Land value tax for social peace

Taxation is the key to both economic development or stagnation and continued enrichment for the few and misery for the many. But before this is turned to an instrument of justice and prosperity for all, a change of mind is necessary.

Our general human condition reminds me of the well-known cave story that Plato uses to show common understanding. In his work The Republic, Plato has Socrates describe a group of people who have lived shackled to the wall of a cave and facing a blank wall for all of their life. They watch shadows projected on the wall from objects passing in front of a fire behind them and give names to these shadows. These shadows are the prisoners’ reality.  The inmates of this cave do not even have the desire to leave their prison, for they know no better life.

At some point, one of the prisoners frees himself, goes out of the cave and sees the real light of the sun and the objects of the real world. He then returns to tell his fellow men. But as they all have considered the shadows to be a reality for their whole life, they find it very difficult, even impossible, to believe his story.

 We all are prisoners in the cave of our own mind

The multitude of impressions we have from the rime our birth, the various emotions, the thoughts and ideas all create a thick-walled cell that we are imprisoned in. Thus, we see the world through a window that permits the entry of very little light. The smaller the window, the less light that enters into our minds. But, most importantly, we are unaware of this condition.

Coming now to the life of the community, we all want to live and work as fully as possible and according to our talents and skills. We suffer, however, from an unjust and oppressive system of taxation which restricts all our efforts.  We have become far too used to this to the point that if somebody explains how we should correct and what the right way to support a government, without creating conditions of poverty and unhappiness for most people, we find it difficult to understand and even harder to believe.

Of course, there are people that deny this truth because it touches their personal interests. But even when the facts fully support our own interests and fortunes, we still find it almost impossible to see and understand that reality and what it will bring.

We need to spend both time and effort to read and study, keep an open mind and go in-depth into history and philosophy so that we are in a position to identify the main principles of community life.

The times we live in today are offering an opening for change. Everybody declares this. We are in this post-coronavirus era, the economy is suffering globally, and changes are more welcome than ever. But what change? Will it be one that takes us back to the same routine?

If the change that will take place now is headed towards the right direction, our generation, and even more the younger one, will be in a position to enjoy conditions that will offer justice and a better life for all.

There is no doubt that taxation is the backbone of a country’s economy. No economist will deny this. But taxation with justice is what we are looking for.

Land is the place where all efforts and actions for production take place. Undeveloped land that carries no other man-made structures has a value, and this value depends on how strong the public’s desire is to own that land. The more central and the more advantageous for the production and exchange of goods and services, the more desirable. The more desirable the higher the price of the bare surface land, with no man-made improvements on it.

It is easy to understand that this value arises due to the existence of the community and increases because of the community’s advancement in population and the availability of public services, science and technology, and the arts. It is easy to also understand that this value, therefore, belongs to the community and should form its income to be used for the services the community needs and other essential expenses.

At the same time, estimating the value of land, of different locations, is the easiest thing. All real estate brokers know the land values in the areas that they work. A simple percentage of the value of the land will be very easy to identify and the collection of this tax will be also very easy.

You will not need armies of tax collectors, accountants, tax advisers, and all these professions that are offering zero goods to the citizens but are just moving papers with numbers and graphs making life difficult for everybody, both individuals and corporations.

Imagine, that about one million people work in this unproductive field in a country like Greece, which has a population of only 10 million. All of these people would go back to production, thus offering more useful goods and services, more wealth to their community. They will have no burden and no need to hide from the tax officers; corruption amongst public servants is non-existent and growth becomes higher than ever while it constantly advances, as Adam Smith foresaw in The Wealth of Nations.

It is not easy to imagine life in a place that allows one to have a return of their efforts without being taxed for them, and that they can calculate their costs in a simple way while not having to keep receipts and invoices unless they want them for their own accounting. Or that an individual does not need to keep books for the Tax office and the secret books that almost everyone keeps.

In that case, it won’t be necessary to search for a tax paradise, an offshore entity, a foreign account, or live in fear that tax officers will audit your bank accounts.

It is not easy to imagine or believe that such conditions are realizable.

Nevertheless, this system could exist if people were led to understand and the leaders had the will to make this real change, it could be implemented for the benefit of all.

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