Sharing The Land, Land Rent, and Money Commons and a Little on Conscious Evolution

International Union for Land Value Taxation ConferenceJuly 25, 2013

Gary Flomenhoft, Lecturer, Environmental ScienceFellow, Gund Institute, U. Vermont

Precautionary Principle for Reformers

There is nothing more difficult to carry out, more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For those who would institute change have enemies in all those who profit by the old order, and they have only lukewarm defenders in all those who would profit by the new order.— Nicolo Machiavelli, 1490

Conscious Evolution-Riane Eisler

Dominator to Partnership Economy

DOMINATOR

PARTNERSHIP

Conscious Evolution-Eisler

Dominator to Partnership Economy

DOMINATOR PARTNERSHIP

CARING ECONOMYNEO-LIBERAL ECONOMY

Conscious Evolution-Paradigm Dialectic

Thesis Anti-thesis SynthesisDominator Anti-Dominator Partnership

Patriarchy Feminism Egalitarianism

Anthropocentrism Biocentrism Biospherism

Infinite Growth No Growth Sustainability

Capitalism Communism Caring, Justice, Geoism?

Ecological Economy = Throughput

ECONOMYLabor & Capitaltransform resources

LAND USE(sites)

DEPLETION(sources)

POLLUTION(sinks)

US Severances Taxes (rent): minerals, ores, fuels, forests, fisheries, etc.

(Source:http://www.ncsl.org/issues-research/budget/state-energy-revenues-update.aspx)

http://www.swfinstitute.org/fund-rankings/) Oil, gas, minerals, diamonds, copper, phosphatesEducation, development, pensions, dividends, etc.

Alaska Model: Alaska Permanent Fund(sub-surface minerals public property)

DIVIDENDS

2012 $878.00

2011 $1174.00

2010 $1281.00

2009 $1305.00

2008 $2069.00

2007 $1654.00

2006 1106.96

2005 845.76

2004 919.84

2003 1107.56

2002 1540.76

2001 1850.28

2000 1963.86

1999 1769.84

1998 1540.88

1997 1296.54

1996 1130.68

1995 990.30

1994 983.90

1993 949.46

1992 915.84

1991 931.34

1990 952.63

1989 873.16

1988 826.93

1987 708.19

1986 556.26

1985 404.00

1984 331.29

1983 386.15

1982 1000.00

Sink Rent=Greentaxes

Sink Rent

© Dr. Görres – www.foes.de July 2006 Economic Instruments – Exhibit 12

Energy taxes in Germany increased by 55 percent, additional increase in 2005 through truck toll

FINANCIAL EFFECTS OF 1999 ETR IN GERMANY (IN BILLION EURO)

Energy taxes 2003/2005

Energy taxes

18,7 bn €=

55% in-crease

Electricity (0 → 2,1 cents/kWh)

1998

6,5

5,0

1,8

16,0

22,8~ 34

2005

Road toll for trucks

+ 3,0

Fuel oil (4,1 → 6,2 cents/l)

Diesel (31,7 → 47,2 cents/l)

Petrol (50,1 → 65,6 cents/l)

Natural gas (0,2 → 0,6 cents/kWh)

ETR

~ 53 3,0 Road Toll (0 → 9-14 cents/km)~ 56

Total green taxes almost 90 Bn (incl. tobacco, land etc.)

1999 +4,3

2000 +2,52001 +3,02002 +2,5

2003 +4,3

© Dr. Görres – www.foes.de July 2006 Economic Instruments – Exhibit 13

Almost 90 Percent was recycled to citizens in order to reduce labour cost

1999 GERMAN ETR: RECYCLING OF THE RETURNS

Decrease in pension costs = 16 Bn relief for employers, employees and pensioners

Pension system

Environment Projects • Renewable Energies• Less CO2 in buildings• Tax break bio-fuels

Our Comment:• Great idea, in principle• Less than perfect execution

Economy

Govt.

Social Security

Budget use

Green Tax Shift-VermontVT Taxes-2004

buildings-NICU

Other fees

Tobacco ProductsOther general taxes

TOTAL AIR AND WATERTOTAL WASTE

TOTAL CHEMICALSSpeculative Gains Tax

current use property

land-NICU

CigaretteBeverageCaptive Insurance

Sales & Use

Telecommunications

Telephone CompanyBank Franchise

Insurance

TOTAL ENERGY

Estate Tax

Personal Income

Property Transfer Tax

Meals & Rooms

Corporate Income

Telephone Property

Green Tax Shift-Vermont

$500 Million Green Taxes

Green Tax Shift-Vermont2004-100% GREEN

TOTAL ENERGY36.0%

land 54.5%

TOTAL WASTE5.9%TOTAL CHEMICALS

0.1%

TOTAL AIR AND WATER3.5%

Carbon $300/ton

Land 9.6%

Waste $2/bag

Water 1c/gal>100gals

Chemproduct fee

$300 on pesticides

Capitalism 3.0-Barnes-Common Sector Trusts

VT Common Assets Trust Fund-VCAT

1. Protect certain common assets (such as air and water) for the benefit of present and future generations,

2. Establish a framework under which certain users of those common assets may be assessed fees

3. Deposited into a common assets trust fund

4. Managed so as to protect those assets and serve the interests of present and future people of the state.

VT Common Assets Trust Fund-VCAT

Legislation S.44-2007 MillerH.385-2011 Pearson

• Based on Barnes Capitalism 3.0• Collect revenue on natural and social

assets.• 25% minimum dividend for citizens

Vermont Resources-Sovereign wealth?

No oilNo natural gasNo coalNo precious metalsNo gemstonesNo sunNot much windWhat do have of value?

Vermont Resources

Cows Maple Syrup

VT Common Assets Trust Fund-VCATHow much is it worth?

Natural Common Assets:Air, Fish & Wildlife, Public Forests, Groundwater, Surfacewater, Minerals, Wind,

Social Common Assets:Internet & web, Broadcast Spectrum, Land Value, Financial System, Monetary System

(Pharmaceuticals, etc not included)

COMMONS-SOCIAL

Financial Speculation tax: 30% of value of public companies is from publicly created value: Regulation, Stock market, liquidity, etc.

Money Creation/Seigniorage: Fed ReserveQE3=$85B/mo = $1T/yearWhy not Basic Income? = $3164/person/yr)Isle of Guernsey-public money

Broadcast Spectrum: 98% given away free

Internet & web: US military-100% public funding

Land value: socially created

Public Trust Doctrine-VCAT

“As society moves forward, the list of assets that should belong to the people in common because the assets were inherited or created together, and therefore should be preserved in the common interest has expanded now logically to include natural assets such as undisturbed habitats, entire ecosystems, biological diversity, waste absorption capacity, nutrient cycling, flood control, pollination, raw materials, fresh water replenishment systems, soil formation systems, and the global atmosphere; and also to include social assets such as the Internet, our legal and political systems, universities, libraries, accounting procedures, science and technology, transportation infrastructure, the radio spectrum, and city parks. In enacting the regional greenhouse gas initiative (RGGI), the state of Vermont already has determined that the ability to discharge carbon into the atmosphere is an ability that belongs to people in common, and that needs to be managed in the common interest.”

Source categories emissions

(MMtCO2e)

2005 2030 (high)

2030 (low)

electricity consumption 0.64 4.12 0.97

residential, commercial, industrial fuel use 2.71 2.72 2.72 transportation 4.02 3.64 3.64 fossil fuel industry 0.02 0.03 0.03 industrial processes 0.44 1.24 1.24 waste management 0.29 0.23 0.23 agriculture 0.96 0.9 0.9 emissions total 9.08 12.88 9.73 Minus electricity 8.44 Statewide data from Vermont Governors Commission on Climate Change, available at:

http://www.uvm.edu/~vtcc/?Page=governor.html

Total Co2 Emissions in Vermont-Jennifer Kenyan and Beth Nolan

Sept 2008 Auction: $3.07/tonne x 8.44 = $25.9 millionHigh Estimate: $300/ton x 8.44 = $2724 million ($3gas)(>$4 gas tax: Austria, Belgium, Czech, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Portugal, Spain, Sweden, UK)

Fish and Wildlife Rent-Ross SaxtonTotal Revenue FY06

$7,880,00054%

$6,822,88446%

Tax

Economic RentTotal: $14,702,884

Figure 1a.

Low = $10.4 MillionHigh = $25.1

Forests-Mark Kolonoski

Public-State Forests

$3.2 millionState Parks

$6.58 millionFish and Wildlife

$180,486 (logging)Current Use Program

$17 millionTOTAL $27 million

Private-Forest-based manufacturing

$207.4 millionRecreation/tourism

$485 millionForestry and logging

$32 millionPaper and Pulp

$50 millionTOTAL $774 million

Revenue Generating Suggestions

• Leave public lands alone• Current Use withdrawal penalty• Depletion of Ecosystem Services (DES) tax• Impose auction and insurance bond regulation• Vermont Public Land Bank

• Low=10% of $32M from logging = $3.2M High = $32M

Groundwater Economic Rent-Colin McClung

Bottler Gallons/yearPristine Springs of Vermont

32,813,425/yr

Vermont Natural Water 970,000/yr

Clear Source Springs-Bottling

4,233,905

TOTAL88% profit

34,017,330=104.3 ACRE/FEET

REVENUE@$1.3M/ACRE-FOOT

$135.7 Million x 70% = $107.9 Million

High: $121.4M

Low

Current Private Revenue: • Public Supply: $ 35,000,000• Wastewater Permits: $ 1,692,350• Hydroelectric (dams): $ 164,775,527 • Thermoelectric (nuke): $ 316,000,000 • Recreation: $ 109,096,309 • Total: $ 626,564,186

Surface Water-Elliot Wilkinson-Ray

Surface Water-Elliot Wilkinson-Ray

(small discharge fee)

Rent

• Hydro:10% of revenue ($164,775,527) $16,477,553• End Local hydro subsidy: $ 6,000,000• Vermont Yankee 5c/1000gals: $ 7,600,000 • Public Consumption 5% (over 40,000): $ 639,000• Other uses: $.05/1,000 gallon • (24 million gallons/day) = $ 438,000• Total surface water rent: $ 31.2 Million(Low and High)

Vermont Mining Revenue 2005-Ian Raphael

Production/Extraction Value $96,800,000

Direct Mining Earnings 63,000,000

Listed Property Value 132,228,257

Property Taxes ( includes state tax of 1% and, average municipal tax of 1.79%) 3,678,990

Low = 10% severance tax =$9.68High = $16 million

Public Revenue from Wind Farms-Susan Salka

Assume 6.6 cents per kwh* selling price** x 689,850,000kwh/yr= $45,530,100 - $38,631,600 = $6,898,500.00

Assume 10.6 cents per kwh* selling price** x 689,850,000kwh/yr= $73,124,100 - $38,631,600 = $34,492,500

Assume 30.6 cents per kwh* selling price** x 689,850,000kwh/yr = $211,094,100 - $38,631,600 = $172,462,500

Land Rent in Vermont-Conor CaseyCurrent State Property Taxes are set at ~1.05%, with municipalities adding additional rates.

Current Revenue• Current Use Penalties

– $489,540• Speculative Gains Penalties

– $5,646,165.77• Property Transfer Tax

– $38,315,508.89• State Property Tax

– $696,371,326• Total Revenue

– $740,822,540

Current State Revenue from Land Taxes

State Property Tax

94%

Speculative Gains

1%

Property Transfer

5%

Current Use

Land Rent

Low=A state land tax of 5% would capture most if not all of this rent, collecting $1.07 billion- $740 = $329.8High = 10% = $2143M

(Altoona, PA 36% land tax)

Internet as a Common Asset-Ida Kubiszewski

Rent PotentialSource Revenue Rent > 7% of

profitPublic telecoms

$18.5 M profit $17 Million

ISPs $38.7M$6M profit

$3.3 M

Domain names

$130 M$18.4 profit

$9.3M

TOTAL ~$30 MILLION

Spectrum in Vermont-William Murray

“They Used to Rob Stagecoaches, Now they Rob Spectrum.”John McCain

Per Capita Value of Spectrum : $1002.12In Vermont (x629,908) : $625.23 million/yr*40% normal profit = $250 million/yrEconomic rent = $375 Million/yr (Low and High)

Financial Speculation-Liquidity trust 30% Barnes

Current Trading Projected Tax Rate Revenue(Annual Rates) Volume AfterTax Volume (both sides) Stocks $11 trillion $7.3 trillion 0.5% $36.5 billionGovernment Bonds $41.6 trillion $27.7 trillion 0.1% $27.7 billionCorporate Bonds $22.1 trillion $14.7 trillion 0.1% $14.7 billionFutures Contracts $100 trillion $66.7 trillion 0.02% $13.3 billionCurrency $200 trillion $133.3 trillion 0.1% $33.3 billion

(worldwide) (U.S. share = 25%)Swaps $22 trillion $14.7 trillion 0.02% $2.9 billionOptions Not available NA 0.01% NA

Total US Revenue (.25% RATE) $128.4 billion)x .21%

Vermont Revenue $269M Low (2000 Baker)$743M High (2009 Baker)

Dean Baker

Monetary System-2004

WHO CREATES MONEY? (SEIGNORAGE)

GOVT(CURRENCY)

$600 BILLION 7%

BANKS (LOANS w/int)

$8 TRILLION 93%

TOTAL $8.6 TRILLION 100%

Monetary System

VT BANKS (LOANS-2004)

$3,574,450,000

1% RATE $35,744,500

Until we have 100% reserve requirements and public Money