"We have no hesitation in declaring our belief that the ideal of taxation lies in the single land tax, laid exclusively on the rental value of land independent of improvements. It is the real estate tax pushed to its logical result . . ." --- New York Times
Gov. Hill has never failed in his regular messages to the Legislature to refer to the need of reform in our system of taxation, and he has uniformly shown that he has no grasp of the subject and no ability to make suggestions that are of the least value. Heretofore the substance of his recommendations has been that means should be devised for collecting from personal property its equitable share of the public tribute. This year, although he repeats in a vague way that some new system must be adopted “to impose upon personal property its equitable share of taxation,” he practically abandons the ground which he has hitherto held. He says that the present system “has been substantially a system of real property taxation only,” but in fact the law makes no discrimination between the two classes of property. It requires all personal property to be assessed at its true value, the same as real estate, and it escapes only because it is found impracticable to assess it with any degree of completeness. This can only be done under a rigid listing system, which our law does not require, and even where that has been adopted it is only partially successful. It results in more perjury than revenue. While Gov. Hill has seemed in previous messages to favor the listing system, he says now that the inquisitorial character of “an assessment based upon a sworn statement of the person assessed is odious to the American people, who are not accustomed to have Government officers prying into their private affairs.” Even our present assessment of personal property, so far as it goes, is based upon such sworn statements, and necessarily must be, and no personal tax can be collected without prying into private affairs, but that is the least of the objections to it. In almost the same breath the Governor declares that there “must be” a system for imposing its equitable share of taxation upon personal property—meaning, if he means anything definite, an equal share with other property—and opposes the only method by which the tax can be even imperfectly assessed and collected. His only specific suggestion is the highly inequitable one of pouncing upon the estates of decedents, because they can be fully appraised in the hands of administrators and trustees, leaving the property of the living to escape. Of course, the estates of decedents are really the property of living persons, which come to them by as fair a title as any other. Its chief attraction for purposes of taxation is that it can be easily got at. It is for the time being in a position where it cannot escape, but its owners are as likely as not poor and dependent upon their inheritance.
If the Governor had any clear ideas on the subject and any capacity for logical consistency, instead of making these muddled suggestions he would boldly recommend the abolition of personal taxation, which cannot be made equitable. He says, in his muddle-headed way, that it may be true “theoretically, as some assert, that the burden of a real property tax, by the working of natural laws, is finally distributed equitably upon all wealth, because all wealth is primarily derived from land,” but he thinks it must be conceded that the process is slow, and that “vast fortunes of personal property may change hands many times while a real property tax is claimed to be slowly working out a distribution of its burden upon the owners of personal property.” This is utter and hopeless nonsense. There is nothing theoretical or slow about the diffusion of real estate taxes. It is eminently practical and prompt. The taxes of the real estate owner are as “certain as death,” and he calculates upon them all the time. He fixes his rents with reference to them, and every tenant pays his equitable share. All traffic is carried on by the occupation of real estate, and prices are affected by the factor of rent and taxation. There is no escape from it for any person who occupies a building or a room in a building or who buys anything for the sale of which a building or a piece of ground is necessary. The equity of the operation lies in the fact that the tax is finally distributed in exact proportion to the use that is made of real estate by the different members of the community, and that varies as near as may be with wealth and the ability to pay.
We have no hesitation in declaring our belief that the ideal of taxation lies in the single land tax, laid exclusively on the rental value of land independent of improvements. It is the real estate tax pushed to its logical result, but it is so far unattainable as to be beyond the range of practical discussion for present purposes. But the abolition of direct personal property taxation is entirely practicable and a step in the direction of equity. As another step toward the solution of the problem, it would be well if the revenue for State purposes could be derived from other sources than the direct assessment of property in the hands of individual owners, so that the question of assessment might be left to local authorities. We could then get rid of the inequalities due to varying standards of assessment in different counties and the arbitrary action of so-called Boards of Equalization, and the way would be prepared for further progress.
© 2019 The New York Times Company
See The Standard, January 15, 1890, p. 3, signed by Henry George.