All posts by Bryan Kavanagh

I'm a real estate valuer who worked in the Australian Taxation Office (ATO) and Commonwealth Bank of Australia (CBA) before co-founding Westlink Consulting, a real estate valuation practice. I discovered, by leaving publicly-generated land rents to be privately capitalised by banks and individuals into escalating land price bubbles, this generates repetitive recessions and financial depressions. We need a tax-switch: from wages, profits and commodities onto economic rents/unearned incomes, if we are to create prosperity and minimise excessive private debt.

DECIDE FOR YOURSELF

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Meanwhile, apart from improving the public housing situation, as argued by Cameron Murray, if we also taxed rent marginally more, in such a way as not to collapse markets?

So, Cam’s increase investment in cheaper public housing as soon as practicable, then when world real estate markets collapse themselves (from 2026/27?) may be the time to implement the 2nd alternative?

SOLVING THE PROBLEM

The political left believes we aren’t taxed sufficiently if we wish to solve our societal problems. After all: “We’re not a highly-taxed country!

Unfortunately, we are. And taxes insert enormous deadweight losses into world economies.

On the other hand, the political right believes that title to land conveys more than exclusive possession of a site: “This is my private property!

It isn’t, you know. Land is common to humanity, and although you have been granted exclusive possession of your site(s), you have an ongoing liability to pay the rent.

That the stances of left and right are both misguided explains the increasingly parlous state of world economies.

Virtually all social philosophers recognised the need to pay the land rent on the sites we occupy, but we’ve come to defer to those who want to treat land as private property, to speculate in real estate, and who want our incomes and purchases taxed.

There is an alternative.

Neoclassical economists have become accustomed to the currently misbegotten social arrangement, then they wonder why we have troubled economies and inflation. Maybe they need to see that taxes and land prices are the generators of inflation?

Once we understand that all taxes come out of rent (ATCOR) & their excess burden come out of rent (EBCOR), we’ll see the annual rent of our natural resources is some 50% of the economy and that’s plenty to have working for us all, not just for rent-seekers. For a country having its own currency, this may be seen as setting the upper limit for national government spending, as per ‘modern monetary theory’ – simply a lens towards the need to tax land values and deliver a decent universal income to abolish poverty.

So, I wonder whether a little repetition may help our neoclassical economist friends:

High taxes and land prices will increase inflation. High taxes and land prices will increase inflation. High taxes and land prices will increase inflation. High taxes and land prices will increase inflation. High taxes ….

Probably not!


WAR, WAR, WHAT IS IT GOOD FOR?

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Although there are many reasons given for the cause of wars, at bottom, they’re all about the rights and wrong of land grabbing, the more recent of these being Ukraine and Palestine.

You may listen, as I did last night, to philosophers solicitously (and lengthily) excusing themselves on radio for getting into particular areas which may appear to be a little prejudicial to one side or the other but, incredibly, without at all commenting on the initial land grab. Fortunately, they appeared to see the war in Gaza as involving the deaths of (we) humans, rather than in terms of ‘collateral damage’ (as seemingly preferred by warmongers).

I’d earlier seen a little girl on the TV news say: “Palestine will be free because that’s their right to land.” OK, she may have been influenced by her parents, but one way or another she has come to see that the common right of people to land is paramount in understanding the Gazan war.

There are things that blind us to this understanding. The most important of these is that land is indeed the common inheritance of all humanity. Many of us have come to believe otherwise. Although we may have a title to the exclusive possession of a piece of land, that does not magically make land our ‘private property’. Our private property is all other things of ours other than the land to which we’ve been granted exclusive occupancy.

There was a bloke by the name of Jesus Christ who tried to make this point in terms of the Mosaic Law: that land is common to humanity and must be rented, not sold into perpetuity. He said he didn’t come to establish a new religion and got pretty upset with mortgage brokers in the temple. They certainly got him back, and Christians like to believe that ‘he died for our sins’ rather than having terminally pissed off the money lenders by physically confronting them. Apparently, he was wrong about the Mosaic Law though, because both Jews and Christians now believe that the more subtle form of chattel slavery–private ‘ownership’ of land–is OK. One bloke, the current Pope, still doesn’t believe this, and many Catholics want him removed for his ‘communist’ [read Henry Georgist’] views.

Land has become the ‘private property’ of those who accumulate it and go to wars to make further private property of it. Many of us have come to believe the commodification of land and all the socio-economic problems stemming from it are quite OK. They aren’t.