So much recent news seems to be about problems concerning teachers and farmers. I can speak from both backgrounds, since I grew on a farm (in Valley County, Nebraska) and became a teacher. I like to believe that I have some insight from schools of thought that are rarely, if ever, referred to in most popular discussions.
Few, if any, modern writers seem to see these problems as facets of a general problem of poverty. The usual suggestion is "The rest of the economy is so rich, and my occupation is so poor!" But we need to ask ourselves a few questions. Do we know of any common ordinary fields of endeavor whose members do not feel themselves to be put upon? Farmers and teachers are far from the only ones who are up against the wall.
We are constantly told how good the economy is and that the Fed has things under control. I don't believe it. The evidence of massive hardship is all around us if we would only look and listen. Each person has an explanation of the hardships that beset his own area of endeavor.
I was a farm boy in the early 1930s, and things then were largely the same as now: a few farmers were well off, but most were either struggling or giving up. But so it was with all other pursuits. I don't know who was first singled out for subsidies and other special considerations. Even with such help, we still lost our farm to the finance company.
Many people have come forth with ideas for solving the farmer's plight today. The number of different approaches is not very great. Most of them center around looking for higher sale prices for farm output, or loans to enable holding grain for better markets, or thinking that exports will improve sales.
All of these sound fine at first -- but has anyone noticed any long-term benefits? It is hard to believe that the problem of poverty can be solved for farmers without solving it in general. For a long time now, some professional and amateur economists have seen a major problem in the tax system. The problem is not the total quantity of taxes, but the manner in which they are levied. That is, who pays how much -- and as a penalty for what. One economist referred to our tax system as "harnessing the profit motive backwards." Most countries base their property tax mainly on the improvements such as buildings, machinery, inventories, equipment, etc. These things all benefit other people. A tax on improvements is an inducement to employ less of them. What really hurts is the very expensive but poorly developed city lots that are held for speculative gains. If farmers think they are not hurt by that, they can guess again. Every part of the economy is connected to every other part.
All of the farmers I know wish they could buy supplies for less. I have news for them. No supplier is going to sell for less unless he needs to. But he doesn't need to unless he has a competitor. And he won't get a competitor until it gets easier for someone to become a competitor. The competitor won't appear until he can afford a location and such buildings and equipment as he might need. Enter tax incentives (a tax on bare land makes cheaper to buy, while taxes on buildings and equipment makes such things more expensive).
Unfortunately, advocates of such "incentive taxation" too often emphasize the term "land value tax", forgetting the all-important policy of tax relief on improvements. Farmers react with fear because they think of themselves as land owners. The fact is that the expensive land is in town and farm taxes would actually go down in a land value tax system. Many farms would pay no property taxes at all.
To summarize: the farm problem is a market problem, and the market problem is a city problem, and the city problem is expensive land (taxed too lightly) and expensive buildings (taxed too heavily). This reduces the number of people who would like to sell to farmers, and also the number who would like to buy farm products.
Everett Gross has been saying sensible things about fundamental economics for many decades; at 82 he is still going strong. This piece appeared in the Crete [Nebraska] News on May 16, 2001
Farming policy in the UK is decided by the European Union's Common Agricultural Policy. This seems to make food expensive (by guaranteeing prices) while leaving many farmers poor. Meanwhile builders crave the land for "executive housing".
Todmorden, Yorkshire UK - Friday, September 07, 2001 at 13:29:48 (EDT)
This is simply wonderful, no less than I would expect from Everett Gross.
- Sunday, September 09, 2001 at 11:06:31 (EDT)
The singel tax on land values is the thing of the future,to me as inevidable as the rosy fingered dawn. If we are to have any reasonable hope for the future life of the planet, we must find a way to lay the foundations of economic democray in every country in the world. The environmental problem is at bottom an economic problem- its solution rests in the permanent abolition of human poverty. This can only be acheived by reducing all taxation in every country to one single tax on land alone.Only in this way can we even hope to demolish the corporate power structure that is ever finding new ways to tighten its deadly grip on this fair planet and those who populate it. If you've been looking for a unifying instrument to bring together all the diverse factions of environmentalists,labor unions and champions of social justice in the world today, this is it. Without unity there is no possibility of victory. They must find a way to group their separate causes into one cause and become an irresistable political force bent on a head on collision with the present global power structure and all its devastating greed. The single tax on land values is the stone to bring down this Goliath. It is also the sword to cut through the Gordion knot of all the accumulated evils of our time. It is a simple and practical solution that only requires an adjustment in our taxation system to become effective. It would rid us forever of an extortionate and unjust taxation system that turns the entire working population of this country into criminal suspects and at the same time it would make cheap living and working space available to all. The general population would tend to spread itself out evenly over the countryside and form nucliear farming villages and communities that would offer a healthy balance both city and country life without an excess of either. resulting in the fulfillment of the old Jeffersonian dream of an agrarian economic democracy of small family farms and businesses. The great corporate agribusinesses would in time become a thing of the past as well as the big cities. Think of it! A wholesome, healthy balanced society once again! Fresh air for all, independence for all, prosperity for all and a healthy planet. This is within our grasp.
Mark Haywood <firstname.lastname@example.org>
Davenport, ca usa - Sunday, September 09, 2001 at 21:59:41 (EDT)
Thanks, I appreciate the above materials. But my skeptical friends are going to want hard evidence that tax policy is at the root of the farm's as well as other problems. They think it a bit reductionistic. I also want to believe that a shift in tax policy would bring about the above-mentioned Jeffersonian vision. But perhaps it is more accurate to look at the root at the base of current policy. Is it a lack of an informed and virtuous public, who can understand or care about tax policy? I find that even the highly educated have difficulty understanding basic principles of economic justice.
The Agrarian <email@example.com>
- Monday, September 10, 2001 at 18:20:29 (EDT)
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