My Left Testicle

could this be my future left nut?

I watched a documentary called drowned out on friday night. It was about a massive dam project in india started in the 1960's that presented some subsistence agrarian villages with the choice of relocating (to land they felt they were incapable of living off), taking a cash payment (that was small enough to not even cover the cost of relocating to the slums) or staying in the valley and drowning when the monsoons submerged their ancestral homes.
Naturally they chose to drown. Now the evening was sponsored by way of Prosper Australia & earthsharing which has the link over to the left of me. Over the past 6 months when I can I've been doing some reading on the whole thing and whilst sitting through my economics lectures wondered why nobody's done the simple price v quantity supply demand curve model on land, as far as I know nobody still hasn't (?).
But this is the thing, as foreign as the concept of removing all income and consumption taxes in favour of resource rentals goes when I try and 'find the holes to fuck it' I just cannot, I cannot fuck the theory.
So here are some examples:
You got a subsistence community living in a valley with no claims to their land. They consume only what they produce and don't engage in trade (due to there being no surplus) presumably someone owns the land and I am presuming it is the government since no bit of land on earth currently doesn't have a private owner. 500 km away you got a drought stricken area of an even greater amount of subsistence farmers. Under utilitarianism ethos the displacement of 10,000 people to divert water to 1.4 million or some such number. The government offers the displaced population the aforementioned deal (although they don't offer drowning as an option) So the question is how does taxing people land tax help out subsistence communities? It works every which way - first and foremost the big problem with the damn is that it won't work, the water will never make it to the drought stricken area but will travel through the canal system to benifit an industrial region, namely already wealthy chemical companies etc as per the world banks assesment. So at the moment all income tax of all indians is financing the damn and an industrial sectors land values have appreciated greatly because of it. If there was land tax the infrastructure improvements would mean that the benificiaries of the mega damn would actually have to pay for it by way of the land value and as such land tax appreciating. The lack of land for the subsistence farmers would dissappear because unused land would be left vacant for relocation, in india even the slums are owned by someone who generally benevolently allow millions to live there, if they were paying land tax on it it would force them to develope these areas creating more employment and creating habitable places. Furthermore in the drought stricken area the government would have to build 'mini dams' which collect monsoon waters between plots and have proved much more effective at relieving the drought as opposed to mega dams the first of which provides water to only 5% of it's intended area at huge taxpayer cost. One criticism was that a land tax would be unsupportable by subsistence communities, destroying them and devaluing them.
But even if you sit down and model it you have land with no infrastructure, no electricity, no pipes, no fucking nothing, so land tax would be low as compared to melbourne CBD. The communities would not actually have to rent the land but a) they would have the option of doing so, and b) if not what else is the land going to be used for, if I were to rent it my most logical work force to produce the little surplus necessary to pay the land tax would be the existing community. Let's face it I'd have a hard time luring professionals out to work in my ultra minimalist work place.

Another fucking example Australia, Australian housing is overvalued by 22% making it unattractive for foreign investment as it is currently an asset bubble. This problem is compounded by our ageing population. They are getting huge superannuation payouts and looking for an income generating asset that is simple enough for them to understand, bricks and morter. Now if you read LVRG's report bricks and mortar is a bad investment because the actual bricks and mortar are deteriorating all the time and cost of housing materials has held pretty much steady all the time. Furthermore land is overvalued because of urban sprawl, whilst people subscribe to the lex luthor maxim of 'they can never make more land' there is no limit to how many Fountain Gate communities they can make on the outskirts of melbourne. It is also a renters market due to the shear volume of investment properties out there there are more places for people to rent than there are tennants to rent them. But as my mum explained you don't make money on rent it's the capital gain. Infact it is all too common for people to make a loss on rent even when they are fortunate enough to have tennants because they can claim a tax deduction on any loss should rent not cover the interest on their loan.
This is called negative gearing.
So look at the situation, we are about to have a large proportion of Australians retiring, they wont be producing any economic surplus. The surplus of their lives have been used to buy up all the land, this has been amplified by negative gearing making the market more overpriced because you don't actually have to make an income form an investment property. I also see news report after newsreport on how underfunded the public health care system is, how underfunded the education system is, how public transport is running at a loss, how bad Australian infrastructure is etc. The most likely place for my income tax to go really is in a deduction for a multiple property owner. So my income tax goes to the ATO then someone rich enough to have an asset like an investment property can claim back their taxes and then rent me a room in their property to pay off the mortgage.
If there is say a 10% annual tax on the NPV of any property in Australia you would think the answer is simple simply increase the rent by that much. And possibly I could afford it because you get rid of income tax at the same time. So then two things happen all the houses that don't have tennants can't have the land tax covered by non existent rent, if they want to keep the property as an investment then they have to reenter the workforce and earn an income to cover their taxes or put the property on the market. Which will happen in a lot of cases because all of a sudden 'You make money from the capital gain not the rent' doesn't work anymore because ten percent of the value of the house if it is appreciating you actually have to cover each and every year. Every decade you have paid for the house again.
So land values drop because I who was once a renter can now buy a whole bunch of houses on the market if I like but faced with the same problem am only going to buy as many as my income can cover. Which will probably be one. Unless I also want to buy a property to start a business and start employing people. Then all of a sudden the pensioners with no income but land tax are screwed? but there not the depreciation of land values means the land tax they pay also reduces. Presumably to the point where they can draw a pension (based on minimum survival income) which both covers their land tax and there food, clothing etc. But that wasn't the retirement I planned I want to be rich and travel. So you fucking baby boomers have finincial planners now what are they going to do hand you a gun to shoot yourself. No they'll tell you to invest in the sharemarket and instead of living off the rent and income of the young generation actually bankroll them to start businesses and turn a profit. There isn't a single company in the world that won't grow if they got a massive influx of finances to invest in capital, research and development etc. Moron's running companies will go bust but that's why you have fund managers to dodge this shit. Furthermore instead of making money off capital gains you are making it off income, profits, dividends, the work of the younger generation that wants to work. You recieve dividends for investing in them rather than charging them to be alive which will cover the cost of rising land taxes as the government desperately improves and repairs infrastructure in order to increase revenues.

In development most issues regarding poverty revolve around land, My friend said in her honours thesis (or maybe just talking about it) in Vanuatu people where occupying land that was unused but owned by other people and the government would not redistribute because they simply thought the squatters would just 'go away' ie do nothing and hope they go away. A lot of subsistence and drought stricken development regions could do with resource rentals and land tax rather than the current set up which is lock down the wealth poverty gap.

There is not a single case study in history that disproves this resource rental tax. There are quite a few that do prove it. I have come up with many more scenarios than these two and not a single one of them is better off under a different taxation method. Even a world where land is in infinite supply. So here's the deal, I am willing to bet my left nut you can't fuck this theory. At the very least you shouldn't because it obviously represents the greatest gain to me and my generation.