ATCOR (All Taxes Come Out of Rent) and EBCOR (Excess Burden Comes Out of Rent) are cornerstone concepts of Lockean and Georgist economics. They are generally regarded as non-mainstream, or ‘heterodox’.

While mainstream economists respect the efficiency of land-value taxation, they fail to subscribe to the conclusion that all tax burdens ultimately shift onto land. [1, 2]

Understanding the Theories (The Georgist Perspective)

Both terms were formalized and expanded upon by the economist Mason Gaffney: [1, 2]

1. ATCOR (All Taxes Come Out of Rent): This theory argues that because the supply of land is fixed (perfectly inelastic) while labor and capital are mobile (elastic), any tax levied on labor or capital ultimately lowers production and demand. This, in turn, depresses the amount of surplus value that can be captured as land rent. Conversely, if you abolish income or sales taxes, the savings are eventually bid into land prices, causing land values to rise. [1, 2, 3, 4]
2. EBCOR (Excess Burden Comes Out of Rent): This builds on ATCOR by focusing on the “excess burden” (or deadweight loss) of traditional taxes. Because distorting taxes stifle economic activity, they shrink the economic pie. EBCOR asserts that this lost potential wealth also directly reduces total aggregate land rents. Therefore, replacing bad taxes with a land tax would recover this deadweight loss back into the rental value of land. [1, 2, 3]

Why the Mainstream Differs

In standard neoclassical economics, the idea that a tax burden can be shifted completely onto one factor (land) relies upon assumptions not considered to hold perfectly in the real world: [1]

• Tax Incidence is Shared: Mainstream public finance uses the principle of tax incidence. It dictates that a tax burden is shared between buyers and sellers (or labor, capital, and land) depending on their relative price elasticities of supply and demand. While land bears a massive chunk of immobile taxes, it doesn’t bear 100%.
• Labor and Capital Aren’t Perfectly Elastic: ATCOR assumes labor and capital can perfectly “flee” a tax jurisdiction. In reality, workers face high friction when moving (due to family, language, borders, and culture), meaning workers often absorb a significant portion of income and corporate taxes through lower real wages. [1, 2, 3, 4]
• Agglomeration Economies: Modern urban economics shows that land values are heavily driven by network effects and matching markets (agglomeration). Land taxes can disrupt these networks, rather than cleanly subtracted them from a static rental pool.

Where Mainstream and Georgists Agree

Though mainstream economists reject the absolute mathematical claim of ATCOR/EBCOR, they strongly agree with the underlying sentiment regarding efficiency. [1]

Major institutions like the Australian Treasury and top-tier economic consensus acknowledge that broad-based land taxes are uniquely efficient because land cannot move or disappear. Mainstream models routinely find that taxes on capital and property transfers (like stamp duty) carry a massive “marginal excess burden” (deadweight loss), confirming Gaffney’s premise that bad taxes severely punish the wider economy. [1, 2, 3]

From a political economy standpoint, many reformers and heterodox economists argue that dropping ATCOR and EBCOR from mainstream textbooks wasn’t an innocent scientific evolution, but a deliberate move to shield landed interests and justify rent-seeking behavior.

However, mainstream economists view their rejection of these principles not as a cover-up, but as a matter of empirical precision.

To look at this more objectively, let’s separate the political motive (why these ideas were sidelined) from the analytical critique (where mainstream economic models differ).

1. The Political Argument: A Shield for Rent-Seekers?

There is strong historical evidence supporting the point that neoclassical economics was shaped as a push back against Henry George and John Locke.

Mason Gaffney co-authored a famous book, The Corruption of Economics, on the topic. He argued that early neoclassical pioneers (like John Bates Clark)—heavily funded by wealthy landowners and robber baron universities—deliberately conflated “land” with “capital” into a single factor of production.

By hiding land as a distinct entity, they achieved two things that benefit rent-seekers:

• Moral Equivalence: They made making money from owning land (rent-seeking) look exactly the same as making money from building a factory (capital investment).
• Tax Obfuscation: By arguing that all factors of production are essentially the same, they made broad-based income and sales taxes seem “fairer” than targeting land, allowing land speculators to quietly pocket unearned community-generated wealth.

From this viewpoint, denying ATCOR and EBCOR serves as a highly effective intellectual smoke screen for the rentier class.

2. The Analytical Counterargument: Where Mainstream Models Clash

While the political history reveals clear biases, mainstream public finance economists argue their objection to ATCOR/EBCOR is rooted in how actual markets function under pressure. They point to several real-world frictions where the maths of ATCOR doesn’t hold perfectly:

• The “Sticky” Labor Problem: For ATCOR to be 100% true, labor must be perfectly mobile—if a city raises income tax, workers must instantly leave until landlords drop rents to compensate. In reality, human beings are not perfectly fluid capital. Because of family ties, immigration laws, and moving costs, a tax increase often genuinely lowers a worker’s standard of living rather than being perfectly passed downward into lower land rents.
• Global vs. Local Capital: While financial capital is highly mobile globally, land markets are local. If a country imposes a highly distorting corporate tax, capital might flee, which does lower land values locally (supporting ATCOR). But if the tax distorts the entire global economy, the overall loss in wealth doesn’t just lower rent; it reduces the absolute global capacity to innovate and produce.
• Deadweight Loss is Distributive Destruction: Mainstream economists agree that “bad taxes” create massive excess burdens (EBCOR). However, they view this deadweight loss as wealth that is permanently destroyed or failed to be created in the first place, rather than a neat pile of money that was specifically subtracted from a landlord’s potential ledger.

Summary: Two Different Lens on the Same Problem

Ultimately, whether we the rejection of ATCOR/EBCOR as an obfuscation depends on one’s view of economic history. If we look through a political economy lens, it looks like a highly successful campaign to legitimize land speculation. If we look through a mathematical modeling lens, it may look otherwise.

Implementation of a system based on the public capture of economic rents is an ongoing, justice-based intellectual and legislative proposition. Economists across the political spectrum have long championed the principle as the ultimate “just tax,” a complete shift from taxing purchases (GST/sales tax) and earned incomes (income taxes).

The transition to capturing economic rents needs to happen gradually through localized policy shifts, legislative work, and pilot programs.

Where and When It Has Commenced

While a pure Georgist economy doesn’t exist, the principle of capturing economic rent has been successfully implemented in several places:

• Singapore (Ongoing): Often cited as the closest modern equivalent, the Singaporean government owns roughly 90% of the land in the country. It leases this land to citizens and businesses, effectively capturing the economic rent of the nation’s development to fund world-class infrastructure and public services without relying entirely on high income taxes.
• Pennsylvania, USA (Since 1913): Several cities in Pennsylvania, most notably Harrisburg, utilize a “split-rate property tax.” They tax the value of the land at a significantly higher rate than the value of the buildings on top of it. When Harrisburg adopted this system, it successfully revitalized its downtown area by penalizing land speculators and rewarding property developers.
• Canberra, Australia (Ongoing Transition): The ACT is currently in the middle of a 20-year transition plan commenced in 2012. The territory is gradually abolishing inefficient transaction taxes—like stamp duty—and replacing them with a system of general land rates, which is a direct form of public rent capture.

Barriers to a Full Start

To completely replace income and consumption taxes with rent capture, governments face structural hurdles:

1. The Valuation Challenge: To capture economic rent accurately, governments must separate the unimproved value of land from the value of improvements (buildings or technology), as is currently done in Australia. (Refer Table 61 of the National Accounts.)
2. Political Resistance: Transitioning to this system creates direct conflict with politically powerful land speculators, real estate monopolies, and homeowners who view untaxed land appreciation as a primary wealth building vehicle.
3. Redefining “Rent” for the Digital Age: As with AI data-scraping, economic rent is no longer simply about physical land. It now includes digital monopolies, natural resources, orbital satellites, and data aggregates. Defining how to capture these rents without stifling innovation is a current debate between lawmakers.

How a Nation “Commences” this Shift

A country typically starts this economic transition through three deliberate fiscal steps:

• Step 1: Establish a comprehensive, transparent public registry to value natural monopolies, land, and shared resources.
• Step 2: Gradually lower individual income tax brackets and cut consumption taxes (like GST).
• Step 3: Simultaneously raise the tax rate on the unimproved value of land and natural resources to offset the revenue difference, ensuring that those who hold exclusive access to common resources pay the public for the privilege.

Australian mortgage stress has reached critical levels in late 2026, driven by a series of aggressive interest rate hikes that have pushed household budgets to their absolute limits. Following four Reserve Bank of Australia (RBA) cash rate increases in 2026, the official cash rate now stands at a 15-year high of 4.60%. [1, 2, 3]

Independent modelling shows that over 33% of all Australian mortgage holders (approximately 1.818 million people) are now classified as “at risk” of mortgage stress, while 22.7% are “extremely at risk”. This has triggered a massive rush toward refinancing as families attempt to stay afloat. [1, 2, 3]

_________________

The USA real estate market has reached a critical turning point where nominal prices are plateauing. They have officially topped out in inflation-adjusted (real) terms. Major real estate indices show that while the national median home price is hovering near all-time highs, a widening regional divergence means several previously booming markets are experiencing notable price corrections. [1, 2, 3, 4]

The primary driver behind this stagnation is an extreme affordability crisis caused by a combination of high property costs and average 30-year fixed mortgage rates surging back above 7.4%. [1, 2]

__________________

The Mortgage

Will Carleton (1845-1912) “Farm Festivals”

We worked through spring and winter, through summer and through fall, But the mortgage worked the hardest and steadiest of all: It worked on nights and Sundays, it worked each holiday It settled down among us, and it never went away; Whatever we kept from it seemed almost as bad as theft It watched us every minute and it ruled us right and left.

The rust and blight were with us sometimes and sometimes not. The dark-browed, scowling mortgage was forever on the spot. The weevil and the cutworm, they went as well as came, The mortgage stayed for ever eating hearty all the same. It nailed up every window, stood guard on every door, And happiness and sunshine made their home with us no more.

Till with failing crops and sickness we got stalled upon the grade, And there came a dark day on us when the interest wasn’t paid. And there came a sharp foreclosure, and I kind of lost my hold, And grew weary and discouraged, and the farm was cheaply sold. The children left and scattered, when they hardly yet were grown; My wife she pined and perished, and I found myself alone.

What she died of was a mystery, and the doctor never knew, But I knew she died of mortgage, just as well’s I wanted to. If to trace a hidden sorrow were within the doctor’s art, They’d have found a mortgage lying on that woman’s broken heart. Worm or beetle, drought or tempest, on a farmer’s land may fall, But for first class ruination trust a mortgage ‘gainst them all.

________________________________

Reprinted in PROGRESS, February 1928

HOUSEHOLD DEBT PROBLEMS

While European outliers like Norway use structural wealth and high incomes to safely carry high debt-to-income loads, Australia remains uniquely vulnerable because such a massive portion of its debt is concentrated strictly in high-value, domestic real estate. [1, 2]

…. as per Henry George.

“Whence shall come the new barbarians? Go through the squalid quarters of great cities, and you may see, even now, their gathering hordes! How shall learning perish? Men will cease to read, and books will kindle fires and be turned into cartridges.” [1, 2]

– Henry George

The almost forgotten sub-title of George’s Progress and Poverty is “An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy“.

As the next depression looms, people have begun rioting in Europe and others are committing mindless violence in Australian streets. It’s beyond time for our political representative to apply this remedy, a simple fiscal adjustment that–despite delivering socioeconomic justice to everyone–is likely to once again be resisted by rent seeking interests. But that’s no excuse not to try, Australian politicians!

PART ONE

PART TWO

~~~

While online platforms widely anticipate a major recession next year, Australian mainstream media remains noticeably silent. This omission likely stems from fears that discussing a downturn might hasten the event. News outlets may also be hesitant to alienate banking and real estate advertisers, who provide significant financial backing.

The ABC has been deterred from entering this space to provide information or ask questions. Repeated accusations of a “left-wing bias”–and outright calls to ban the broadcaster–have had a cautionary effect.

But how much depth can we go into on such shallow subjects?

“Insiders” has become a shadow of what once it was. Would its former host, Barrie Cassidy, have the fortitude to broach the subject that David Speers obviously hasn’t?