Saturday, January 28, 2017

What is Geolibertarianism? (Abbreviated)

What is Geolibertarianism?

Written on January 25th, 2017

      The Libertarian Party needs a tax policy.

      Given that Gary Johnson failed to convince certain media figures that the FairTax is the best tax plan out there, and failed to convince the American people to vote for him, it's time for the L.P. to think about its tax policy, and the principles behind it.
     Don't get me wrong; there's nothing wrong with the FairTax, Johnson simply wasn't given enough opportunities to defend it. The FairTax – which would aim to replace personal income taxes – is a proposed 23% sales tax on all goods sold nationally, in order to fund the federal government. On first inspection, the plan appears to achieve every goal of good libertarian tax philosophy.

      Despite the concerns of CNN's Chris Cuomo that the FairTax is regressive - and the concerns of John Oliver that the plan is just another social welfare program – Johnson continued defending the FairTax.
      He argued that it was revenue-neutral. He also argued that the FairTax is not regressive; because it would compensate people – in advance, to the tune of several thousand dollars annually – for those national sales taxes which they would pay on ordinary consumer goods and services. This payout – which John Oliver described as just another social welfare program – is called the FairTax “prebate”.
      The FairTax succeeds at putting into practice most of the goals of libertarian principles on taxes. And what are those principles, exactly? We want to simplify the tax code, for a start. We want make tax burdens more equal by flattening tax rates, and run government services on fee-for-service models. But we also don't want to burden low-income people who have difficulty affording taxes, because we recognize that more government involvement has made their lives more difficult in that respect.
      Lastly, we want a tax code that doesn't inhibit productive behavior. We share the concerns of former Reagan economic adviser Art Laffer, whose “Laffer curve” explained the mathematical ramifications of the observation that taxes often have the effect of punishing or deterring the behaviors which they tax. If we agree that taxes do punish, then they should punish intentionally.
      More to the point; what the FairTax lacks is an idea of how to fully apply the idea that all taxes just might punish and deter the behaviors they tax. That's where the Single Tax comes in.

      Now commonly known as Land Value Taxation, the Single Tax is the philosophy of 19th-century American economist Henry George. Students of George's philosophy – called Georgists, or geoists – have adopted slogans such as “tax land, not man”, and “tax bads, not goods”.
      This means that Georgists want government to be funded entirely through the collection of rents on the non-improvement of landed property. In a Georgist system, local governments would levy fees against wasteful “uses” of landed property, while “community land trusts” would be charged with preserving and allocating land.
      I know what you're thinking, and you're right; your property taxes are high enough already. But under Georgism, you would incur no tax liabilities from making productive use of your land (as long as you don't render the land unusable). You would be free to make sustainable improvements that increase your property value, without paying increased property taxes.

      Despite the “Single Tax” label, there are numerous types of activities which would be taxed in a Georgist system. These include but are not limited to: hoarding, abuse, misuse, disuse, blight, pollution, and unsustainable development of land; as well as the extraction of natural resources without compensating the community.
      The Georgist system would levy taxes with the intent of deterring and punishing the undesirable behavior (the “bad”); while avoiding taxing man's productive economic behaviors; like engaging in labor, and buying and selling “goods”.
      The advantage that Georgism has over the FairTax is that Georgism taxes waste, while the FairTax taxes consumption. This is problematic because consumption is not always wasteful. Conspicious consumption (that is, excessive consumption), on the other hand, resembles waste. But to tax only the waste of land, while refraining from taxing purchases, could help avoid the risk that the FairTax could deter the purchase of ordinary goods.
      Truth be told, as long as prices and the value of the dollar were to remain stable, the FairTax's prebate would probably remove that disincentive to make purchases. But nonetheless, the Georgist plan to tax waste, in all its forms, achieves the goals of libertarian tax philosophy even more thoroughly than the FairTax does.
A geo-libertarian tax policy would most likely be funded through 1) voluntary donations, 2) user fees), and 3) taxes on the non-improvement of land.

      Henry George's philosophy was praised by the late former Reagan economic adviser Milton Friedman; as “the least harmful tax” ever proposed. For the last fifty years, Nobel Prize winner Friedman – as well as his son David, and grandson Patri – has been an important influence on conservative and libertarian thought.
In 1968, Friedman defended the Negative Income Tax (N.I.T.) against William F. Buckley's questioning. The N.I.T. was not devised by Friedman, but it was supported by Sargent Shriver and Daniel Moynihan, and considered by presidents Johnson and Nixon.
      The Negative Income Tax would be paid for through a flat tax on those above a certain income level, with a “negative tax rate” being applied to people below that income level. This imposition of a negative tax rate would result in a cash payment, which Friedman explained could be equal to (as an example) 50% of the difference between the low-income person's annual earnings, and the income level that establishes who will pay taxes and who will receive payment.
      One intention of the N.I.T. is to phase-out requirements that a person must give up benefits as soon as they become employed; these requirements create what some call “the poverty trap in the welfare system”. Another intention of the plan is to pay low-income citizens their own money back.
      Such a plan could be argued to provide reparative compensation (that is, reparations) to the impoverished; as an redress of grievances; grievances against the federal government such as growing beyond its appropriate scope of power, putting taxpayer money in the hands of cronies and lobbyists, and creating artificial scarcity of land through the hoarding of land into federal ownership.
      A libertarian implementation of the N.I.T. would most likely involve shrinking government involvement in health and education, while returning the moneys that fund health and education to the taxpayers, so that they may more easily be able to afford buying health and education goods and services on the open market, just as they would with ordinary consumer goods.

      Now the similarities between the FairTax and the Negative Income Tax are becoming apparent.
      Both plans impose a tax upon a productive economic behavior which is not related to land; the FairTax taxes sales, while the N.I.T. Taxes income. Both plans would be levied in the hope that they would make at least one other way of sourcing government revenue obsolete. Additionally, each plan would be administered concurrently with reductions in the size and scope of government; returning money to the taxpayer, in a way that is effectively progressive, even if some describe them as flat.
      Aside from the FairTax, the Negative Income Tax, and the Georgist plan, the ideas of Thomas Paine should be considered. At the Libertarian Party's 1998 convention, a group of libertarian Georgists called the Thomas Paine Caucus hosted a booth, hoping to get their land platform into the party's platform.
      The caucus was unsuccessful; and although some caucus members did become L.P. members, the caucus did not become part of the party. As a result, in the last twenty years, the party has perhaps paid less attention to Paine than it should. However, that does not stop today's geo-libertarians from calling for the party to consider Paine's ideas on welfare, in addition to George's and Friedman's.
      In Common Sense, Paine articulated what could be described as a geo-libertarian proposal for a citizens' dividend program. He essentially argued that, since government must deprive individuals of full private property rights (in order to maintain basic zoning and land-title systems), government should be obligated to compensate all adults in the country with a certain guaranteed income; an income equal to the value of the vast set of landed property rights which they would otherwise fully possess.

      Of course, without access to land and natural resources, it is practically impossible for most people to be productive. As a result, competition for resources, trade, and currency, are all more prevalent than they would be if individuals sustained themselves. Poverty and dependence go hand-in-hand; this is what libertarians, conservatives, and Georgists all want to address.
      That's why we should consider what people like Thomas Paine, Milton Friedman, and Henry George have taught us about taxes and welfare; as well what libertarians leaning to the left (such as Charles Murray) have to say on the matters. Murray (of the American Enterprise Institute) has been criticized for supporting a basic income proposal.
      Some of the more conservative members of the Libertarian Party might criticize basic income (and similar proposals like citizens' dividends and sovereign wealth funds) as proposals that advocate redistribution. But given our belief that most taxation resembles theft, and the fact that the First Amendment recognizes the natural right to petition the government for a redress of grievances, Libertarians shouldn't rule-out all proposals that would put cash directly in the hands of the people.
      That's because any one of these proposals could result in payouts that are parts of a long-overdue civil settlement between the people and their government. We the People have no duty to forgive the federal government for the self-defeating, unjustly punitive tax policies which it has administered since the Founding; we should instead hold it responsible. Government and its cronies should be found guilty of legitimized unconstitutional mass-scale theft of wealth and property rights; and the rewards should go to every resident under federal jurisdiction.

      Many L.P. members and Georgists would probably agree that the federal government should pay compensatory damages to its victims (We the People). We might argue about how much we can trust the states on land issues, and about whether people should have a choice between receiving land and money. But what is clear is that, if all “social welfare programs” keep people in poverty, then none of the reforms mentioned herein are social welfare programs.
      That's why we should continue to consider sales tax prebates, negative income tax payouts, basic income proposals, the citizens' dividend, and the sovereign wealth fund. We should also keep our minds open to new ways to put into full practice all of our principles on taxes. We must craft a tax policy that is fair and equal; that affords as much freedom to the taxpayer as possible; and that holds government (and its largest land-hoarding and polluting beneficiaries) responsible for funding government.
      We must levy fines that punish civil and criminal wrongdoing, not fees and taxes that deter people from working, trading, and engaging in productive activities that harm nobody. To do the opposite is to continue to grow government; to enrich cronies; to make land more expensive; and to keep the poor in poverty. It is to continue down the same path that has given innumerable unsustainable budget deals and irrational forms of taxation.
      That's why the Libertarian Party should not shy away from making tentative alliances with those slightly to the party's left, nor should the L.P. shy away from the party of free land and free money.

See other articles on this blog about Geolibertarianism here:

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