From Selected Articles on Single Tax
compiled by Edna D. Bullock, 1914
General Statement
Henry George is often spoken of as being the originator and founder of the Single Tax doctrine. Such is not the case. The plan of raising all revenues for public purposes by a tax assessed against some single kind of property or based on some single criterion of wealth or ability is not a new one. There have been economists and tax reformers in the last two hundred years who have proposed single taxes on expenditure, houses, incomes, capital, and land.
The theory of the Single Tax on land values such as proposed by Henry George was promulgated a great many years before Mr. George presented it. Adam Smith in his Wealth of Nations recognized the fundamental basis of the land value tax, namely, that land values are created by society and not by the individuals owning the land. But the doctrine was first fully conceived and formulated by a French school called the Physiocrats. Henry George himself recognized this and dedicated his book, Protection and Free Trade, “To the memory of those illustrious Frenchmen of a century ago, Quesnay, Turgot, Mirabeau, Condorcet, Dupont, and their fellows, who in the night of despotism foresaw the glories of the coming day.”
The theory of the Physiocrats may be briefly set forth as follows: Land is the only source of new wealth and therefore the cultivation of the soil is the only really productive industry. Agriculture yields, in addition to the returns on labor and capital, a net product which is called rent. Since no new wealth can come from any other source all taxes must of necessity come out of rent. H placed on other things, they would be simply shifted to the owner of the land. All revenues should therefore be raised by a single tax on the rent of land.
Later, John Stuart Mill did much to develop the single tax on land theory. Mill laid great stress on the fact that there is an enormous unearned increment in the increase in land values due to the growth of population, formation of cities and other influences outside the individual. About 1870 Mill was president of a Land-Tenure Reform Association in England. The following is an extract from their program.
“IV. To claim for the benefit of the State, the Interception by Taxation of the Future Unearned Increase of the rent of land, (so far as the same can be ascertained), or a great part of that increase, which is continually taking place without any effort or outlay by the proprietors, merely through the growth of population and wealth; reserving to owners the option of relinquishing their property to the State, at the market value which it may have acquired at the time when this principle may be adopted by the Legislature.” This differs from Mr. George’s plan only in that it applies to future and not to all unearned increment past and future.
To Henry George belongs the credit of fully working out the Single Tax philosophy in its economic and social aspects and of stating the theory in a popular and effective form. His greatest work, Progress and Poverty, was finished in 1879. It has been translated into several foreign languages and has aroused much interest and comment in all the civilized nations. The essence of the Single Tax doctrine is well stated in the following extract from Henry George: “All men are equally entitled to the use and enjoyment of what God has created and of what is gained by the general growth and improvement of the community of which they are a part. Therefore, no one should be permitted to hold natural opportunities without a fair return to all for any special privilege thus accorded to him, and that value which the growth and improvement of the community attach to land should be taken for the use of the community.”
In practical application the full Henry George Single Tax has never been tried, but an approximation of it is in force in several parts of the world, and it may be said that the general tendency of tax reform in all countries is toward the higher taxation of land values. The Australasian tax system includes a modified Single Tax. It is in operation in New Zealand and many parts of Australia. It permits any county to exempt from taxation all improvements and capital invested in productive industry. In 1892 New South Wales adopted a land tax and in 1901 Queensland exempted nearly all improvements from taxation. Vancouver, Victoria, Edmonton and other urban and rural municipalities of Western and Northwestern Canada have land value taxes, from which they raise the bulk of their revenues for local purposes. In Manitoba all improvements in or on land are exempt and taxes are levied upon “prairie values” alone.
At the November election in 1912 the people of Oregon rejected the Single Tax at the polls. In Washington several attempts have been made to secure the adoption of a tax on land values as a part of the system of local taxation. Everett adopted such a tax two or three years ago and a few months afterward repealed the law upon the adoption of a new charter. Last election in November, 1912, it was again adopted. The Everett charter provides for an exemption of twenty-five per cent of the personal property and improvements of the city in the year 1913, fifty per cent in 1914, seventy-five per cent in 1915 and then total exemption of improvements, placing the entire tax on land rental.
There have been two distinct lines of argument which have been put forth in support of the Single Tax. Isaac Sherman and his followers favored the Single Tax because they thought that the tax would be shifted to the consumers and would thus be diffused and every person would bear some share of the taxes. Henry George and his followers advocated the tax for a reason fundamentally opposed to this, namely, that the tax would stay where it was put and could not be shifted. Economists are agreed that the latter view is correct and that whatever the other objections to the tax the contention that it can be shifted to any considerable extent is untenable.
Two classes of persons have opposed the adoption of the Single Tax‚—conservatives who fear the results of the appropriation by society of rent, and socialists and other radicals who regard the Single Tax as a half-hearted measure which will not remedy the fundamental defects of the social and industrial organization.
The conservatives are undoubtedly right when they say that the full application of the Single Tax amounts to the socialization of land, the abolition of private property in land as we now have it, the government becoming the universal landlord and the selling value of land tending to approach nothing. The very theory upon which Single Tax is founded, namely, that land values are God given or socially created, is inconsistent with the institution of private property in land, the essential element of which is the private right to the income from these natural or social values. There would still remain under the full Single Tax the right of possession and of alienation, the right to use the land for productive purposes with full control and ownership of the results of labor expended on the land and improvements made, but the bare land itself would pay back to society in the form of taxes the full value which the presence of society gave to that land. There would be community but not common ownership of land.
From the standpoint of the socialist doctrine, the socialists are correct in their contention that the socialization of land would not greatly modify what, to them, is the fundamental defect in our industrial organization‚—the capitalistic system of production. Free land does not mean equality of opportunity because those with capital to improve land would have a great advantage over those without capital. The poor man has no capital and would be unable to improve the land. The land therefore would be held and improved as at present by the capitalist class and the poor man would continue to compete for the opportunity to sell his labor. Some socialists are opposed to the Single Tax because they feel that it would rivet the chains of the workingman. Others believe in it as a step toward the socialization of all of the instruments of production.
It is evident from what has been said that the full Single Tax is by no means merely a tax. It is a plan of reorganization of society with a primary view of securing a more equal distribution of wealth and incidentally raising revenues for the government.
Properly speaking, the term “Single Tax” as applied to the systems of taxation advocated by present day Single Taxers is a misnomer. The system which is usually proposed is not a “single,” but includes other taxes, such as franchise taxes and taxes on all monopoly profits, in addition to the land value tax; some of the Single Taxers would retain repressive taxes, such as the liquor license; others would include the inheritance tax as a part of their program. Also, the tax is usually proposed as a local tax and not as a state or national tax, but most of the adherents of Single Tax look upon the adoption of the Single Tax for local purposes as merely a step toward its application in the larger units of government.
The advocates of the Single Tax are also to be discriminated between those who hold the pure Henry George doctrine of appropriation of the full rental value of land, which has come to be known as the Single Tax unlimited, and those who hold that only the necessary per cent of rental value should be taken to meet the actual expense of government, the view propagated especially by Thomas G. Shearman and C. B. Fillebrown and known as the Single Tax limited.
To the Single Taxers are ascribed large activities with movements for local option or home rule in taxation, tax reform measures, and movements for the separate assessment of land and improvements, as being steps in the direction of the pure ideals they have in view as an ultimate goal.
Introduction
Taxation problems are, at best, rather intricate for the majority of citizens. The consideration of these problems has so long been left to the discussion of the doctors and the schools that the scholars have come to look upon the crude reasoning of the common mind as an intrusion upon their own special field. This seems to be the present attitude of economic scholarship towards the popular mind as expressed in Single Tax propaganda.
Granting that the popular thought on taxation has too often been directed to evasion of taxes, it would still be evidence of unreasonable scepticism as to the intrinsic rightness of human nature, if one could not conclude that no just basis for the distribution of the burden of taxation has yet been found, and that the scholars have failed to adapt their erudition to the problems of the “man in the street.”
It is very recently, indeed, that political economists have thought it within the proprieties to devote much attention to Single Tax discussions. This explains why so much of the available printed matter on Single Tax has been written by Single Tax propagandists, and so little of the meager literature of opposition by the economists.
Meantime, the question of the adoption of the Single Tax theory as a working basis of taxation has compelled the attention of the average citizen in his capacity of voter in various parts of our own and other countries.
The present status of the taxation problem, therefore, is distinctly controversial. In considering the subject it is but right to examine carefully the literature of propaganda, for it is that literature that is in the hands of one’s neighbor who is about to vote on the adoption of the single tax. It may be sadly biased by the enthusiasm of the advocate or the antagonism of the objector‚—but it is being read. Therefore the compiler has thought it fair to reprint some of this literature.
From a cursory, but comprehensive view of the subject, I suggest to the student or the citizen who is confronted with the necessity of coming to a decision concerning the adoption of a Single Tax program, a careful outlining of present forms of taxation and their underlying principles. Such a study would develop certain axiomatic statements that would clarify the thinking of most of us.
It would be established:—
- That some form of taxation is as necessary as it is unavoidable everywhere in the civilized world, except on Crusoe’s island. It is not unusual to find unthinking citizens who regard taxes as an especially objectionable form of human oppression, designed by the powerful, and collected chiefly from those least able to pay.
- That the promotion of the general welfare is, or should be, the sole object of taxation. At the vanishing point of the general welfare, and the consequent ascendancy of the private welfare of favored individuals, therefore, comes the test of the soundness of any tax.
- That the best scheme of taxation is that which falls upon the individuals composing society according to the ability of each to pay, and to participate in the benefits of community expenditures for governmental purposes.
It is by such criteria as these that the general property tax, income tax, inheritance tax, poll tax, internal revenue and all excise taxes, tariffs, franchise taxes, occupational taxes, and the proposed Single Tax should be tested. And much wisdom is required of those who apply the tests skilfully, and with fidelity to the public welfare.
Edna D. Bullock. September, 1914.