You’re fired!

The untold story

Now that Joe Biden’s won the election, it’s impossible that Donald Trump will hand the presidency over gracefully. That’s just the way he is. Two year-olds don’t know how to lose. That’s problematical, and we wish the US well during the political transition.

Tens of thousands of superficial and lightweight words are being written and spoken about what’s about to change. Yes, we do need to confront existential crises: the transition; the pandemic; nation-healing; climate change; China policy ……. but no one’s even close to explaining the increasing poverty and disappearance of the middle class.

What’s happened to the once great USA that political polarisation has become so extreme? Sure, Donald Trump’s weird, but does that mean that the half of the nation supporting him also consists of fruitcakes? Unlikely! They’re troubled – as are the winners.

The vast majority of Americans are rightly feeling badly done by – but for completely opposite and inadequate reasons: –

Republicans believe too much government is why enterprise is no longer ‘free’, and why they’re missing out financially: “It’s the drift into welfare, not the least medical welfare, and increasing socialism.” “What’s happening to our liberty?” “We’re headed into communism!”

Democrats want the government to increase social welfare because Americans are missing out on health and in the distribution of wealth. “Just look how our salaries have declined in real terms over the last forty years!” “Wealth is trickling up to the 0.1%, so the government must intervene to stop this fascist drift!”

The labels ‘communist’ and ‘fascist’ are drivel, neither addressing or solving what’s fundamentally a distributional problem. No commentator is to be found addressing this overarching problem of increasing poverty that’s also seeing the middle class disappear.

This process was meticulously explained 141 years ago, but no government since that time has had the intestinal fortitude to attack rentier capitalism head-on. They continue to fiddle, skirting around the key economic issue which could be remedied by a simple fiscal adjustment.

Good luck, Joe Biden!

Meanwhile …..

A valuer’s lament

At the Annual General Meeting of the Victorian Branch of the Australian Institute of Valuers on 7 March 1985, I moved a motion that the Institute should support a submission to the 1985 National Tax Reform Summit in favour of a federal land tax so other taxes might be reduced. I didn’t have high hopes of the motion being carried, but I did believe there would remain support for the principles behind the 1910 federal land tax which had been in existence for sixteen years when the Institute was founded in 1926. There wasn’t. I was probably fortunate to have my motion seconded. I was given short shrift in presenting my case by the branch president who reduced my time allocated to speak to the motion.

How things change, I thought. Land tax valuers had been behind the move to establish the Institute of Valuers. The Australian Taxation Office was actually founded to oversee the federal land tax: there was no federal income tax during the period that became known as the ‘Progressive Era’.

My colleagues were virtually all in agreement that my motion was too ‘political’. I thought to myself that having nothing at all to say to a national tax summit about the principles behind statutory valuation issues to which the profession has been deeply committed is very political.

As I moved to the back of the room to get a cup of tea at the end of the meeting, the large number of my fellow valuers divided sharply, like the parting of the Red Sea. At that moment, I understood the loneliness of Emerson’s “Whoso would be a man must be a nonconformist.” My gloom from colleagues’ virtually unanimous rejection of the motion was broken, however, when a newbie valuer with his own cup of tea in one hand presented another to me with a cheery greeting.   

Whether or not arising from this event, I was nevertheless invited as president of Tax Reform Australia to speak to two of the Institute’s formal Discussion Groups about Henry George’s ideas on the taxing of land values.

Despite the great work done by the Institute’s Municipal Group of Valuers, the long term trend of my professional body has been to relegate the position of statutory valuations. Retrogression continued when the Australian Institute of Valuers and Land Economists became the Australian Property Institute in 1990, some of its statements indistinguishable from those of the property lobby. For example, the Victorian API (Australian Property Institute) News of 8 May 2013 had an item beginning as follows:

Property taxes shoulder Vic budget

THE Victorian government is becoming addicted to property taxes, which will raise over $6 billion in forward estimates for the 2013-14 Victorian State Budget. 

This is apparently being apolitical. I felt it my duty to respond:

An institute purportedly representing valuers—it was after all founded in 1910 by Commonwealth Taxation Office valuers—should know a very good case for reforming and extending current state land taxes was made in a thoroughgoing report by the Henry Tax Review panel. The words “becoming addicted” in the sentence above therefore disgraces both the API and the person who wrote them.   –    Bryan Kavanagh AAPI

As with mainstream media, my professional institute progresses indecorously, apparently believing it must not stand in the way of increasingly higher and higher land prices . In this they’re onside with the Federal Government and the Reserve Bank of Australia.