Today, I studied Henry George “Progress and Poverty”
Nowadays, Henry George take center stage because of tax reduction!!
We called People who have been studying about Henry George Georgists.
Georgist insist comprehensive real estate holding tax must need.
What is the Comprehensive real estate holding tax? following sentence, abbreviation is CREHT.
Let’s study Henry George!!
1. Monopoly game
Monopoly game is very popular board game.
Monopoly game was created by Elizabeth Philips in 1903.
The principle of this game is to earn money from the opposing team.
How to earn money from other team is to buy land and to build a building in the land.
If other team come to your land, they have to give you money.
The reason why Elizabeth Philips created this game was that want to tell people negative effect of monopoly.
At that time, England land host was immorality and paid few land tax.
So, Elizabeth Philips criticized this problems.
But these days, many people misunderstand this game.
They understand that people who possessed many lands is the best way to be rich.
That is distorted truth.
As a result, women who speculates in real estate in Korea, strong country of real estate, recommend this game to their children.
2. Self-employed person is dying in Korea.
These days, many franchise cafe, Starbucks and Coffee Bean, Pasccuci and etc. is popular.
So, many Korea retiree found cafe similar with franchise cafe.
But, their income is worst.
Because if their revenue was one thousand dollar in a month, their expense fee was 6 hundred dollar in a month.
Therefore, their net income was just 4 hundred dollar.
4 hundred dollar is very not enough to live life.
More shocking thing is that most of expense fee is land fee.
3. Henry George “Progress and Poverty”
In early 19 century, Henry George’s book “Progress and Poverty” was second best seller.
At that time, this book was famous than Karl Marx’s Das Kapital.
Henry George was moralist.
Moral is weapon of conservatism because moral aim past.
Conservatism aim maintaining past system but progressivism aim developing and finding new-thing.
So, conservatism emphasize moral.
Henry George also aimed moral and was conservatism.
He insisted economy could not separate from moral and economy and moral was the one!!
He said monopoly and landholding was immoral and it was hurting economy.
It was conservative and progressive at that time because most of economists said economy separated from moral.
Henry George classified economy. Labor and Capital / Land
He insisted land was different from labor and capital.
For example, we suppose that there is a tree.
Who’s host of that tree?
The tree is no one’s own. that is the tree is land.
=> 
We suppose that someone cut the tree and make a chair again.
Who’s host of the chair?
The chair is making man’s own because the chair have a his labor.
=>
Other example, we suppose that someone cut the tree and make a loom.
Who’s host of the loom?
The loom is also making man’s own because of spending labor.
In above examples, chair represent labor and loom represent capital.
Henry George was influenced by Locke, England philosophist.
Locke said government have to allow people to have private property.
That mean was that I could own all thing spending my labor.
But land could not because land did not spent their labor.
Henry George was not socialism.
He did not like that laborer was conflict with capitalist.
He wanted to say their real enemy was land host.
So, He insisted land have to be fair.
4. Accomplish CREHT !!
Henry George defined special characteristics of land.
Land could expect constantly increasing of price because land have durability and permanent.
So, this could be ruined in a moment and ambition of speculation could cause economy depression.
Ground rent is unearned income.
Unearned income enable people to can decrease desire of labor.
As a result, many people do not work hard and decrease labor income.
This phenomenon was generated in USA and Japan.
So, it generated real estate bubble in USA and Japan.
In 1990, Japan bubble was collapsed and Japan economy have been depressing until now for 20 years.
USA bubble also was collapsed in 2008, as a result USA Lehman Bank became bankrupt.
So, many georgists can insist CREHT at this time through economy history.
5. Revival of CREHT
We can understand georgist’s oppinion.
We should have new sight about land tax.
We should not focus on income tax and corporate tax but focus on land tax.
Because income tax and corporate tax are compensation of labor but land tax is not.
Increasing income tax and corporate tax cause people to decrease desire of work.
We have to increase tax of unearned income.
Above graph is Korea total collection of land tax rate and price from 1998 to 2007.
It’s going too far?
Total rate of land tax was only 6%!!
Last government, Lee Jeong-woo, policy staff of the blue house, accomplished policy “Comprehensive Real Estate Holding Tax”, raising up land tax.
But many Kang-nam land rich objected this policy. rich was very powerful in capitalism.
As a result, this policy was abolished by their authority in 2005.
We have to rethink about it!!
The public have to know this reality and insist new tax income policy again.
100 years ago, Henry George already thought this problem and predicted.
We who live in this time maybe do not follow his knowledge ?
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