How a Georgist Tax on Land can Save the Ecosystem
[An interview of Scott Banker by Eric Lima, a reporter for
Baycurrents.net, an independent newspaper focusing on oceanfront
Brooklyn, New York. Lima interviewed Scott Baker, president of Common
Ground-NYC in the Spring of 20l1. The interview was updated on April
11, 2012. Reprinted in
GroundSwell, July 2012]
Eric Lima: One way to battle climate chaos and the contamination of
vital resources is to demand full restitution from polluters by
charging an eco-tax. Scott Baker, Novelist and President of Common
Ground NYC, discusses in this interview how applying Georgist economic
theory is good for the environment. Baker and the NYC Chapter of
Common Ground-USA, are a Georgist single tax organization looking to
charge for the use and locational value of natural resources and
untaxed production in NYC.
Since 1932, the Henry George Institute for Social Science in NYC has
taught Georgist economic philiosophy. Henry George was an American
writer and political economist who preached that economics could be
applied scientifically through a single tax system in his book
Progress and Poverty published in 1879. His book was an instant
success in Europe and America and is an economics bestseller to this
day. In 1886, he ran for mayor of NYC coming in second, and ran again
in 1897, but died of a heart attack four days before the election.
Henry George is buried at Green-Wood cemetery in Brooklyn.
After his death, institutes were created in the US and Europe
teaching his economic theory. Several communities in countries like
Hong Kong, Taiwan, Australia, South Africa, South Korea and Altoona,
Pennsylvania, here in the United States, now pay only a single tax for
the land they occupy, which pays all the communitys bills, and
excludes all other taxes such as wages or sales taxes. Some consider
Georges Land Value Tax an Eco-tax because it discourages waste.
Columbia University Professor Joseph Stiglitz has praised Georgism
saying: And using natural resource extraction and using land
rents as the basis of taxation is an argument that I think makes an
awful lot of sense
In this interview Baker talks about energy sources, their
environmental impacts and how a Georgist tax on land can save our
EL: How does your organizations concept of the Commons
prevent harmful environmental effects like Fracking, or drilling from
taking place in NYC?
Scott Baker: Well, our organizations mission is Tax reform
along Georgist lines, but we do believe that the Commons - which
includes our water - need to be protected against pollution, or
else it will not be available for everyone. Further, in the case of
fracking, which uses millions of gallons of fresh water, whatever
water is used cannot be used in life-vital functions like drinking or
bathing or sanitation. So we would want to charge a high rent for the
use of water and its spoilage. At some point, we would say No
to a process which imperils the drinking supply for 90% of the
metropolitan regions water supply (i.e. the Catskills
EL: Can you explain the concept of the Commons?
SB: The Commons are what we use in common, literally air, water, land
itself, all of these things were created by nature, not by man, so we
own them all equally in common. We say everybody has a right to those
things. If you use a prime area of land for example, then you should
pay for that privilege. Now if you have a productive factory or a
building which has a lot of rich tenants then you draw enough money
and you can pay for that prime location, but that payment (land tax)
should not go to a landlord because he did not create the location,
that should kick in and go back to the community. So, the Commons are
things that we all share in common and we all have a right to equally.
EL: What is the connection between the concept of the Commons
and a Bill of Rights for nature?
SB: Anybody who pollutes the air, water or land is polluting the
Commons and we should charge for those externalities. A twisted legal
theory says that people not polluting should pay the cost of keeping
something clean. We say you have a right to clean water, air and land,
and anybody who takes that away should pay, and if they take it away
too much, they shouldnt be allowed to do that at all. You
shouldnt be able to poison the earth to the point you cant
breathe or its making you sick. Period! Thats poisoning
the Commons and poisoning the other people who have a right to clean
EL: Does nature have rights?
SB: Do species have rights of their own, or do they have them only
because we need them? Were all part of nature and we have
rights, therefore nature itself has to have rights as well by
extension. How many rights does nature have that we believe we have?
We have to eat and kill to survive. Nevertheless, nature has to live
as well. If we just dilute the planet were in essence saying
only we have a right to survive and nothing else.
EL: Where does your organizations philosophy originate? SB: We
get our philosophy from Henry George back 132 years ago when he wrote
Progress & Poverty. He was the first to coherently organize (and
greatly expand upon) the Physiocratic system that land and location
have a value. He put (his theory) into a book called Progress and
Poverty, which is still the bestselling economics book of all-time.
And we put it into practice by promoting various bills that emphasize
taking location rent and returning it to the community and un-taxing
productive activities such as wages, capital and sales because those
are the things that people produce and people have a right to what
they produce. So we believe the rent which comes from the community
because the number of people and the amenities, commerce and all the
hustle that goes on in the city, in fact, belongs to the community. We
take that back instead of it going into private hands, so people can
produce things. They can build buildings, make cars, they can do all
of these things which require labor acting upon the land to create
things that satisfy human desires. If we do that, people can produce
whatever they want. They wont be discouraged by taxes. Theyll
collect the land rent, which we call land value tax, and return it to
the community, for the benefit of the community.
EL: What do you mean youre taking the rent which comes from the
community out of private hands; you mean youre taking land tax?
SB: We believe in the complete legal right to private property. What
were talking about is an economic right. Its an economic
right to return to the people that which the people created. If you
think about it this way: if a building is in NYC it has one value, if
you move that exact building to the middle of Wyoming or Alaska then
it has a much lesser value, and the only difference is not the
building, but the location. So the location is not something the
builder or the landlord produced, its from the community itself
and all the enhancements that come from living in a bustling urban
community. So that location value really belongs to the community. Were
not taking it away; were returning it to the community that
deserves to have it in the first place.
EL: And how are you returning that value back to the community?
SB: We would take the private collection of rent on the land itself,
only the land; not the building and we would return that back to the
EL: New York City has some of the highest rents in the country, how
are you going to tax the land without taxing the building?
SB: The value of the land is inelastic because people are already
being charged as much as they can bear, thats the market forces.
All were saying is to reallocate whats being charged for
the land part of it back to the community. Let the landlord keep
whatever he makes in his building, and the upkeep, and his
maintenance, and improvements of the building. Now what happens in
practice when you charge more in land value taxes is the land value
price has to go down. So as taxes go up, the price of land goes down,
then the land becomes cheaper to buy and more expensive to rent. That
would be enough money to run everything the government runs. If we
really took all the resource rent (land tax) back for the community,
wed even have some left over for a citizens dividend,
which should be an inherent right of all human beings.
EL: How does your organization plan on implementing this?
SB: We have four local bills, one of which passed. They basically
would inventory and then tax vacant land at a higher rate to encourage
developers and owners to develop the land, instead of hoarding it and
speculating, hoping the price would go up. We tax that and the price
goes down, therefore the developer has an incentive to develop it or
do something, rather than pay the tax or to sell it to someone who
can. More broadly, wed like to do something on a national level
which would probably be similar to the Articles of Confederation
Number (8), which was actually a property tax, except we wouldnt
tax the building. We would only tax the land. That was the original
way the founders sought to pay for government services, but it turned
out that the property owners, which were most of the founders, decided
they didnt want to pay the tax that other people werent
paying. Now we have a different situation because everybody either
pays rent or owns property, so they can do this on a more equitable
basis. We dont have these vast land owners far and few between.
EL: What about a country like China which has many problems with
SB: Theyre not being charged for their externalities, we would
charge them for that. We wouldnt charge them for their
production, in a sense they could produce more efficiently and produce
with less pollution. We dont want to stop them from producing,
we like electricity, we like steel, but we dont like the
pollution. Lets tax the bad things and not the good things.
EL: What would be the consequences of not passing a law
of the Commons and letting everyone pollute without paying for damage?
SB: I think we see it already because China is choking on pollution.
They have to turn to desalination to get water from the ocean. They
cant drink their own rivers and streams. Their air is estimated
to take 10 years off the life of each urban dweller. Its leading
to disease and this is an economic cost, as well as a violation of
human rights. If people and factory owners paid enough there would be
incentives to do something. Some say its a job killer, but its
actually a people saver and an economic saver. New industries will
come up, new improvements that will save peoples lives and save
money. So electricity, steel, and buildings and so forth
tax, but pollution were going to tax. Were not going to
let you foul the earth. Weve been treating the earth as if its
unlimited and its not unlimited. There are about 7 billion
people on this planet and not only is the population rising, but our
resource use is rising geometrically at a much faster rate. Last week
the UN projected 10.1 billion people are going to be on the earth by
the end of this century and that an area the size of Russia will have
to be cultivated just to feed us, its questionable if thats
possible to do.
EL: Can you give examples of some pollution externalities?
SB: There are several recent disasters. In Tennessee the coal ponds,
these giant slurry ponds that keep all the coal ash, burst out and
basically wiped out a neighborhood. This is a danger and we have to
make stronger ponds and we have to recycle that ash, which is possible
to do, or else those people will have to pay so much to keep that
stored that it makes it uneconomical for a coal plan to do that.
EL: How about in NYC?
SB: Well there is a lot of pollution from the cars, and there are
high asthma rates. This comes from all the trucks, especially in the
EL: And how would Common Ground-NYC fix this?
SB: Were in favor of congestion pricing. We believe in charging
the cars coming into the city at the most congested times. Also Meter
side parking, so parking spots go up as they are more in demand, and
we would charge for pollution controls.
EL: What would you do if you were (re)elected?
SB: We support the phasing in of a single tax which means charging
for location and resource values, and un-taxing peoples
productivity. For one thing that would simplify the tax code
immensely; it would also take away the corrupting influences because
you wouldnt have all these loophole hunting lawyers, accountants
and lobbyists. It would be much easier to assess the land, and assess
EL: Has that been implemented somewhere else in the US?
SB: We just had it in Altoona, Pennsylvania.
EL: And how has it worked?
SB: Its driving up the value of the land, because people now
have an opportunity to develop things and build buildings without
being penalized for developments or improvements, so Altoona as
compared to another city like Johnstown, is thriving. Johnstown is not
thriving, its going under. (Now, critics might rightly claim
that we Altoona is not charging enough rent on the land to offset the
increased value that is why the price is going up, despite the
land value tax, or rent. This needs to be addressed by
ongoing assessments that are honest and current.)
EL: How are people being charged for improvements under our current
SB: You have a mixed system where you tax everything. You tax the
buildings, which discourages building. You tax the land, which may
encourage land use but its all mixed together. The better the
the more you tax that building, so youre
discouraging the best improvements possible. In NYC you have vacant
parking lots or buildings that are maybe one story occupied and four
stories vacant, that pay very little property tax. Theres no
incentive to use those buildings, and there are people homeless who
cant pay those rents. We had a situation on 26th street and Park
Ave. where a parking lot was paying one-tenth the property tax of the
building next door a 17-story building. They finally sold that
parking lot because the owner got his price. But for years he was
paying a tiny property tax and able to pay that just from the activity
of the parking lot.
EL: Arent there tax incentives for improvements on buildings?
SB: Yeah, the problem is you give the tax incentive to the developer
of the property, instead of the rental value of the land going back to
the community. So what happens? Youve already taken away revenue
from the city by giving the breaks to the developer, so now you have
to make it up somewhere else and that means traditionally taxing the
productive activity of the middle class or cutting down on services to
the poor. (It is also a subsidy to the developer, which drives the
price up not down, making it harder for non-subsidized developers to
compete, and lessening the opportunity for everyone. This is exactly
the opposite of what we want and what Common Ground proposes.)
EL: In laymens terms, what is the productive activity that theyre
SB: All the things people earn. We tax wages. People pay more, longer
into the year. It may take until June to earn enough to pay their
taxes. We dont want to tax wages at all. We dont want to
tax sales. We dont want to tax actual capital, by capital I mean
cars, factories and buildings, actual tangible things; not stocks or
bonds, those are forms of money and speculation we think should be
taxed. Money is not real wealth. Wealth is tangible things that
satisfy human desires that are made from the resources of the earth.
EL: If someone wants to learn more about your organization, what can
SB: They can go on to our website Commongroundnyc.org. Keep an eye
out for our meetings. We try to work and get these types of measures
passed. (We do other things to raise awareness, for example, we
recently sponsored a panel with Dr. Michael Hudson, Dave Kelley
adviser to Dennis Kucinich, and Georgists and Henry George School
teacher, Andy Mazzone and Common Ground member Dr. Cay Hehner. To
understand our philosophy better,) read Georges Progress and
Poverty and come to the Henry George School and take a 10-week course
on economics for free, and understand how the single tax works.
EL: Do you have any final thoughts?
SB: We are biased towards our planet, and towards our planet with a
certain set of conditions which geologically and over the course of
eons is neither guaranteed nor consistent. In the past, and without
our interventions, the Earth has been a frozen ice-ball. It has also
been so warm that dinosaurs swam in the unfrozen Arctic Ocean. Both
were natural. Neither is conducive to civilization as we know it. (We
need to encourage conditions which are conducive to human civilization
as much as possible, since we now have the power, whether we like it
or not, to influence global climate. Georgism is the only fair way to
EL: Thank You Scott Baker, Novelist and President of Common Ground