3.7.1-5: Ancient Truths, Ancient Roots
Module 3, Section 7.1-5
Ancient Truths, Ancient Roots
7.1 Confucius (BC 551-479), Chinese philosopher, said:
When the Great Way prevailed, natural resources were fully used for the benefit of all and not appropriated for selfish ends... This was the Age of the Great Commonwealth of peace and prosperity.
Mencius, the philosopher and contemporary of Confucius in ancient China, said:
In the market places, charge land-rent, but don't tax the goods.
Sun Yat-sen (1866-1925), Chinese revolutionary, "Father of the Nation", first president of the Republic of China, wrote:
The (land tax) as the only means of supporting the government is an infinitely just, reasonable, and equitably distributed tax... The centuries of heavy and irregular taxation for the benefit of the Manchus have shown China the injustice of any other system of taxation… When modern, enlightened cities levy land taxes, the burdens upon the common people are lightened, and many other advantages follow.
7.2 Economic historians (see the chapter on Mesopotamia and Classical Antiquity by Michael Hudson in the book Land Value Taxation Around the World) who have studied systems of land tenure and taxation back through antiquity have discovered that the more fiscal policy (from the Persian word “fisc” the basket used to collect money or goods from Persia’s provinces) is related to “benefits received” and “ability to pay” the fairer and more democratic the society. But as public and communal lands were privatized, wealthy landholders increased their political power and democracies devolved into oligarchies. The richest people avoided taxation while shifting the tax burden onto wealth producers. This is the situation again today as can be seen from this diagram from a Worldwatch book by David Roodman - The Natural Wealth of Nations:
7.4 Approximating the composition of the world's $7.5 trillion tax pie reveals that 93% of taxes fall on work and invesntment while only 3% is collected from environmentally damaging activities. A mere 4% of global tax revenue is captured from natural resource use and access fees.
7.5 Where once governments relied on property taxes which captured land rent, they have increasingly shifted to sales and payroll taxes that fall mainly on the lower 90 percent of the people. In the ancient past when exploitative conditions of economic injustice emerged there would be declared “clean slates” and “jubilees” which cancelled debt and redistributed land. Land Value Capture is resonant with these earlier ways to end monopoly and build a fair economy.