Infrastructure Mechanism Channels Wealth from Poor to the Rich
[COLOR="black"][B]Land Value Taxation Can Fund Rail Infrastructure[/B]
Land Value Tax works brilliantly to fund rail infrastructure. It stops speculators walking off with windfalls. Speculators are the scourge of the capitalist system. They are generally non-productive. The values that soak into the ground because of public infrastructure can be used to build and maintain the infrastructure. That is not happening.
[B]Rail Networks, like Metros, Create Economic Growth[/B]
Many have no idea what influence rail networks have on a community - they are a part of the economic growth of a community and sometimes the key aspect, as in rapid-rail in cities. Full metros create economic growth all around - Merseyrail can easily become a full metro network.
[B]Real Gains From Railways is in Land Values[/B]
Look at at British rail magnet George Hudson in the early to mid 1800s. He made his money from the increased value of the land the railways created, not charging for tickets. He knew where the money was made with railways - it was was not in running them.
Hudson had his own construction company and bought up land in prime spots where his railways went. He knew before others where his railways would go and where the stations would be. He creamed it off in increased land values and charging high rents, and allowed the railways to fall into disrepair as ticket prices were just enough to maintain the network in the long run, with the government having to take it over it was so neglected. Private profit and the debts socialised with us picking up the tabs.
Some people misguidedly say we should privatise railways - so they can cream it off again, and yet again the taxpayer picks up the debts in the end. And they then blame public ownership as being useless and inefficient.
Politician, Morrison at the same time as Hudson wanted the French system of public ownership and renting the lines, or time on the lines, and use the rents to maintain the infrastructure. He was overridden by a lobby by Hudson. The railways eventually declined to the point of being ramshackle all over the country. We are going to make all the same mistakes again.
Rapid-transit rail stations increase property prices around, and attracts investors. The Jubilee Line extension cost 3.4 billion to the taxpayer. The land values around the lines increased by 14 billion. All this value is untaxed. The cost of infrastructure can be got from Land Value Tax, which US cities are using, as is Hong Kong, Singapore, etc, to fund transport infrastructure. The most dynamic economies in the world use Land Value Tax. Ironically the British partially introduced it to Hong Kong.
[B]The Current Tax System is Destructive - Encourages Free Riders[/B]
The difference between a highway robber and a free-rider is that the free rider does not have to draw a gun to to take what belongs to others.
Railways create economic growth. [U]This crystallizes into land values[/U]. If this was recycled back into funding the nations rail infrastructure everyone would share in the net gains. But it is not. The current laws dictates that this surplus income from land values is delivered as windfall gains to the landowners.
[B]Thus the transport sector is transformed into into a sophisticated mechanism for redistribution income away from low-income taxpayers who fund infrastructure to asset rich people.[/B]
This is how the trick is perform in relation to railways:
[list=1][*]Government tax on people's wages, their effort - and sales, what they buy[*]Subsidies given to railways using community taxes[*]Strategically located land rise in value because of the railway[*]Windfall gains pocketed by landowners[*]Shortfall in funds to renew rail infrastructure[*]Government raises rates of Taxes on Wages and Sales.
Go to No. 1 above and the cycle starts all over again.[/list]
[B]The Enterprise Economy Implodes[/B]
This viscous spiral implodes the enterprise economy.
Because of income tax, taxing a person's efforts, some people are priced out of work. So the government increases taxes to compensate the losers, which creates even more losers
The ripples spread destruction deeper into our communities. The windfall gains to landowners from new rail or road elevates house prices beyond the reach of some people. This prevents low income "key workers" from moving into communities where they are needed to administer schools, hospitals, fire and law order.
So a transport system that supposed to enhance mobility achieves the opposite effect. It becomes an instrument for discrimination against those on the lowest incomes. Immobility is frozen into the structure of the community.
[B]Free Riders Pillage And We Do Not Recognise It[/B]
Few people notice. Instead, the pursuit of the "unearned increment" from land becomes a national obsession. What fuels this obsession? Housing. The president of the Campaign for the Protection of Rural England said:
[I]"housing offers a better chance of turning a tax free profit than any other form of (taxed) personal investment"[/I].
Our culture is supposed to be one of enterprise, however it is driven by a parasitism that undermines freedom. We institutionalise as "normal" the processes that create and segregate the rich from the rest who are materially, culturally and psychology impoverished.
Because this chain of events is now regarded as normal, it is invisible. We are not conscious of its influence, which is morally and materially corrosive. We celebrate the most sophisticated form of pillage because we do not recognise it as such. The free riders are free to rip-off the majority off without retribution. Most who do, do not realise what they are doing.[/COLOR]