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.
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:
http://aquarianagrarian.blogspot.com/2017/01/what-is-geolibertarianism.html
http://www.lclp.org/articles/geolibertarianism/
See other articles on this blog about Geolibertarianism here:
http://aquarianagrarian.blogspot.com/2017/01/what-is-geolibertarianism.html
http://www.lclp.org/articles/geolibertarianism/