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Jeffery J. Smith


Unplugging Abundance: The Citizens Dividend

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Unplugging Abundance: The Citizens Dividend


Abstract

Each pay day in 2024, check your paycheck. Youíll notice no deduction for taxes. Check your receipts for your purchases. Youíll notice no addition for taxes. Look for your property tax bill. You wonít find one. Your only obligatory payment to your society will be your land dues or "Deed Fee". Not only is land rent ours, itís a lot. The flow of natural rent each year is enormous, probably at least 10 trillion dollars globally. While information software grabs the headlines for generating fortunes such as that of Bill Gates, largely ignored is the fact that technology has driven up land values in the various silicon valleys, forests, and prairies by giga-bucks that dwarf the fortunes of the Gateses. By letting such rent be misdirected, we deny ourselves an income supplement that would make our lives far more comfortable, and far less taxing.

Paper

The first of each month (thereíll probably be 13 of them by the year 2024), check your bank account. Youíll find it credited with your share of natural rent, of the money we spend on the nature we use. Itís your share of the worth of Mother Earth.
Each of us is born with the right to life. To go on living, we need at least some air, water, and land. Since air and water cannot be monopolized, both basic necessities are still free. As we destroy the atmosphere, air will acquire a price that will steadily rise; if you donít pay it, youíll suffocate.

While such a scenario may seem incredibly harsh, it differs little from our current custom of having to pay monopolists of land. Those who cannot afford to pay, homeless vagabonds and landless peasants, do not literally suffocate. But they do lead suffocating lives that expire prematurely.

To realize our right to a share of earth, we could try to parcel out the surface of the planet. Yet many resources lie below (e.g., oil) and above (e.g., broadcast channels) the surface. And the utility (and thus the value) of the surface varies wildly. Plus itís not just the material world to which we stake a claim, but the immaterial world of knowledge, too, has been fenced off and thus produces billions in surplus profit.

A far more practical way to share Earth is to share her worth. That is, to own a site or resource or a Platonic ideal, we could pay into the community treasury; when renewing our title to our land or our patent upon knowledge, our community would charge each of us the annual rental value of our parcel or the intellectual property. Our agent, government, would then divide up the collected rents among residents, as the State of Alaska does now with oil revenue. Thus rent becomes public while claimed land and discovered structures remain private.

Presently, the money we spend on the nature we use accrues in the pockets of a few, yet it belongs to the many. None of us created land, while all of us generate her worth. The most valuable aspects of land are location, location, and location. Beyond its natural attributes, we value a parcel for the infrastructure that services it, for its proximity to good schools and hospitals, and for the surrounding societyís tranquility and sophistication. All these amenities draw people, raising density, the best indicator of a parcelís value. No owner can claim to account for density, eventhoí itís he who now receives the value of social progress.

Not only is rent ours, itís a lot. The flow of rent each year is enormous, probably at least 10 trillion dollars globally. While information software grabs the headlines for generating fortunes such as that of Bill Gates, largely ignored is the fact that technology has driven up land values in the various silicon valleys, forests, and prairies by giga-bucks that dwarf the fortunes of the Gateses. By letting such rent be misdirected, we deny ourselves an income supplement that would make our lives far more comfortable, and far less taxing.

Each pay day in 2024, check your paycheck. Youíll notice no deduction for taxes. Check your receipts for your purchases. Youíll notice no addition for taxes. Look for your property tax bill. You wonít find one. Your only obligatory payment to your society will be your land dues or "Deed Fee".

The right to life also includes the right to retain the fruits of your labor. Work, income, and homes are legitimately private property. Society has no just claim upon the property of others. Our agent, government, will within two and a half decades forgo the taxation of the possessions of citizens. And if the moral argument is not persuasive enough, wherever taxes fall, there site values rise. Higher rents, once theyíre shared, mean a fatter dividend for all. Replacing taxes and subsidies with the sharing of rents is the cutting-edge policy christened "geonomics".

Now, however, the general populace does not receive rent. Most people must overwork and under-play. Since the landed interests do receive rent, they become an elite who under-work and over-play. The elite also wield the state as a tool to tax and subsidize regressively so to benefit their special interests more than the general interest. Thus privatizing rent fosters a hierarchical political system.

These problems with politics and social relations are matched by problems with economies and eco-systems. Privatizing rent rewards speculation in land and over-extraction of resources. Sharing rent, on the other hand, would erase the motivation for "eco-ploitation". Removing the dead-weight losses of both taxation and rent-seeking would streamline the economy. We could produce more from less, raising the standard of living while enabling a sustainable economy, polity, and eco-system. Plus, getting a citizens dividend lets people shorten their workweek and live more rounded lives.

While the Earth Share may seem far away, every long journey begins with a single step. In this case, the reform is already on the road. Not only does Alaska share rent, but several places also collect a sizeable chunk of it while lowering other taxes. For example, Pittsburgh (PA), Hong Kong, Mexicali (Mexico), part of San Diego (California), and many towns in Australia and New Zealand do. (See our "Where Tax Reform Has Worked".)

Thru-out history, many luminaries have endorsed variants of the reform, including Bertrand Russell, Frank Lloyd Wright, Einstein, Churchill, Sun Yat-sen, and Tolstoy. (See our "101 Famous Thinkers on Owning Earth".) Lately, environmentalists have begun to promote the shift of taxes and subsidies. (See our "Greens on George: 99 Notable Environmentalists View Taxing Only Land".) Not far behind them are libertarians and urban advocates. A coalition of such odd bed-fellows could win almost any transformation in record time.

Whatís yours, mine, ours? Answering these questions correctly, and applying the answers in the year 2024, will not only make the world more just, but also prosperous and sustainable. So why wait another two dozen years?


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