quaint, agrarian notion. "Perhaps," they scoff, "land was that significant back when most people had to work the soil for a living, but modern agriculture has moved far past that! Nowadays we deal with modern issues of technology, global markets, information -- land is no longer a big deal."
10. There's no place to dump your trash for free. ...
9. Scratch a financial crisis, find a real estate bubble. ...
8. Information (like railroads) needs routes. ...
7. Cities can no longer afford to be inefficient. ...
6. Global climate change is too likely to ignore. ...
5. The loss of biological diversity cannot be reversed. ...
4. Two out of every five people lack a safe and dependable source of drinking water. ...
3. The myth of overpopulation causes cultural sickness. ...
2. We have forgotten what nations are. ...
1. "The land shall not be sold forever, for ye are strangers and sojourners with Me." ...

Mason Gaffney: Two-Rate in Reverse
In 1955, Spiro Agnew was a Maryland State Assemblyman on the rise. He carried a new law that let tax assessors value farmland on its "use-value" as farmland, instead of market value. It let owners who were farming for unearned increments around Baltimore and D.C. hold out with low carrying costs. "Farmland" meant land used for farming, and any play at farming would qualify. Under this law, a relative of mine with 102 acres in Maryland near Western Avenue, the D.C. line, kept just two steers thereon to validate his farmland assessment status. Holding for the rise "never crossed his mind." Right -- except, whenever such land is condemned for public use, courts everywhere have held that compensation must be based on speculative market value. ...

It is not just peri-urban land speculators who gain. A large chunk of land value in rural regions is not based on cash flow from food and fiber, but on amenities. Wisconsin is a major playground for rich urbanites from nearby Chicago, Milwaukee, Minneapolis and St. Paul. "Use-value" assessment exempts this chunk of value completely, for use-value is based on capitalizing the net cash farm income from growing crops, and, in the Wisconsin law, specifically corn. The highest land values per capita in the State are in Vilas County up in the north woods, once dismissed as worthless "cutovers." Vilas' barren podzol soils are worthless for corn, but sparkling lakes bedizen the County. Values per capita in Vilas are 6 times those in Milwaukee. Rich recreationists and "investors" (read speculators) are gobbling up the "wild forties." Shoreline parcels are like diamonds among coal. ...

100 years ago, American Georgists made a big point that city land outvalues rural land many times over. One implication is that taxing city land is taxing the rich, and we can ignore farmland. Some land-taxers counsel that farmers are easily misled to oppose us, so leave them alone and convert the cities. But rich city folks also own choice rural lands.

  • The Hearst palace at San Simeon sits amid 82,000 manorial acres, including miles of prime shoreline, "improved" with just one home per 82,000 acres. This home, jammed with imported treasures, had become a white elephant even before Citizen Kane uttered his final "Rosebud." The heirs were glad to fob it off onto the taxpayers of California, deducting its alleged value from their taxable incomes, while they kept the 82,000 acres.
  • Craig McCaw, who made his billions by amassing spectrum licenses, turned some of the pile into a spread of many thousands of acres stretching north from Big Sur -- land he never got around to using.
  • The O'Neill families and Donald Bren of Orange County,
  • the Newhall family of Ventura County,
  • the Chandler family that owns the Tejon and Boswell empires that spread over several counties,
  • Ted Turner who owns over a million acres around the U.S.;
  • the Koch brothers of Kansas with all their oil wells,
  • the Kleberg tribe with their million-acre King Ranch in Texas;
  • the Southern Pacific Railroad (now Catellus Co.),
  • Standard Oil:
those are a few of the struggling family farmers whom use-value assessment of farmland saves from destitution.

The privilege of use-value assessment stretches even beyond farmlands, vast as they are. Timberland in most states gets the same preferred treatment, only better. About 1/3 of the privately owned land in the U.S. is in timber. In California, owners (mostly huge corporations) may put the land into the "TPZ" class. The standing timber is then exempt, and taxed only at harvest, at 2.9%, much too low a rate to make up for a 60-year lifetime of exemption. County assessors have to value the land separately on its putative value for growing timber, following a State-legislated formula that is tailored drastically to understate even that low value (California Revenue and Tax Code, Section 434.5). Much of that land, though, has alternative uses, e.g. for retirement and vacation homes and resorts, the outliers and pioneers of urban sprawl. There are also mineral values, hunting, fishing, rifle ranges, grazing, campsites, tourism, rights of way, lumber camps, loading sites, water sources, lakes, log storage, landings - there are many things to do with 1/3 of a nation's land. Those uses are all declared "compatible" with timber, hence land values derived therefrom are tax-exempt.  Read the whole article

Charles B. Fillebrown: A Catechism of Natural Taxation, from Principles of Natural Taxation (1917)

Q66. What has the single tax to say about the taxation of forest lands?
A. Perhaps the majority opinion would be to tax annually all forests old or new on what would be the value of the land if denuded of all growth -- a stumpage tax to be collected upon old growth timber when cut, but not upon new growth such as may be reasonably classed as a cultivated crop. ... read the whole article

Mason Gaffney: Property Tax: Biases and Reforms

Priority #1. Safeguarding the property tax
Priority #2: Enforce Good Laws
  • Reassess Land Frequently
  • Use the Building-Residual Method of Allocating Value
  • Federal Income Taxes
Priority #3. De-Balkanize Tax Enclaves
  • A. Rich and Poor
  • B. Timber and Timberland
  • The Role of Timber and Timberland
  • Two More Areas Deserving Attention
    • Offshore Oil
    • Tax All Natural Resources Uniformly and Comprehensively
Priority #4. What Tax to Fight First?
Priority #5: Make Landowners Pay Their Taxes

Timber and Timberland

Standing timber is generally now exempt from property taxes, by law or custom. Land remains on the property tax rolls. This sounds like a Georgist idea; advocate Ellis Williams, a forest economist, has made the point. It is, however, just partial and discriminatory Georgism. The present system works as though you exempted half the buildings in a city from a tax and raised the rate on the others. Timber is exempt, but as soon as it is cut, milled, and hammered into buildings, it goes on the property tax rolls. The bias is apparent between capital in different forms.

Standing timber still yields some revenue when it is cut. The idea has been to substitute a "yield-tax" for the property tax. In practice, though, yield tax rates are much too low to be revenue-neutral. In California, for example, the yield tax rate is 2.9 percent. It is levied just once during the tree's life cycle of 60-100 years, at the end. Two and nine-tenths percent levied just once at the end of each 60 years, is obviously less than one percent levied every year, starting from year one. Values are low in the sapling years, but well above zero, and in the last few years before harvest, the stumpage is worth nearly as much as its harvest value. I have calculated that a yield tax of 25 percent or so (varying with the interest rate and the tree-life) is needed to have the same present value as a one percent property tax.

Here is the revenue result in one major California timber county, Mendocino. Its major property value is timber, but the County government and its subdivisions hardly get dried beans from the yield tax on it: $3.9 million in 1993, compared to $45 million from all property. This is not because they are cutting timber slowly; actually they are depleting the inventory. Neither is it because other values are high. This County has no large cities. Most of its people live outside the cities, and its annual timber harvest is twice as high as the sum of all its other "agricultural" gross output (including fishing). The net cash flow from timber harvests is much more than twice as high as the net cash flow from other property, because stumpage value is added mainly by property (land and trees), while other farm products like grapes, fruits, and milk are more labor-using.

How about land under the timber? It is separately valued, and kept on the property tax rolls. However, it yields revenue of only $1.2 million: one-third of what the yield tax renders.

Why so little? They could raise the valuation of timber land to compensate for exempting the trees. In addition, "timberland" in some areas is sold for vacation homes and resorts. Assessors once began using those sales to justify higher valuations. They also observed smaller timberland owners paying higher unit prices than giant corporate owners, and up-valued parts of their vast spreads accordingly.

Timber owners had other ideas, however. Major owners like SP (520,000 acres of timber in California) took alarm and went to Sacramento for relief. They got their lands put in a "Timber Preserve Zone" (TPZ) wherein land is assessed only on its putative value for raising timber, regardless of market value, regardless of alternative uses, and regardless of nontimber income from land growing timber. These "compatible" (untaxed) uses include grazing, resorts, vacation homes, campsites, fishing, hunting, watershed protection, tourism, rifle ranges, rights-of-way, mining, log storage, landings, roads, logging camps, etc. There is also hemp for the drug trade: possibly the state's most valuable farm crop, but unrecorded.

TPZ is hardly known outside the timber counties, but it covers vastly more than the better-known "Williamson Act" which provides for preferential low assessment of farmland. In Mendocino County, TPZ land of medium grade ("Site III") is now tax assessed at $136/acre. This is about ten percent of its value for growing timber (disregarding compatible uses), and a lesser fraction of its value for higher-valued "incompatible" uses like retirement homes that require formal "conversion" (obtainable on demand) out of TPZ. This is how they keep the tax payments on TPZ land down to only $1.2 million.

The Role of Timber and Timberland
Mendocino County, lying on the north coast, is redwood countty. Redwood's value on the stump ("stumpage") this year is 53 cents per board foot (pbf) when mature. In Shasta County, timber stumpage is worth about half that, 28 cents pbf, and is heavily logged at that value -- Shasta is our second biggest producer. If it is worth logging great volumes of Shasta timber to get 28 cents pbf, then there is a lot of surplus in Mendocino timber at 53 cents pbf. This surplus is what makes this land so valuable for growing timber. This surplus, unvexed by taxation, is what makes these lands so attractive to, and the play-things of corporate raiders, merger specialists, speculators, arbitrageurs, lawyers, and junk-bond salesman living thousands of miles away.

Redwood is a faster-growing species than most western timber (although much slower than Yellow Pine in the southeastern states). An acre of good (Site II) Mendocino land will yield a crop of 40,000 bf after 60 years of growth, worth about $20,000 on the stump at the 1995 prices. Discounting that to the present, using a real interest rate of five percent, means dividing it by about 16. Add ten percent for the present value of all harvests after 60 years, and you have very roughly $1,400/acre for the land value based purely on timber culture, considering no other values. Yet under TPZ its assessed tax value is $158, about 11 percent of its true value just for timber culture. This is accomplished by legislating the actual acre values (California Revenue and Tax Code, Section 434.5). The legislated formula mandates that "income-based" assessments be based on past prices, projected into the far future with no adjustments for inflation, but discounted at a high interest rate. It is clear for whose benefit this law was framed. ...

Timberland owners around the country have sold this bill of goods to legislators. In many states, less than half the private land is fully taxable, because of such laws. These are not all western or southern states, either, as one might surmise. In NH, for example, only 45 percent of the private land (and none of the Federal land) is fully taxable. The rest is sheltered by the State's "Current Use" tax law, their version of our TPZ law.

Advocates for these laws argue that land taxes, accumulating with interest over long growth periods, would eat up all the profit from growing timber. Let us see. Taxes of $1.56 per acre per year, accumulating over 60 years at a real interest rate of five percent, come to $552 per acre in constant 1995 dollars. At that time the timber stumpage will be worth about $20,000 at 1995 prices, or 36 times the accumulated future value of the land taxes. (In addition, the investment will have served to shield the owners from the eroding effects of inflation, a benefit assumed away by using constant dollars. On top of that, it is a good bet the real value of timber will have risen after 60 years of population growth.)

Thus, land taxes would have to be 36 times what they are now to consume the whole value of timber harvests. The fact is, present taxes are a negligible token. Timberland is effectively sheltered from the full weight (light as it is) of the one percent property tax imposed on ordinary land. It pays, as we have seen, only about $1.2 million a year in Mendocino County.

Timberland owners around the country have sold this bill of goods to legislators. In many states, less than half the private land is fully taxable, because of such laws. These are not all western or southern states, either, as one might surmise. In NH, for example, only 45 percent of the private land (and none of the Federal land) is fully taxable. The rest is sheltered by the State's "Current Use" tax law, their version of our TPZ law.

The acre value of timberland is low compared with downtown values in San Francisco, where one little square foot in the hottest spot may fetch $2,000. That is $87 million per acre! However, there are very few such golden acres, compared to a million acres of timberland in Mendocino County, some 35 million acres in California, and 737 million acres in the U.s. That is 32 percent of the area of the 50 states. (The fraction of private and public land in forests is, by coincidence, the same: 32 percent.)

Owing to the success of timber people in spreading their gospel, almost all of their land is underassessed. Almost all state yield taxes, imposed in lieu of property taxes on standing timber, are too low to be revenue-neutral. Add to that, Congress since 1943 has made timber a "capital asset" for federal (and therefore state) income tax. Many costs of managing and carrying this capital asset are expensible - certainly interest and property taxes are. The net result is that timberland contributes very little to public revenues at any level.

Residents of timber counties are typically scattered and poorly organized. Timber companies are huge, rich, few and tightly organized. In Mendocino County, Georgia Pacific and Louisiana Pacific, absentee owners, together own the best 500,000 acres - 58 percent of the County's timberland - and Georgia-Pacific owns Louisiana-Pacific. They control state forestry schools, paying professors as consultants. They support research in forest economics at think tanks like Resources for the Future in Washington, which has never criticized their tax preferences but trained its big guns on public agencies, the Forest Service and the Bureau of Land Management. "The industry" controls tax laws in 50 states, and sloughs tax burdens onto others. It will continue to do so until other taxpayers in the timber counties wake up and organize to control state timber tax laws.   ....

Priority #4. What Tax to Fight First?

We must set priorities on taxes to lower and eliminate. The Georgist [geoist] objective is dual: to raise taxes on land, and to lower taxes on other bases. Many Georgists have the posture and mindset of reforming just "the property tax," in a vacuum, but this was never George's main point. There are other new or augmented taxes more damaging and noxious than the property tax falling on reproducible wealth:

  • state taxes on retail sales;
  • payroll taxes;
  • income taxes falling on wages and salaries;
  • excise taxes; etc.
Some Georgists have supporting wiping out taxes on "personal" (movable) property. Political success be the test, this movement has won massively (although silently) in state after state, and in all Canadian provinces. The result, though, is to do as much harm as good, for the exemption of capital is partial and discriminatory. "Real" (immovable) capital is still taxed, biasing the way investors allocate capital. Indeed, some "real" property is changed into "personal" property simply by unbolting it from the floor.

The result is also regressive, because personal property in most industries is more concentrated in ownership than real capital. In farming, for example, personal property includes cattle, stored grain, and farm machinery, but the owner's dwelling is real capital.

Other Georgists have diverted their efforts into wiping out the property tax on standing timber, replacing it with a nominal yield tax. Again, the result is partial and discriminatory, biasing investors to allocate more capital in the form of timber, and correspondingly less in other forms. As noted earlier, the present system works as though half the buildings in a city are exempted from a tax and the rate on the others raised.

Timber-exemption is highly regressive because the ownership of timber is much more concentrated than the ownership of homes of loggers and mill-workers and retirees in the timber counties. It would not be so bad if the land taxes on timber-growing sites were raised enough to compensate for exempting the growing stock. However, as we have shown, these site taxes are also held down to token levels. The net result is to turn timber and timberland owners into a huge public welfare case supported by a sophisticated brainwashing machinery paid by the discretionary income and wealth of the industry. Read the whole article


Mason Gaffney:  Who Owns Southern California?

1. HOLDINGS BY ALIENS  ... Non-resident aliens own about 75% of the "major" buildings in the L.A. CBD west of Broadway ...
2. AMERICANS FROM OTHER STATES ... A second kind of holder is the out-of-state American, individual or corporate.
3. CALIFORNIANS Many of our largest landholders also live in California. This is partly because the lands are here, but moreso because certain places in California are good places to live. One of the advantages of receiving property as opposed to labor income is it lets one choose his residence. California ranks after New York in the number of rich Americans (using Forbes' list) who reside here.

Also included here are California-based corporations. A corporation's "base" refers simply to the site of its headquarters: its shareholders are scattered around the world, and the major shareholders, who exercise control, are effectively screened behind layers of trusts and financial institutions, so they are impossible to identify with certainty.
Institutions acquire land for their operations and then it tends to stick to them for various reasons. It is tax free, for one, so long as they retain it (and do not use it commercially). They are not subject to corporate raids. Thus there is no mechanism whereby the current opportunity cost of land is felt by management. It never appears in their budgets; they never need compete for or justify it. College Boards are not accountable to any public body, a precedent set by Marshall's U.S. Supreme Court in Dartmouth College v. Woodward, 1819. ...   Read the whole article

Alanna Hartzok: Who Would Jesus Tax? The Saga of Susan Pace Hamill's Alabama Tax Crusade

A University of Alabama School of Law Professor has asked God's forgiveness for the years she lived in the sin of ignorance about tax injustice. Susan Pace Hamill, a tax expert, business consultant, and dedicated United Methodist church goer, thought there was a misprint when she first read that personal incomes as low as $4,600 for a family of four were being taxed by the state, while timber owners holding 71% of the land of Alabama were paying less than $1 per acre in property taxes. Two hours later she found out there had been no mistake and that Alabama has the most regressive tax code in the country. Her righteous rage spawned a tax crusade that has reverberated onto the national scene.

"As somebody who knows a lot about taxes, I could not have imagined a design of a tax structure this bad," she said in a Tuscaloosa Newsstory last February. "The state's tax code is really horribly unjust and has no moral, ethical leg to stand on. Period."

Alabamians with incomes under $13,000 pay 10.9 percent of their incomes in state and local taxes while those who make over $229,000 pay just 4.1 percent. Commercial property owners pay more than 50 percent of property taxes, with homes approaching one-third. Alabama's sales taxes are among the highest in the nation, up to 10 percent in some areas, and do not exempt even the most basic necessities such as food. The state's 1901 constitution was written primarily by large landholders to secure their economic interests, consequently property taxes are extremely light on their holdings. ... read the whole article


Jeff Smith and Kris Nelson: Giving Life to the Property Tax Shift (PTS)

John Muir is right. "Tug on any one thing and find it connected to everything else in the universe." Tug on the property tax and find it connected to urban slums, farmland loss, political favoritism, and unearned equity with disrupted neighborhood tenure. Echoing Thoreau, the more familiar reforms have failed to address this many-headed hydra at its root. To think that the root could be chopped by a mere shift in the property tax base -- from buildings to land -- must seem like the epitome of unfounded faith. Yet the evidence shows that state and local tax activists do have a powerful, if subtle, tool at their disposal. The "stick" spurring efficient use of land is a higher tax rate upon land, up to even the site's full annual value. The "carrot" rewarding efficient use of land is a lower or zero tax rate upon improvements. ...

An obvious loser is a resource extractor such as an Oregon timber harvester (Weyerhauser is the biggest landowner in the state). All the rent that society now allows them to retain, they'd lose. Perhaps there is a silver lining to corporate mergers and diversification and interlocking stock holding; the huge corporations holding resources would have other profitable lines to turn to.

A big problem needs a big solution which in turn needs a matching shift of our prevailing paradigm. Geonomics -- advocating that we share the social value of sites and natural resources and untax earnings -- does just that. Read the whole article

Jeff Smith Share Rent, Transform Society
If society decided to share among its members all the annual value of society's sites and resources and air space, what would happen? ...

It doesn't matter who owns what. What matters is who gets the rent. We have millions of acres of forest we Americans own together, and we are losing rent on it.   ...

What other social relations might change? Increase land ownership participation in community and it benefits community, with town hall meetings and block parties. Those kinds of communities have less crime.  Read the whole article

Mason Gaffney: George's Economics of Abundance: Replacing dismal choices with practical resolutions and synergies

Enhance evironment and conserve resources while making jobs
Georgist tax policy acts to abort subeconomic extensions of public works, as noted just above. Not only does this save public funds, it protects the environment. Saving public funds and saving wildlands and waters are perfect complements.

"Jobs vs. the environment" is the dismal trade-off offered by confused thinking. A Georgist economy is resource-saving as well as job-making. It saves resources by focusing human activities intensively on the lands that are used, leaving or releasing marginal lands for wildlife, recreation, wetlands, watershed protection, etc.

There was once a tendency for environmentalists to oppose human use of land wherever and whenever they could. Now, most of them are looking at the whole human system. The Sierra Club is supporting urban infilling, seeing that demands that are not met here are bound to pop up there. John Baden, a Pacific Northwest forest economist, sums it up in a few words: timber should be grown on lands that are flat, warm, wet, and near markets. Georgist tax pressure applied to those "Site I" lands will promote exactly that, leaving the steep, arid slopes for scenery, watershed, and recreation.... read the whole article


Mason Gaffney: Full Employment, Growth And Progress On A Small Planet: Relieving Poverty While Healing The Earth

In forestry, the places to grow commercial timber are lands that are “flat, wet, and warm,” as John Baden summarizes it. (He might have added, “accessible.”) Failure to restock such lands economically pushes demand onto lands that are steep, dry and cold, creating the “forestry sprawl” from which we suffer. ... read the whole article

Mason Gaffney: Sounding the Revenue Potential of Land: Fifteen Lost Elements

... Classification of land for taxation, with preferential low assessment for lower uses (rarely are assessments above the market for any use, except apartments and rentals for the poor). In California, some favored use-classes are farming, timber, and golf. Alabama has another set of low-tax classes, favoring land in forests and hunting grounds, catering to the Heston vote in league with absentee corporate owners (and, for no visible theological reason, organized fundamentalists). Lands in classified uses are assessed by capitalizing their visible money income from the official use only, thus exempting from the tax base all values from rustic manorial, recreational, and blood-sport uses, and all speculative values based on higher future uses. In vast rural and sylvan areas these other influences are the main source of market value. ...

Discounts to large owners who have policy of slow sales or leasing. (Such discounts are given to Oregon timber; to Appalachian coal; and many extractive resources. They are given to laggards in ecotones.)...   Read the whole article

Mason Gaffney: Two-rate in Reverse


Peter Barnes: Capitalism 3.0 — Chapter 3: The Limits of Government (pages 33-48)

Limits of Public Ownership

Because of historical circumstances, America has a long tradition of public land ownership. When Europeans first arrived, North America was held in common by an assortment of tribes. As these tribes were dispossessed, the federal government acquired their territories. Some of the federal holdings were given to states as they entered the union. Though most of what the federal and state governments owned was then sold cheaply, much was retained. Today, nearly a third of the land in the United States is government-owned.

To say that land — or any asset — is “government-owned,” however, isn’t to say it’s managed on behalf of future generations, nonhuman species, or ordinary citizens. Consider what the federal and state governments have done with the lands they own.

Outside of Alaska, about 5 percent of government-owned lands have been designated as wilderness. In such areas, humans may enter on foot but not use motorized vehicles. Mining, logging, and hunting are also prohibited. On the other 95 percent of government-owned land, private and commercial use is regulated by various agencies. National forests are managed by the U.S. Forest Service, grazing and mineral lands by the Bureau of Land Management, hunting and fishing by the U.S. Fish and Wildlife Service.

As a general rule, politics — not fiduciary duty — determines what uses are permitted and what prices are charged. A classic example is the Mining Act of 1872, under which private companies can stake claims to mineral-bearing lands for $5 an acre, and pay no royalties on the minerals they extract. Every attempt to reform this antiquated law has failed because of the mining companies’ political clout.

In the same vein, the U.S. Forest Service has for decades been selling trees to timber companies for below-market prices. On top of that, it spends billions of tax dollars building roads in virgin forests so timber firms can harvest the people’s trees. This is, of course, economically irrational and a huge subsidy to private corporations. It also addicts Americans to cheap forest products and destructive logging methods. These practices occur because the Forest Service is not a trust committed to ecosystem preservation, but a politically influenced agency dedicated to “multiple use” of government-owned forests.

There are exceptions to this dismal pattern. One involves trust lands given by the federal government to states. Such gifts began with the Land Ordinance of 1785, which reserved one square mile per township for the support of public schools. Later, the Morrill Land Grant College Act of 1862 gave more land to states to support colleges of agriculture and mechanics. And in 1954, Congress gave Texas title to oil-rich coastal lands, providing that all revenue from them be placed in an endowment, or permanent fund, that generates income for public schools forever.

Today, twenty-two states hold about 155 million acres in trust for public schools and colleges — which is to say, for future generations. Like the federal government, the state trusts lease much of their land for oil drilling, timber cutting, and cattle grazing. The trusts’ duty is to preserve not the land itself but the income streams it generates. This creates beneficiaries (educators, students, parents) who monitor the land managers closely. One result, according to University of California professor Sally Fairfax, is that state trust lands are better managed than federally owned lands. Whereas the U.S. Forest Service “has been hiding the ball on cash flows and returns to investments for most of this century . . . the state trust land managers know how to keep books and make them public.” Further, even though the state trusts aren’t bound to protect ecosystems per se, they tend to do so because they have a long-term calculus.

An interesting variant of the typical state land trust is the Alaska Permanent Fund, created in 1976 to absorb some of the windfall from leasing state land to oil companies. The aim was to create an endowment that would benefit Alaskans even after the oil is gone. To this end, the Permanent Fund invests in stocks, bonds, and similar assets, and off the earnings pays yearly dividends to every resident. Originally, the dividends were to be allocated in proportion to the recipients’ length of residence in Alaska, with old-timers getting more than newcomers. But the U.S. Supreme Court ruled that, because of the Equal Protection clause of the Fourteenth Amendment, Alaska couldn’t discriminate against newcomers that way. The dividend formula was then changed to one person, one share. ... read the whole chapter



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