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Taxation by Another Name: Our Devotion to Privatization Will Cost Us


#1

Taxation by Another Name: Our Devotion to Privatization Will Cost Us

John Atcheson

Trump used the State of the Union address last week to ballyhoo his infrastructure initiative, and folks jumped all over it, and rightly so.

What the critics are missing is that all the problems they identify with the infrastructure plan, are just specific examples of what’s wrong with the small-government/market-friendly policies embraced by both major parties.


#2

As if any of this wasn’t obvious from the get-go. Republican “policy” is sold like toothpaste, only the claims of those advertising actual toothpaste have some basis in fact. Whenever a republican gives some “policy” a name, expect that the true aim is just the opposite. Privatization kills at least two birds with one stone – rich people both pay less taxes and are given more of the public trust from which to rip us all off. By placing public functions into the hands of capitalist profit gougers it is guaranteed that we will get the least service for the most money. It is NEVER more efficient or cheaper. It is merely a way to funnel even more money into the hands of the plutocrats. It will cost jobs because labor is an expense on the capitalist balance sheet and the natural pressure in a profit-making scheme is to cut costs to maximize profit. The quality of whatever service is privatized will drop dramatically for the same reason. The benefits of privatization are a LIE, sold to us as some sort of panacea precisely because those who are selling it know it is a lie. This is akin to pissing on us and telling us not that it is raining, but that we are not even getting wet as the piss threatens to drown us all. And, guess what. Trump voters will drown in the same ocean of piss as the rest of us. Gotta love republicans (and their cheap imitators, the democrats) for sheer gall.


#3

They HAVE been “pissing on us” and calling it trickle down for at least the past three decades. Are we so color blind that we don’t see yellow even when we are soaked in it ?

Concurrent with privatization making everything we buy more expensive, the chained consumer price index (CPI) that December’s Inequality Exacerbation ACT (IEA) triggers ends cost of living increases for wage earners, beneficiaries of pension programs, and Social Security, etc., the best of both worlds for the 1%, the worst of both worlds for the 99%.


#4

I heard the exact same story from fellow hay farmers back in the 1960’s.

“Never take a penny from the US government,” they said then.

“The US government is centralizing land ownership to rich people and corporations using inheritance taxes and you can’t believe a word the US government says.”


#5

You do realize that if inheritance taxes were properly/fairly applied, the rich people and corporations would be paying A LOT more than farmers like those fellow hay farmers, eh.

Don’t get taken in by the Koch-driven message.


#6

Yes. Property taxes began to go down after the farm land was centralized into corporate control.


#7

So…you’re against property taxes or against inheritance taxes?

If you ask me, both are needed.


#8

Fuck Milton Friedman!


#9

Well, you may support the oligarchic takeover of land in the US, where it was perfected before going out into the world to destroy democracies and privatize indigenous lands.

That is your choice. I support logical taxes that in turn support a strong America.

A tax on carcinogenic chemical pollution might be better than property taxes on people with only, for example, a mortgaged house and car payments.


#10

Good article! The general public has been brainwashed into believing that private businesses can always do things better, and for lower costs. The problem is that —it simply isn’t true!

And, insofar as it sounds like a “free-market” solution, it is blatantly false. Private capital desires, above practically all else, 4 basic things for performing infrastructure or service:
1) A “captive market” In other words a guaranteed monopoly.
2) Guaranteed return on investment. In other words, the taxpayers cover the risk.
3) Externalization of as many costs as possible, again courtesy of the taxpayer.
4) A freedom from liability.

Anyone who thinks that this has any resemblance at all to a “free market” needs to quit drinking the kool-ade. Corporations actually love socialism, to the extent that they get to
"socialize" their costs, and get to make returns on investment with little or no risk.


#11

Property taxes should be on a sliding scale, I.e. the higher the income, the higher the rate. Low-income people should get a “homestead deduction” on their primary residence. This is done in many states, but should probably be larger, and cover more middle-class taxpayers.
That has to has to happen at State and local levels.

Inheritance taxes, which affect only a tiny percentage of very rich people, are an important brake on the tendency of great accumulation of wealth over generations to create a class of largely unearned, inherited nobility.


#12

Privatization of government services is a joke. The idiots that push it in education, prisons, and all the bullshit “public/private partnerships” never mention that private enterprise HAS to make a profit and has just as much waste and quite often more than a strictly public enterprise. Look at SS & Medicare as perfect examples.


#13

I think Mr. Atcheson is saying, " if progressives, greens, good gov’t independents, democratic socialists, environmentalists, the unenthusiastic and all the rest don’t get their shit together, we’re going to get screwed over hard by The Uniparty ".
Everyone knows privatization of gov’t services is usually another 1%er ripoff. Only our pols can’t seem to figure it out, actually.:wink:
Give the Dims a chance in 2018 to figure what they’re about. But, we all should be very wary of a bunch Don & Debbie Milquetoasts on the upcoming ballots. We’ve been there, done that; it simply prolongs the pain and always cedes too much to the Beltway Bunch. Time is not on our side, here. Neither are a slew of careerists, either.


#14

Naw, property taxes should be based on the value of the land, whose value is usually improved by things that the taxpayers have paid for - roads, public transit, schools, etc. Right now, someone can buy an apartment building, throw everyone out (which reduces ‘upkeep’ to zero dollars), then complain to the local city council that they don’t have any income so they should pay taxes. The empty building would then contribute to the local deterioration of the neighborhood.

In an effort to improve the now-deteriorated neighborhood, over the next 5-10 years, local taxes - that other people pay - is used to pay for improvements (roads, parcs, schools, etc). Once the land is improved, the empty building is sold at a much profit - that is, the owner reaps benefits that the public paid for. Bonus: local rent and housing costs increase dramatically, everyone else loses, and has to move elsewhere.

If that land were taxed a greater, fair rate (essentially paying rent on the land, which is paid to the commons), the owner would have to, as they say around here, “sh*t or get off the pot”. Either sell it right away or use the land productively.

“Income”, as you should know by now, is easy to move around the planet and is easy to obfuscate, even equipment is easy to pack up and move elsewhere. No, tax land at its real value, the buildings are a little harder to pack up and move to the Isle of Mann during the night.


#15

One problem with taxing at “real value” is neighborhood continuity. The real value tax system can be designed so the value is adjusted when the current owner dies and the heirs sell. California has a system like that and, as near as I can tell, the main needed refinement is to assign a life-time to corporate land owners.


#16

Note, I did say: tax the land, not the property. Also, I forgot to emphasize that the land tax would/should replace income tax.

If your land tax was, say, $10K a year but your income tax was $0, it would have no effect on your net income. Because the “cost” of owning/keeping a home would be higher, house prices would be lower - result, more people owning their own homes (so, neighborhood continuity), and fewer people paying rent (as ‘rent’ and in the economic sense) to the FIRE system.


#17

Quite frankly, it my belief that there should be no such thing as “private property”.

During one of China’s most prosperous periods in its long history, there was a dynasty that outlawed Private Property. People still had homes and lands to work and in many cases that home was “inherited” by children of the same. The land was still owened in “Common” by the state. This meant the individual could not do as he pleased with the land as the land was not his. This was one of the most peaceful times in China’s history.

Old land owning clans , the nobility, resented this and when the existing Emperor toppled, reversed those policies and the wars started anew so as to build up land holdings with the farmers once more the victim as warlord after warlord declared themself as a given land areas "rightful owner’.

The First Nations people also operated under the auspices of “the Commons” wherein the land belonged to an entire tribe and was for the benefit of the same.

Thomas Paine recognized the problems private property caused. He acknowledged that when a given area of land privately owned it exempted fellow citizens from using it and while this might work for a short while when there “ample land” as soon as a population grew it would lead to inequality and was in short fundamentally un-democratic. He could not go far enough to suggest abolishing the concept but felt all land owners should pay some form of usage tax with those proceeds going directly to the non landowner.


#18

Thank you for stating the best solution of all. It will never happen here, unfortunately.


#19

The problem with any system premised on “value of the land” is that “Land values” are an artifical construct and do not represent intrinsic value.

As example. An acre of the most fertile farmland in the world , that which can in fact be used to raise food in an economically sustainable manner very often has less “Value” in our market based system then does same land converted to housing.

A developer can come along and build roads, schools and the like around that farmland thus increasing its “market value” but the farmland lost is no longer productive in the way of food. When we look at our prairies they supported all manner of wildlife, herds of bison and grasses and trees prior to being “developed”. much of this is now lost to cityscape and that infrastructure alluded to.

Part of this thing called “privitization” is the monetizing of everything. Land being monetized leads to it becoming a function of Capital rather then an integral part of an ecosystem and sutainable environment.


#20

Farmland, generally being unimproved and un-serviced, would be taxed at a low rate; the improved city-fied land would be taxed at a much higher rate.

Per Wikipedia, “According to the USDA , small family farms average 231 acres”, or 934824 square meters. From what I’ve gathered on-line, that 231 acres’ value/price would be very roughly $1.75M. Typical tax rates for farm land are 0.25-0.6% or $400K. The annual tax is something like $435K to $1M (yikes!) per year per family farm.

Around here, the minimum house lot is 60ft x 60ft or 334.45 square meters. An average small family farm would yield 2,795 such lots. Each lot are presently taxed at, say $2K/year (for a rural-ish small town) to $4K/year for larger towns. That set of 2.8K lots would yield $5.9M to $11.2M per year.

However, if land-value tax was in effect, the town/city lots would be taxed at $10K-$20K (it’s important to remember that income tax would be zero, so you could well afford the land tax). Bonus, house prices would go down, because the taxes (a constant annual cost) are so high (basic economics, eh).

Total land-value tax of that family farm converted to town/city house lots? It would be some $28M to $56M per year - roughly fifty times higher.

Some jurisdictions partially implemented land-value tax by assessing a windfall tax assessment - most of the ‘improved value’ of the land is clawed back in taxes. This is fair seeing as the only reason the value increased is because of improvements taxpayer have paid for. How do you think that countries like Norway are able to pay for free education, health care, good retirement pensions, etc? Very happy people, those Norwegians.

Under the present system, YOU pay for improvements (through the nose!), the real estate mogul reaps the benefits.