What is it that has our media going into infinite detail about rocketing home prices keeping many young families renting, and increasing rents sending renters back to mum and dad’s, or out onto the streets, without questioning the cause of their increasingly desperate plight?
Individuals are interviewed ad infinitum about their parlous circumstances. Suggestions are made about what private enterprise can do about it, or what government assistance may be given: –
“Can’t we allow greater density zoning to be able to build housing towers?”
“How about build-to-rent?”
“Put caps on rent increases?”
“Wouldn’t government financial assistance help renters?”
Whoever asks what got us to this parlous situation?
Maybe we operate under a corrupted system of government? One in which the tax regime fosters the commodification of land by nominating it “the right to private property”. Are not our wages and profits the real private property? Why do our tax systems tax these earned incomes at the expense of pumping land prices and private rents?
Except for speculative rent seekers, it’s not a pretty picture:
After all, if we were tax land values at greater rates, and wages, profits, goods and services less, land prices and the cost of goods and services will decline. That will surely assist in putting a safe and secure roof over people’s heads?
“Look, the high cost of housing is simply a matter of the under-supply of houses!”
Nup!
“So you saying we should tax land rents away? That sounds communist!” Not at all, communists don’t tax land rent to any significant extent. Xi Jinping tried to introduce a tax on land values in China in 2022 and was thoroughly rebuffed by the party.
Was the USA communist when much of its land rent was taxed during the Progressive Era? By the way, Australia did it even better, at all three levels of government, Australia’s first tax office being set up in 1910 to introduce not an income tax but the federal land tax.
You’ll note that, after some thirty years, neoclassical won the day at the 1930s depression telling the world: “There’s not enough rent. We need to tax your incomes!” There is enough rent, of course, because all taxes come out of rent.
That brings us to the root of the problem. Whether in communist countries or democracies, the rent-seeker, especially the BIG rent-seeker has come to favor himself at great cost to the generality of people. And big rent seekers tend to control the media both in democracies and communist countries. Maybe that answers the initial question: What is it?
Public capture of land rent is the only way to tackle the commodification and privatisation of land and the social problems that this has generated.
First nations peoples always understood this; the great philosophers always understood this; the great religions once understood this.
Why don’t we? Why is this? Cui bono?