Bailing Out the Auto Industry

Cars, the most hopelessly inefficient form of transportation ever invented, have done wonderful things for us.

Car ownership has enabled people to live in the outer suburbs, far from their jobs, stores, schools, and places of social life. This makes outer suburban land more potentially useful and therefore more expensive, thus feeding the forces of land speculation.

As a byproduct, this car dependence has required large parking lots in inner cities, thus requiring stores, industries, schools, etc. to acquire more land for these parking lots. This feeds the forces of speculation in inner city land.

So now that we've become so totally dependent on cars for all our transportation needs, our dependence appears to justify propping up the car industry when they begin falling victim to the very same land speculation that they, themselves, encouraged.

Perhaps we might change our perspective a bit. Maybe we could go ahead and let the car companies fail. Then many people will become unemployed and many dwellers of outer suburbia will be stranded in their remote luxury mansions without cars.

That would be horrible! But look! There's an obvious solution! Modify our tax structure to increase the location component of property taxes and decrease taxes on buildings, incomes, sales, and everything else.

This would cause land usage patterns to become more dynamic, enabling people to move closer to their work, stores, schools, etc. so that walking and bicycling would become practical for more of their transportation, thus decreasing their need for cars. The more dynamic land usage patterns would also permit the establishment of business forms that are more relevant to people's actual needs, thus re-employing the workers displaced by the failure of the car companies.

This tax shift, described in the nineteenth-century book Progress and Poverty by Henry George, looks like it would be very easily implementable within almost any reasonable governmental form. When I receive my property tax bill every September, the location value and building value are already separated out and re-added back together again, so implementing the tax shift looks like it would involve leaving a step out rather than adding a step. And if the income tax could be eliminated, yet another burdensome administration could be eliminated.

Hey, don't tell me it can't be done!