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May 17th, 2012

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Q17: - 2009/04/15 10:32 GMT How can elite capture of land reforms be prevented such that land reforms become more pro-poor and environmentally friendly?
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Re:Q17: - 2009/04/23 18:44 GMT Introduce land cieling as the core aspect of the reform process. It is all about land!
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Re:Q17: - 2009/04/23 21:27 GMT The most pertinent angle for transparency, efficiency and equity is Land Value Taxation. We all understand the planet is valuable. Why doesn't the economic system reflect this?

We also despise rules and paperwork. The current tax system (125 taxes here in Australia) hurts small business owners with compliance and deadweight losses.

We can attract the elite through the efficiency arguments. At this time of the GFC, and with Fannie Mae execs committing suicide, it's time the elite realised that not only is the boom-bust nature of monopoly capitalism hurting the planet with climate change, but trillions are lost every 14 years with tragic recessions.

LVT backed up with eco taxes is pro poor and env friendly. The rich live in better locations and so pay more in LVT as their land rents are higher. The poor live further out and so don't pay as much.

The eco-taxes are regressive, but are offset by the progressive nature of LVT.

LVT can make public transport self funding by recycling the land rents in a process of land value capture for the public (rather than windfall gains for the wealthiest). This is pro poor.

Additionally, the availability of many vacant sites pushes land rents down. Urban sprawl is curtailed. Check the I Want to Live Here reports: www.earthsharing.org.au/campaigns/

With less tax paperwork, the creative rebels out there can start their business without having to employ nerdy accountants. People can look after themselves. Demand for labour increases with the rise of small business, pushing up wages, re-tilting the playing field back towards equality of opportunity.

Land valuers play an important role in this process. Land must be valued yearly. Individual land values must be published on public noticeboards AND the web. Valuations can be challenged or a third party valuer brought in for a 2nd opinion. This shouldn't be necessary with effective software and google earth etc.

Participatory democracy should be encouraged so that the people not only vote for their candidate, but give preferences 1 - 5 of where they want their money spent. Would government then have the mandate for war or massive infrastructure projects near elite property holdings? Download the Property Developers Guide to Sydney (13MB) - www.sylvia.nsw.greens.org.au/webdocs/D-Map_v110906.pdf">

If only we had an economic model spelling out these advantages in statistical format!
Listen to the Renegade Economists podcast I co-host, covering land rent issues weekly - http://www.earthsharing.org.au/2008/05/26/renegade-economists-now-podcasting/
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Stein Holden

 
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Re:Q17: - 2009/04/24 18:29 GMT Do you think land value taxation is relevant in poor countries where all land users are poor? Or is it only something for ruch countries and where you have rich landowners?
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Stein Holden

 
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Re:Q17: - 2009/04/24 18:33 GMT Ethiopia appears to have been quite successful in eliminating the landlord elite in the 1975 reform when a maximum ceiling of 10 ha of land was introduced and where the previous landlords were excluded from leading positions in the local peasant associations that were introduced. But a similar solution may not be a feasible many other places?
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Re:Q17: - 2009/04/29 00:05 GMT HI Steve,

everything is relative. I am sure there are elite in any developing country, intertwined with government as per usual.

The problem with regulative reforms is that they are only to the benefit of one or maybe 2 generations. South Korea and many other E Asian Tigers engaged in regulative land reform post WW2. Handing everyone 10 ha avoids the 'best use' nature of the market system. Not everyone who receives 10 ha is a good farmer. A drought or 2 later and they sell up, with speculators starting to snaffle up the best locations near the edge of urban boundaries. They sit back and lobby their buddies in govt to expand the urban border (as they do here in Melb, Aust).

The real estate cycle of land monopolisation thus kicks into gear again and one generation gets some benefit. Effective use of tax policy is much more effective to engender long term reform.

Look at Chavez and how far behind he is with his regulative land reform program. Lawyers love it!
Listen to the Renegade Economists podcast I co-host, covering land rent issues weekly - http://www.earthsharing.org.au/2008/05/26/renegade-economists-now-podcasting/
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Re:Q17: - 2009/04/29 06:11 GMT I agree with Eugene Chigbu, when he suggests that a ceiling should be introduced. Take the example of Kenya where huge tracks of (Mau)forest land were grabbed/allocated to a few well placed individuals who, because they already had other parcels of land elsewhere, sub-divided and sold off the forest land to peasant farmers who went ahead to destroy the forests. Kenya and the neigbouring countries that are dependant on the the rain forests are now being faced by an environmental problem of a catastrophic magnitude that needs immediate action to reverse the process.The forest is the source of major rivers that feed majority of the lakes in the region.
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Stein Holden

 
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Re:Q17: - 2009/04/29 11:16 GMT I agree that land value taxation can be an important instrument, particularly if it is made progressive and only implemented if the value is exceeding a certain minimum level. It could be an alternative instrument to administrative or "market-led" redistribution but.... the basic question is why is it not implemented in more countries if it is considered so useful? Because property owners fight against it everywhere and the policy-makers most often are among these....
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Stein Holden

 
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Re:Q17: - 2009/04/29 13:38 GMT Thanks for the interesting example from Kenya. The fact that the land was subdivided and then sold, before the buyers deforested the land may indicate that a maximum ceiling for farm size is no guarantee that the land will not be deforested? It would be very good if you could provide more detailed information about this case. Are we on the downward path of the environmental Kutznetz curve for forests?
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