I agree absolutely that corporate personhood must be abolished. However, interests in realty can be hidden
Yes, but as I've already explained -- unlike cash holdings, personal property and countless other things of value -- real estate
itself can
not be hidden. And the only reason why anyone would want to hide his "interest" in a particular land title in the first place is that the current tax system allows him to profit from whatever the people who compose the surrounding community do to increase the value of that title:
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http://www.progress.org/fold43.htmLand Speculation: What Is It Bad For?by Fred E. Foldvary, Senior Editor
The cause of every major business-cycle depression is land speculation. This fact was discovered by the American economist Henry George 120 years ago.
Speculators buy land because they expect the price to go up in the future. While waiting for the price to go up, speculators do different things with land.
Some land speculators buy raw or underdeveloped land and just let it sit until they think the time is ripe for development. When many speculators are doing this in some area at the fringe of a city, often developers skip around them to areas further away from the city. That creates land-wasting
urban sprawl, which then requires more roads and longer water pipers and makes it uneconomical to have public transportation. In other cases, when speculators are buying land within a city they expect to be developed soon, development instead shifts to other, less expensive, areas, and the speculators lose out. Society also loses, since that area can stay relatively undeveloped even though it is within the city.
Other land speculators buy land in order to develop, expecting the rise in land value to be a big chunk of their profits. That works out well for the first ones to do it, but at the end of the land boom, when many developers are building and hoping to cash in on the land bonanza, the land value stops rising. Those who bought near the top don't get the land gain profit, and even worse, when the real-estate market crashes, the developers end up with empty houses and office buildings, and shopping centers they where they built but folks aren't coming. The go broke, can't pay back their loans, and the banks fail, making the economy fall even more.
So the reason land speculation causes depressions is that it raises the land price too high for those wanting land for actual use. Speculation adds to the demand for land, making prices go even higher. Land becomes priced for future use, not present-day use. So those wanting sites for residences, offices, hotels, factories, and shopping centers, slow down their investing. Also, during the boom, interest rates that were low start going higher as the central bank (in the US, the Federal Reserve System) reduces the growth of the money supply, increasing interest rates. With costs rising and investment in machinery and construction down, the economy grinds to a halt. Workers get laid off, which then decreases demand, and the economy falls into a recession.
So what causes the depression is the reduction in investment in real estate and other capital goods, caused by rising interest rates and land prices. When the economy falls into the depression, real estate prices and interest rates fall, and now investment becomes profitable, and the recovery starts. For this to happen, the old bad debts have to be cleared, otherwise the financial system is clogged with bad debts, as it is now in Japan, and the new enterprises can't get the credit they need to get going. It also helps a lot if the barriers to new investment are taken down - that means eliminating restrictions and taxes on enterprise.
What makes land speculation dysfunctional - a cause of economic trouble - is not really the speculation itself, but the tax system in which it takes place. The tax systems in the world today mainly tax labor and profits. Some of the tax money goes to build public works, such as subways, freeways, streets, roads, public utilities, parks, security, fire protection, and schooling. These push up land values. So landowners get a government subsidy in the form of increased rent due to infrastructure that workers and businesses, not the landowners, are paying for. So land speculators profit from this
forced transfer of wealth from workers to landowners, if they guess right on where new development will go.
[
Continued...]
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If, on the other hand, the bulk of all land values is used as the sole or primary source of public revenue (as would be the case under a Georgist tax system), then the tax would have to be paid by
someone -- even if that someone is paying the tax (for whatever reason) on behalf of his spouse, sibling or offspring.
and land taxation fails to distinguish between highly profitable corporations and less profitable ones.
If that's a "failure" in the eyes of certain people, it's only because they themselves "fail to distinguish" between the earned incomes of
labor and
capital and the
unearned income of
land. But in the eyes of those who do make this critical distinction, land value taxation actually succeeds where all other taxes fail.
It's obvious your opinion on this will remain contrary to mine, so it appears once again that we'll have to agree to disagree.
