Earthsharing Canada is an economics think-tank advocating government financing by collecting "economic rent" rather than with taxes on jobs, business and sales.
Economic rent refers to revenue without a corresponding cost of production, the societal surplus that flows to monopoly held assets like land, resources (oil, trees, water), the privilege to pollute, billboards, the stock market, the electromagnetic (EM) spectrum, agricultural quotas, taxi medallions, etc.
Though this wealth rightfully belongs to the community, it mostly flows untaxed to private asset owners, forcing governments to damage the economy by taxing incomes and sales.
This economic theory is supported by classical economists Adam Smith, David Ricardo, John Stuart Mill, Henry George, prominent people like Winston Churchill, Dr. Sun Yet-Sen, Mark Twain, and modern economists Joseph Stieglitz, Milton Friedman, Michael Hudson, Herman Daly, and George Monbiot.
Earthsharing Canada is dedicated to promoting the economics popularized by the 19th century American economist Henry George, as articulated by the international Georgist movement calling on governments to collect economic rent (income without a corresponding cost of production) in lieu of taxes on income or consumption.
In his seminal book Progress and Poverty (1879), George builds on the work of Adam Smith, David Ricardo and John Stuart Mill, enumerating the multiple benefits to the economy and society when governments are financed by collecting economic rent.
Economic rent refers to the societal surplus that flows to assets like land, resources like oil, trees, water, the right to pollute, billboards, the stock market, the electromagnetic (EM) spectrum, agricultural quotas, taxi medallions, etc.
Although this wealth rightfully belongs to the community, it presently flows to private asset owners, forcing governments to damage the economy by taxing incomes and consumption.
Earthsharing Canada argues that taxing incomes makes people more expensive to hire, that taxing capital increases the cost of borrowing, that taxing profits pushes viable enterprises closer to bankruptcy, and that taxing consumption raises prices. Economists refer to these taxes as "dead weight" that stifle economic vitality and cause unemployment and poverty.
Alternately, funding government programs by capturing the community-generated, "unearned income" that accrues to desirable finite assets increases economic efficiency, reduces and eventually eliminats poverty, and reduces unemployment, halts sprawl, conserves resources and reduces pollution.
Economic rent capture has many profound and beneficial implications. Collecting unearned income rather then earned income eliminates antipathy toward paying taxes, since people keep all of the hard-earned cash earned from jobs and businesses.
Collecting economic rent from the relatively few sources is far less bureaucratic then administering the taxation of hundreds of millions of jobs, businesses and billions of purchases.
Infrastructure becomes self-financing, since collecting the rise in land value from construction projects is used to finance the project.
Economic rent capture eliminates real estate speculation, which is the root cause of recessions and depressions, including the present crash.
Taxing pollution and stimulating the productive economy biases toward labour-intensive local production raises wages and spawns new businesses. Right-pricing land stops sprawl and fosters walkable communities linked by transit.
Economic rent capture has been practiced extensively in the past and is clearly beneficial in jurisdictions where it is used today. Alberta and Winnipeg used it in the early 20th century, Japan, Hong Kong and Taiwan are more recent examples, and it is how Sydney paid for their Olympics. Alaska, Alberta and many other countries use it when collecting oil royalties.
With communism, socialism and Marxism now abandoned in favour of free markets, with interventionist Keynesianism discredited as doing more harm than good, and with trickle-down economics mocked as a cynical justification for unconscionable wealth disparity, governments should now return to what Fred Foldvary calls "Foundational Economics", quash the damaging speculative economy and allow a purely entrepreneurial economy to flourish.