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20160414_1_0024

Rewriting the Sentence

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in collaboration with Spotlight on Poverty and Opportunity

Tax privilege, not productive work

File under: tax policy, opportunity, privilege, taxes

0 (0 votes)

From: Chuck M., Chicago, IL

A pair of complementary fiscal reforms would vastly reduce unemployment and poverty.

(1) Stop taxing productive work. That means no payroll tax and no income tax on wages or capital goods.

(2) Tax privilege at a very high rate. A big part of privilege is the private ownership of land. So this means a tax based on land value. (This preserves private ownership, while eliminating speculation.) Other kinds of privilege include valuable mineral leases, underpriced grazing rights on federal lands, electromagnetic spectrum, and a number of others. It may be desirable to place part of the land value tax not on the owner of the land, but on the holder of the mortgage.

The net result of these two changes is that effective wages go up, but the cost of hiring labor becomes cheaper, so unemployment is vastly reduced. Resources withheld for speculative purposes become available to those who want to use them productively.

This is a simple concept but has many ramifications -- more than one would likely want to read here. Many useful papers have been written to describe and explain. One good one is Fred Foldvary's "The Ultimate Tax Reform: Public Revenue from Land Rent."


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American RadioWorks |
20160414_1_0024

Rewriting the Sentence

Every year 700,000 inmates leave prison. Strong evidence shows that those who have a college degree are less likely to come back. So after an abrupt reversal 20 years ago, some prisons try to maintain college education for prisoners.

Recent Posts

  • 09.01.16

    What It Takes: Chasing Graduation at High-Poverty High Schools

    The nation's high school graduation rate is at an all-time high, but high-poverty schools face a stubborn challenge. Schools in Miami and Pasadena are trying to do things differently.
  • 08.26.16

    Spare the Rod

    A get-tough attitude prevailed among educators in the 1980s and 1990s, but research shows that zero-tolerance policies don't make schools safer and lead to disproportionate discipline for students of color.
  • 08.18.16

    Stuck at Square One

    A system meant to give college students a better shot at succeeding is actually getting in the way of many, costing them time and money and taking a particular toll on students of color.
  • 08.11.16

    Hungry hungry students

    When was the last time you ate? In one survey, 7 percent of college students said they went an entire day without eating.