Put the Moxi, not Puny, in MUNI

When one reads the editor-in-chief dismissing the value of San Francisco self-described left liberals taking the case for reforming the property tax to the public--and this is substantially what Tim Redmond said in a 48 Hills editorial Thursday, July 6--a cold gray city of defeatism and smug elitism guts the hopes and expectations of 3rd Street. I say smug elitism because not a few of those with a media or institutional platform in this city are sitting on Prop 13 suppressed land valuations that were they to take a principled position, would substantially raise their own taxes.

Consuming the Earth affects everyone else's opportunity to use the Earth in making a livelihood. When I and a large cadre of fellow Americans hold title to a piece of land in the USA, that means a substantial cadre of fellow Americans have access to land for a home or a business or, for that matter, for recreation, only if the landless first pay my sort--the landowning--for access. Now it's true that commercial real estate titleholders hold sway over the huger part of land values in the US, but it's disingenuous for Redmond and others with thought-shaping platforms to pretend that when they, too, are titleholders of land, that their monopoly hold on the material universe doesn't skew towards a degree of desperation the lives of the whole population, but especially of the largely unlanded folk of 3rd Street (and their peers). The liberal democratic socialists (and the multi-astral constellation of other do-gooders) who hurrah revising Prop 13 so that commercial real estate would pay tax at MARKET valuation, but who conveniently excuse the home landowner from the equation, are simply not being principled in their thought. Consuming land, whether commercial real estate or not, alienates the rest of society from land. A principled position would be to require anyone enabled by land title to exclude others from use of that piece of the Earth, to pay the value of that exclusionary power to society.

Turning to a related social question, the thought-swayers of self-professed Left persuasion do a poor job of making the case for small business when, in principle, they argue for taxes on productive activity, including doing business. To be sure, most Left voices specify that small businesses should be excused from tax levels meant to level incomes. Still, there is an implicit conviction amongst so many on the Left that the act of being productive in meeting consumer demand is suspicious. That conviction tries to hide behind the vague, dissembling mumble that there is an acceptable level of reward for meeting consumer demand, but that large aggregations of people into a corporation are, by dint of their scales of economy, receiving unjust amounts of reward for their efficiency. Yes, regulatory fees on doing business fall disproportionately heavily on small businesses than on large, but there is in the "Eat the Rich" sentiment a gross, careless understanding of from whence larger businesses gain their advantage over small businesses. It has to do with monopoly. Large businesses tend to own their real estate, and thus they internalize as income the differential in what they pay to use land and the location rent most small businesses must pay.

Similarly, large businesses dependent upon natural resources are more often than small such businesses to own or control the price and access to such resources, whereas small businesses must pay the full market price for coal, petroleum, forest, coltan, and other resources. Redmond and fellow pundits (and these thought-shapers are mere pundits so long as they fail to rigorously explore first principles) take little if any account of the financial advantages of land value ownership that, I argue, account for so much bigger businesses' so-called profits. Socialize land values and then we can begin to discern whether doing business is ipso facto suspicious, or whether it is the customary monopoly on land access and land values that is what society should "eat."

Don't take my word for it. Go yourself to five or six small business owners and ask them, "Do you find business taxes burdensome? Would you be better off and more able to compete with larger businesses if taxes fell not upon your earnings, but simply upon the location value your business occupies?" Many will say, "A tax on my location? I'm already paying my landlord for that." To which the principled response is, "That's right, and wouldn't it be desirable to have that portion of the rent you pay that pertains to location (as opposed to pertaining to the value of improvements) be the end of your tax due, with it collected by the landlord, but then passed along by him to the various government jurisdictions?"

This is but a brief treatment of the unconsidered thinking of so many on the Left who would right significant social troubles with specious economic analysis. In the absence of rigorous reflection on the land question, we can expect the earnest voices of thought-swayers to accomplish near nothing in liberating the nation's 3rd Streets from alienation from place.

By way of supplying one example of the power of correctly addressing the land question, I'll explain the title of this article. The United States, no doubt much to the surprise of most readers, has one of the most efficient public transport systems in the world. Tens of millions of people are safely and speedily conveyed to their destinations every year, and without a fare having to be paid! I refer to elevators in commercial buildings. The owners of buildings have a great incentive to make their piece of the Earth the site of an attractive destination. Whether its an apartment or condominium building, an office building, a retail store, etc., the commercial user of a piece of land seeks to optimize their income by making getting to destinations within their building easy. They do so by providing elevator service. Lay that elevator model perpendicular. Oblige the owners of land to pay in full for the annual value of that land, and they'll desire Euro or Asian quality public transportation to get consumers of the land owners' productive activity to their business sites. In other words, taxing away the full annual value of land will enable society to build horizontal fare-free public transportation with the same predictability that consumers expect to find vertical transportation in buildings.

Socialized land values put moxi in MUNI. Sabe?