LVTFan's Blog

"Proputty" --- A Lecturette in Rhyme, by J. W. Bengough

John Wilson Bengough was a skilled artist and cartoonist, but he was also skilled with words.  This appeared in Single Tax Review, Winter 1906.

“PROPUTTY.”
(For the Review.)
A LECTURETTE IN RHYME.

I took up my Tennyson lately and read his dialect verse
Of the sturdy old “Northern Farmer,” whose soul was in his purse;
How he berated Sam, his son, who wanted to marry for “loove,”
And the folly of such a notion sought earnestly to prove.

“ ’Ear my ’erse’s legs,” says he, “as they canters and canters awaay,
Proputty, proputty, proputty—that’s wot I ’ears ’em saay!”
“Proputty, proputty, proputty”—that was the only thing
That to him was of real importance concerning a wedding ring.

Gentleness, truth and sweetness; a pretty figure and face,
These, and a passionate love, are all very well in their place;
But to be of any account in blushing, prospective brides,
“Proputty, proputty, proputty”—that must be there, besides!

Now, to many who read the poem this Northern Farmer seems
A sordid old grasping wretch, who only of riches dreams;
“Proputty, proputty, proputty.”—so runs his one refrain,
“Proputty, proputty, proputty”—hoarding, profit and gain.

Marjorie Kinnan Rawlings, Cross Creek

The final few pages of Marjorie Kinnan Rawlings' 1942 book Cross Creek, ring with the thought of Thomas Jefferson and Henry George:

I had a letter from a friend at this time, saying "I am a firm believer in property rights."

The statement disturbed me.  What is "property" and who are the legitimate owners?  I looked out from my veranda, across the acres of grove from which I had only recently been able to remove the mortgage.  The land was legally mine, and short of long tax delinquency, nothing and nobody could take it from me.  Yet if I did not take care of the land lovingly, did not nourish and cultivate it, it would revert to the jungle.  Was it mine to abuse or to neglect? I did not think so.

I thought of countless generations that had "owned" land.  Of what did that ownership consist? I thought of the great earth, whirling in space.  It was here ahead of men and could conceivably be here after them.  How should one man say that he "owned" any piece of parcel of it? If he worked with it, labored to bring it to fruition, it seemed to me that at most he held it in fief.  The individual man is transitory, but the pulse of life and of growth goes on after he is gone, buried under a wreath of magnolia leaves.  No man should have proprietary rights over land who does not use that land wisely and lovingly.  Steinbeck raised the same question in his Grapes of Wrath.  Men who had cultivated their land for generations were dispossessed because banks and industrialists believed they could make a greater profit by turning over the soil to mass, mechanized production.  But what will happen to that land when the industrialists themselves are gone?  The earth will survive bankers and any system of government, capitalistic, fascist or bolshevist.  The earth will even survive anarchy.

Meum, Tuum and Stealum

Another gem, also from the Leavenworth Labor News -- a little bit of filler at the bottom of a column:

Qualified Ownership

The moral law recognizes three kinds of ownership: what belongs to me, what belongs to you, and what I can legally steal from you.  "Meum," "Tuum" and "Stealum."

My high school Latin is long behind me, but I think the 3rd person plural would be Nostrum --- "ours," as in common property. 

(And http://www.nationalarchives.gov.uk/latin/stage-1-latin/resources/stage-1-latin-grammar-resource/pronouns/ didn't refresh my memory much.) 

 

The milk in our coconut

This is an editorial from the Leavenworth (KS) Labor News of February 10, 1893.  This newspaper is available on Newspapers.com, and it, along with the Fairhope (AL) Courier, is a wonderful resource.

The Galveston News has an editorial on the “Public Landlord” in which it attempts to show that the figures used by Mr. Thomas G. Shearman as to the total annual land values of the United States are incorrect, and then it proceeds to demolish the single tax idea. That’s the trouble with figure-mongers. What difference does it make whether Mr. Shearman’s figures are correct or not? The milk in our cocoanut lies in the statement that land does not possess in itself those qualities which enable it to be owned by an individual. It is not property, any more than the air, sunlight, or winds of heaven are property and subject to individual ownership.

Mr. Shearman is one of the most valued adherents to the single tax cause. We call him a “Single Taxer Limited.” He favors the single tax because of its simplicity as a fiscal measure.

We have all kinds of people in our camp; one highly valued Single Taxer is Billy Radcliff of Ohio, who goes around with a banjo singing our doctrine. Another is Rabbi Samuel Sale, of St. Louis, an orator whose words and figures of speech remind one of the lofty imagery of the prophet Isaiah. Then there is “Uncle Tom,” the poor workman, who writes with the eloquence, which, as Webster said, “was not taught in schools, but belongs to tho cause, the time and the occasion.”

Henry George, the philosopher; Judge Maguire and Louis F. Post, the lawyers; Dr. McGlynn, the religious teacher, and a countless number of professional men, artisans and common laborers make up our following, and run the entire gamut of human thought and endeavor.

If Thomas G. Shearman, the fiscal advocate of single tax, or Dr. McGlynn, the ethical advocate, or Louis F. Post, the legal advocate, or any other special pleader for our cause raises questions which, to men uninitiated in their special branches of learning seem to be untenable, what matters it?

The men who stand firmly upon the statement that individual ownership in land is the breeder of poverty, of sin and crime, and all the brood of evils which spring from an unjust and unrighteous act, care little whether the annual land values of the United States are seven hundred millions a year, or one million a year, or seven billions a year.

The point is that the annual value of land belongs to the creators of it, namely, to society in the aggregate—to the generation of men now living. The men who are dead have no part or lot in it; neither they nor their heirs who base their claims upon the fact that their ancestors claimed to own the land. When we die our interest in the land ceases and we do not believe that we can pass our title to our children as against the children of landless men who are living in the same generation with us.

If the annual land value be more or less than enough to support the state, what matters it? The value of land, be it great or small, belongs to all men who live on the land. That’s all there is to it.

If this contention can be sustained we need have no fears about other truths not being in harmony with our position. The first thing to do is to establish the truth that land cannot be owned by an individual — is not of a nature which permits it to be owned. After this is done, then the fiscal, ethical, legal, sentimental and utilitarian phases of the situation may be profitably considered and worked out. If our contention can be sustained, then there is a way to harmonize the details. This must be true, or else truth itself is a lie.

If you have time available, consider digging into those two newspapers.  They have a wealth of fascinating material and wisdom.

John Farrell, The Philosophy of the Single Tax, Part III: The New Doctrine

The Daily Telegraph (Sydney, NSW: 1883-1930)  Sat 2 Nov 1889  Page 5 

The Philosophy of the Single Tax
By J. FARRELL

No. III. THE NEW DOCTRINE.

It should be evident that the first essential to any philosophical inquiry into social conditions and the causes inducing them is an accurate definition of the meanings of all the terms to be employed in the course of it. The want of strict and arbitrary definitions of certain words whose use enters largely into any consideration of politico-economic questions has been prolific of confusion in the past, and has led astray many of the keenest minds that have engaged in such investigations. The names of certain elements or conditions of the problem to be dealt with have conveyed different meanings to different ears — sometimes different meanings to the same ears. It has happened over and over again that writers held in very high repute as authorities in this field of research have at the beginning of a chapter attached a signification to some such term as "wealth," "capital," or "wages" which is not maintained to the end. Under such circumstances it is not to be wondered at that political economy has been rather barren of reliable guidance. Nor is it surprising that its study has only been pursued in a half-hearted sort of way, and by comparatively few students, when the accepted teachers had so little to offer in the way of firm demonstration or of future promise of results beneficial to mankind. Henry George recognized that the work which lay immediately before him was to remove the indistinctness of terminology and vague application of words which had impeded the progress or vitiated the conclusions of those who preceded him, and his first care was to analyze the materials, so to speak, of which political economy is compounded. Before his time not one economist seems to have subjected all the parts of the science he strove to advance to a close examination, independent of the verdicts of others. I need not refer to instances where, in the light of the new knowledge we possess, this is made most evident. I cannot in the space of these articles deal, save in passing and where necessary for the sake of illustration, with the old economy, which in some important respects differed so widely from that taught in "Progress and Poverty," but will here proceed to state the new.

Land, in the mouths of those who advocate the single tax, means matter, as apart from the force which molds it into human usefulness. It includes not only the surface of the earth and the water, but all that is above or under that surface in the way of raw materials and natural opportunities. As has been well said "it includes the whole material universe outside of man himself." Labor means force as apart from matter. It is the power which changes and modifies matter into forms exactly fitted to minister to the needs of mankind. The meaning of the word must not be limited to physical toil, for any effort of the mind in the domain of literature, art or science which is directed towards increasing knowledge or enjoyment is truly labor, and he who in any way ministers to the satisfaction of human desires, even though he may never have soiled his hands, is truly a laborer. Wealth is the general name given to all things which are directly

Another Wise LTE, from 1932

A fellow named Hugo W. Noren, of Pittsburgh, wrote to the Philadelphia Inquirer, in January 1932:

To the Editor of The Inquirer:

A gentleman of your city who appears to give largely of his time to promote its welfare sends me an editorial quoting Mr. Franklin Spencer Edmonds to the effect that taxation must be stabilized and your own that taxes on real estate must be reduced.

Perhaps we shall never make any progress so long as we think of it as a tax problem.  The term "real estate," too, is confusing.  It includes land from which wealth is drawn and wealth drawn from the land.  There is no possibility of arriving at a solution if we treat land as wealth.  Land is not wealth.  It is the surface of the planet earth.  It is not produced.  No man can add an inch to it or reduce it an inch.  Wealth is produced and has no limit.  It is in our power to destroy it all or double it.

It seems necessary to grand land titles for security of possession.  But in granting such exclusive possession equity requires that an equivalent be rendered in return for the grant.  Unless such equivalent payment, called rent, is required, the possessor has an advantage over his fellows: he has a privilege.

Wherever land has a market price we know that public funds have gone astray.  Wherever public funds go astray public business must suffer.  It is no remedy to go out and punish business men, raising funds by levying penalties on production and exchange of wealth in lieu of failure to collect the public fund.

To stabilize taxes would be a guarantee to private parties a perpetual untaxed income from public funds.  Anyhow, one would hardly look for such proposal from Philadelphia, the birth place of Henry George.

To which I can only add that California's Proposition 13, which "stabilizes" the property tax, is exactly what Mr. Noren is referring to.   No wonder seniors remain in homes too large to clean, to maintain, to cool or heat, close to jobs from which they're retired and schools their children attended decades ago.  Every dollar by which their cost of living is subsidized comes out of others' pockets, in the form of higher taxes on their new neighbors, and the long commutes which younger people must endure to get from a rental they can afford or a mortgage for which they can qualify to the jobs which support themselves and their families!

Having One's Cake, and Eating it Too

A bit in the Philadelphia Inquirer of 1931-09-08 signed by Girard, describes an interesting point made by Harold Sudell:

"According to Harold Suddell, noted single-taxer, Herbert Spencer and I have made the same mistake.

I do not know if Herb would feel more foolish than I at this comparison.

Mr. Sudell insists that land is one thing which knocks cockeyed the old theory that you cannot eat your cake and have it.

While land grows in value it may also yield a good rate of interest on the investment.

In that way it beats plain, old fashioned compound interest.  But, as Mr. Sudell says, if he had his way -- the way of all single-taxers -- all that land would get would be what it earns, never that potential "unearned increment," about which Henry George grew so eloquent.  

Which policy, of course, would forever end any possible speculation in land.  What would Miami do then for a living?

And there is no such thing as a free lunch ... when it comes for free, it is coming from someone else's labor.

A Poem of Political Economy -- likely J. W. Bengough, from 1887

A Poem of Political Economy
from Grip, mid-1887
likely by J. W. Bengough

Capital, Land and Labor
    Were triplets at their birth,
And started out together
    To cultivate the earth;

Quoth they, “We’ll work together,
    And all the wealth we make
Will be divided fairly,
    And each a third will take.

“Capital’s share is Interest,
    Land’s share we’ll know as Rent,
While Labor’s we’ll call Wages.
    And each will be content.”

The business grew and prospered,
    And wealth was made galore,
But, lo! while Land waxed wealthy
    The other two grew poor.

And it was seen, most strangely,
    That with the rise of Rent,
Both Interest and Wages
    Lower and lower went!

“There’s something wrong, dear brother.”
    The others said to Land,
“There’s something crooked somewhere
    We’d like to understand.

“While you are fat and jolly,
    And from all care are free.
We, though we do our portion
    Are pressed by poverty.”

Said Land, “My dearest brothers,
    The facts are as you state—
While capital and wages fall
    Rent grows at inverse rate.

“And why? — the thing is simple,
    And very plain to see: —
For all your raw material
    You’ve got to come to me.

“And I (through ‘private ownership’)
    Am thus empowered to say,
As much as I see fit to ask
    You both have got to pay.

“We’re on a different footing,
    As you may now perceive,
You’ve got to have my help, you know,
    Or, simply, you can’t live.

“And since (through ‘private ownership’)
    I ask more than my share,
It follows that my partners
    Are left a little bare!”

“Most excellently reasoned,”
    Said Labor. “clear as day!”
“The very thing,” said Capital,
    “That I was going to say.”

“Well, now,” said Labor thoughtfully,
    “I think I see the chip
That spoils our dish of porridge—
    It’s ‘private ownership.’

“We’ll just dissolve this little firm
    And form again with two
Called Capital & Labor —
    Both workers — that will do.

“And Land (or raw material)
    Since it by Heaven is sent
We’ll treat as common property
    By wiping out all rent.

“Then while the wealth producing
    Will go on as before,
The workers will enjoy it,
    And neither will be poor.”

 

J. W. Bengough was a prolific illustrator and cartoonist, and he clearly had a way with words.  He published Grip for many years, and late did weekly cartoons for The Public.  See also his Up-To-Date Primer and Whole Hog.    He coined the phrase "Natural Public Revenue."     Look for "Grip" on Google Books; you won't be disappointed!

Tenants to Royalty

From The Public, June 8, 1917

Tenants to Royalty.

New York tenants should not be unmindful of the honor conferred upon them by King George, in making Baron Astor into a Viscount. A few years ago these New York tenants paid rent to a fellow citizen, a mere American, for the privilege of living on Manhattan Island. This is not to imply that Mr. Astor was lacking in any of the virtues, moral, intellectual, or spiritual, possessed by his tenants; but merely to note the fact that one American citizen was empowered by law to collect toll from other American citizens for the right to live in America. When Mr. Astor became a British citizen, his American tenants paid to a British subject for the privilege of living on American soil. Later, when Mr. Astor, because of lavish contributions of American dollars to British institutions and parties, was made Baron of Hever Castle, his New York tenants experienced the satisfaction of English tenants who live on lords’ estates. Now they have been raised to the exalted position of tenants of a Viscount. And the end is not yet. It is whispered in England that royalty must stop marrying into German royalty, and contract alliances with the commons. This opens up new possibilities. It is conceivable—the thought is put in this potential form to avoid an unwarranted raising of hopes—that with British princes contracting alliances with the commons, the children of Americans now living may pay rent to a British king for the privilege of living on American soil.

• • •

But does it so very much matter whether tenants on Manhattan Island pay toll to a baron, viscount, prince or king in some European country rather than to Diederich van Rensselaer or Abraham Margolies in this country? When one gives a day’s labor for a blanket or for a pair of shoes there is the consciousness that one has paid the maker of the blanket or the shoes. The service given for a house raises the same thought, payment to the builder of the house. But when one gives labor for the use of land, what is the justification? Is it because the owner made the land? Can it be that Mr. Astor has rendered his former countrymen a rare service in visualizing iniquities of landlordism?

James Maguire's speech in the House of Representatives: 1894-01-31 Direct Taxation of Land Values

Search this on "Santa Marguerita" and on Salinas River.

 

DIRECT TAXATION OF LAND VALUES,

Speech of HON. JAMES G. MAGUIRE, of California.
In the House of Representatives, Wednesday, January 31, 1894.

The House being in Committee of the Whole on the state of the Union, and having under consideration the bill (H. R. 4864) to reduce taxation, to provide revenue for the Government, and for other purposes, and the question being upon an amendment thereto offered by the gentleman from Tennessee (Mr. McMillan), providing for a tax on incomes, etc., the following proceedings were had:

MR. MAGUIRE. Mr. Chairman, I offer the amendment which I send to the desk. The amendment was read, as follows:

Amend the amendment by striking out sections 1 to 18 thereof, both inclusive, and inserting in lieu thereof the following:

"And be it further enacted, That a direct tax of $31,311,125 be, and is hereby, annually laid upon land values in the United States, and the same shall be, and is hereby, apportioned to the States and Territories and District of Columbia, respectively, in proportion to population as ascertained by the census enumeration of the year 1890.

"Sec. 2. That the said direct tax laid by this act shall be assessed and laid on the value of all land exclusive and irrespective of the improvements thereon; Provided, That all lands belonging to the United States, or to any State, county, or municipality, shall be exempted from assessment and taxation under this act; And provided further, That all land subject to taxation under this act shall be valued and assessed, for the purpose of taxation, at its full market value, on the first Monday in March of each year, the valuation for the fiscal year commencing on the 1st day of June, 1894, to relate to the first Monday of March, 1894.

"That, for the purpose of assessing said tax and collecting the same, sections 9 to 12, both inclusive; sections 14 to 48, both inclusive, and sections 53 to 58, both inclusive, of that certain act entitled 'An act to provide increased revenue from imports to pay interest on the public debt, and for other purposes,' approved August 5, 1861, are hereby re-enacted and made of full force and effect hi so far as they provide for the assessment and collection of direct taxes on lands and lots of ground, and for any and all methods and procedure in the levying, collection, and enforcement of such taxes."

Mr. MAGUIRE (continuing) said:

Mr. Chairman: The arguments in support of the pending amendment have all proceeded upon the theory that the proposed tax upon incomes, above $4,000 per annum, will compel the rich to bear a fairer proportion of the expenses of the Government than they now bear, and that the people will be satisfied with the accomplishment of that result. The people do, indeed, very much desire the establishment of such a system of taxation, and their claim for a more equitable distribution of the burdens of taxation is unquestionably just. But they are really desirous of substantial relief from the present power of the rich to use their wealth for the oppression of the poor; and they expert some measure of that relief to come to them through the income tax.

Such relief will not come from the income tax, nor will that change in our system of taxation even tend to curb the oppressive power of wealth. It simply puts a 2 percent tax mainly on the results of useful investments and of personal effort. The control of labor by wealth, in certain forms of investment, and the consequent unfairness in the distribution of the products of labor is a matter of infinitely greater importance to the people than the equalization of the burdens of government, which is sought to be accomplished by the income tax. I am in favor of the income tax, as proposed by the Committee on Ways and Means, because it is better than the system of taxation now prevailing; because the burdens which are laid by the income tax, wherever they may ultimately fall, are all for public uses, while under the tariff system three parts of the burden are laid for the enrichment of private individuals to every one part that is collected for public use.

As a choice between the income tax and any extension of tariff taxation, beyond that provided for in the "Wilson" bill, I will unhesitatingly vote for the income tax.

UNDUE POWER OF WEALTH.

But, sir, I seek by the amendment which I have just submitted to establish a system of taxation by which the revenues necessary for the support of this Government can be raised without any burden whatever upon either industry or commerce, and by which, at the same time, the power of accumulated wealth over labor will be destroyed. The power of wealth to oppress labor results almost entirely from the present investment of wealth in the control of the natural resources, from which alone labor can produce wealth.

Land is the storehouse in which the Creator has placed the raw materials of all wealth, and labor is the means by which those raw materials are changed into forms of usefulness for the satisfaction of human wants. Wealth is the result of labor applied to land, or to the products of land, and land furnishes not only this raw material for all wealth, but it constitutes also the home and the working place of all labor. All of these things the Creator freely provided for the use and sustenance and shelter and comfort of mankind by giving the land of the world, with its abundant resources, as an equal heritage to the whole human race. The same Creator made man a land animal. He must live upon the land, and from the fruits of the land, if he shall live at all. All of his food and clothing and shelter, and every other thing that will tend to satisfy his wants, natural and acquired, come from the land. Indeed, his whole physical body comes from the land, and goes back to the land again at the close of his life.

Separated from the land, man must perish, just as a fish would perish on being separated from the water, which is his element. Therefore, if man has a natural and inalienable right to life and to liberty and to the pursuit of happiness, he must have a natural and equally inalienable right to the means which the Creator, who gave him life, has freely and abundantly provided for his support. There can be no right to life more sacred than the right to the means of sustaining life. "You take my life when you do take the means by which I live." Liberty is impossible to one man so long as another man controls his means of living.

Single Tax as a fiscal policy

Single Tax as a fiscal policy

BY L. B. SCHWARTZ
of the St. Paul Bar

"OUR present taxing system,” the late Judge Jaggard of the Supreme Court of Minnesota, once exclaimed, “is the most asinine imaginable.” A strong statement that! And yet any student of taxation will tell you that it might be applied not only to the system in Minnesota to which the judge was referring, but to the fiscal policy of every state in the Union.

Benjamin Harrison, President of the United States as well as eminent constitutional lawyer, jokingly suggested as the only reform possible, an invitation to the rich men of the country to come forward and generously hand over all their property to the government. Every remedy seems to have been suggested from that of President Harrison to that recently made by a self styled “economist,” who urged that all property should be taxed, as the true principle, and to carry it out, that any property wilfully omitted from the taxpayers’ sworn statement should be unceremoniously confiscated by the state.

Wonderful, is it not? Pick out almost any of us, and ask him how he would manage it, if it were his own private business, and I would wager dollars to doughnuts, that he could in a jiffy have a system answering every canon of taxation and every dictate of justice. And yet there we stand, 90,000,000 of the most progressive people on earth (by our own admission), and what does Shakspere say -- “in apprehension so like gods?” — and heirs to all the wisdom of the gods that went before us, able to avail ourselves of their mistakes and experiences from hoary old Egypt’s time up to our very own, tinkering with the problem in over forty independent experimental stations, and yet, unable to evolve a better system of raising our public revenues than one characterized and generally admitted to be asinine.

Now what are the canons of taxation? The economists tell us—but let us not rely on what others tell us. What, shall another tell us how to run our own business? We, all the people, want to do the right thing, don’t we? So let us ourselves evolve a system which will do the right thing by all of us. What requisites, then, must a system of taxation have in order that it may deal justly with all of us and with each of us.

Well, first, it must be a just tax. But what is a just tax?

    Qualification 1. A just tax must not have the effect of taking property from one of us and transferring it to another’s pockets; and conversely, it must not take something belonging to all of us and transfer it to one of us, nor take from one of us more than his share.

    Qualification 2. A just tax should be certain, so that it shall not offer any incentive to graft and corruption, to injustice, and so that each one of us should be able to see that it works justly.

    Qualification 3. A just tax should take from the citizen in proportion to the benefits he receives, value for value given, and no more.

    Qualification 4. A just tax should not be oppressive, nor kill nor drive away the goose that lays the golden eggs.

    Qualification 5. A just tax should be easily ascertainable and collectible, or inexpensive, as the expense also falls on the citizens.

    Qualification 6. A just tax should stay put,-—one that cannot be shifted; for if the one paying it can shift it by adding the tax to the price of the article taxed, it will finally occur that some will be enabled to shift the whole burden to the shoulders of others.

Here I pause, when some “economist” cries out, “Oh, but you have left out the most important canon; to wit, that in order to be just, the tax should fall as equally as possible on all the members of the community, and that this merely means that each ought to pay according to his ability."

That sounds well, but let us see. Just imagine an office building, one of your 45-story modern sky scrapers, owned by its tenants in common. Now you have each tenant occupying a certain space. Its heating, gas, and water plants are its public utilities. Its elevator service is its traction system. It has its police and health department in its janitors. It perhaps has its private fire department, and possibly its own private hospital in its sick and resting rooms. A complete little government or city in itself. Now suppose you go to those tenants and ask them to raise the revenues for the support of that building by a tax, what would they call assessing each other equally? Say it costs $20,000 per annum to run that building, would they divide the expense among its two hundred tenants, assessing each $100? Or can you imagine them assessing each other according to their ability to pay, or the amount of business they did? Not if they were sane. What then? Manifestly they would assess each tenant according to the value of the space he occupied in that building. That, each would instinctively recognize as the just tax, as the one that treated all with equal favor, — equally, equitably, and justly. That tax or assessment would be easily ascertainable and collectible, would stay put, and could not be shifted from one tenant to another. It would take from each a value that belonged to all, and from no one, a value belonging to him alone. It would entail no corruption; for each would know how much space he occupies and the value of that space. It would be inexpensive, as one official could assess and collect all of it. It would not be oppressive, for you could not collect more than the value of the space each occupied; and if a tenant paid less than that value, other tenants would object to his taking part of a value that belonged to all for his own private pocket. If the amount collected was more than was needed, the surplus would be put in the public treasury for the benefit of all the tenants; and if they desired, they might with it add a library or any other improvement in the building that would add to their common use or enjoyment; or they might, if they desired, grant a pension out of the surplus to such tenants as were disabled in that building.

Suppose the tenants should, however, adopt your system of making each pay according to his financial ability. What would happen? Why the same thing that is happening wherever it is tried. How would you gauge the tenant’s ability to pay? Well, as we do now, by his sworn returns, of all his property, money in bank, etc. Second, by the kind of clothes and furniture he had. Third, by a system of spies prying into the private affairs of each tenant. Fourth, perhaps, by making each tenant pay a tax on everything he bought outside of the building. (This would, of course, serve the double purpose of raising revenue, and “protecting" the tenants.) Fifth, by an income and inheritance tax; and lastly, by assessing each tenant, in front of whose door you had repaired the hallway, so that tenants walking in and out of his office should not break their necks.

The result would be as follows: Most of the tenants would become perjurers, and swear they were paupers. The system of spies, euphemistically termed deputy assessors, would be rather expensive. The temptation to use bribery and show favoritism would prevail, as each tenant would try to get as low an assessment as possible. The more cunning and able who could control the election of assessor would pay less, and the weaker and honest, more. Soon you would have a “Boss,” who would by promises and favors control the election. The tenants, who like the farmers, must keep their property in full view, would get the worst end of the bargain, while the bankers and brokers who could conceal their assets, the best end of it. The tenants selling goods would add their assessment to their expense, and so shift the tax to the purchasing tenants, and so no one could tell who was actually paying the assessment. Some of the tenants would soon engage in smuggling in goods to evade the "protective” tax. Incomes and inheritances would be concealed as much as possible, the honest and the guileless alone paying their share. You would have a premium on crookedness and a fine on honesty. The tenants would be discouraged from buying good clothes and furniture, besides their purchasing power being diminished by the tax; and they would fight like steers, to keep the defective walk in front of their door from being repaired. Some of the more farsighted tenants would pre-empt as much space as they could get, and sublet to others as they came in, holding some of the space for a rise in value. Soon some of the tenants would discover that they did not need to work, that it paid better to sit back and let the other tenants work, and just pay them rent. This rent would of course go up with every increase in the prosperity of the working tenants, so that no matter what the working tenants produced, the increased rent would absorb it all. With every new tenant increasing the value of space in the building, and the space lords getting more rent than they could use, they would then loan it back to the other tenants as capital, and in the form of interest still further deplete the wealth of the working tenants. And why any sensible tenants should go to all that expense, trouble, and complication, when by assessing each according to the space each occupied it could all be avoided, is beyond the comprehension of a sane mind.

Yet is not that exactly what we, all of us, tenants in common of mother earth, — of city, county, state, and nation, — are doing? Here are a thousand and one proposals, a very babble of tongues, — tariff for revenue and tariff for protection, income, inheritance taxes, direct and indirect tax, — and there is the one plain thing to do, so evident to the single taxer, and yet all others seemingly unable to grasp the thought. For the single tax is nothing more nor less than this, — abolish all other taxes, tariffs, and assessments. Instead assess yourselves according to the value of the space you occupy.

Here some one objects, “Would you put all taxes on that little farm, or that little home, and exempt the stocks and bonds of the rich and the stock of the department store?” My answer can only be, that if that were the effect of the single tax, all the “interests” in the country would be clamoring for it, instead of fighting it tooth and nail, as they are doing in Oregon, Washington, Missouri, and Ohio. In the last state, at its recent constitutional convention, the large business interests there represented had a prohibition put in the new Constitution against the initiative and referendum, then adopted, ever being used to bring in the single tax. Now the initiative and referendum are always desired by the common people. The rich do not need it. They can usually get what they want more easily by lobbying through the legislature. And yet these rich interests put in a constitutional inhibition against the “mob” ever using the initiative to lift the burden of taxation from stocks and bonds and putting it on the small farm and home. Queer, is it not?

No, Mr. Objector, the only thing about the farm that would be taxed under the single tax, would be the site value of the land. His improvements, cultivation value, stock, buildings, and machinery would all be exempt, and so he would pay less than he does now. One lot in a city 40 by 100 feet, that is valued at $10,000 would pay more taxes than three farms of 160 acres each. And that lot in New York that recently sold for $800,000 would pay as much taxes as a whole county of farmers.

Under the single tax, most of the value of that lot in yearly instalments would go into the public treasury to meet the expenses of government, and so would take off the taxes now resting on the small home and farm. Now its value goes into private pockets, and is paid by the farmer and small home owner, when they buy the goods manufactured or sold on that lot. Having paid this, Mr. Farmer and Mr. “Small-home-owner” are taxed again on their piano, sewing machines, sugar, and what not, by a complicated system of taxes, tariffs, and licenses, all designed to “protect” him, yet it is estimated, strange to say, by taking away from $15 to $20 a month of his small earnings.

A lot on which a small home stands is probably worth $1,000. It is on that valuation that the single tax would be levied, the building, usually worth twice that sum, being exempt. Here Mr. Objector again demurs, "Here is a man that owns a lot on which stands a skyscraper worth $100,000, and next to it is a lot of the same size on which stands a “humble home.” Would you tax them both the same?” My answer is, that humble homes are not erected next to skyscrapers, as the land next to such a building is usually worth say $10,000, and humble home owners are usually not fortunate enough to possess anything more valuable than a thousand dollar lot under their homes. But why should the owner of that skyscraper be fined for building it? By doing so he has benefited the community. We want more buildings. More buildings mean more work and cheaper rent. The man who owns that vacant lot next door is conferring no benefit on the community. He is merely lying in wait, his land absorbing the benefit of every improvement in the community, of every person coming to or born in that community; and at the right moment he will get up, title deed in hand, and hold up the user of that land for a certain amount, which amount the community must pay in the last analysis, in the added price of the things sold or produced on that land. Thus, the members of the community will pay him a value that they have themselves produced. If anyone ought to be taxed more, it is the man who holds land idle, and not the one who puts it to use. But who pays that increased tax on the skyscraper? Not the owner, but the tenant. And who pays the tenant? The man who does business with him. So that it gets down again to Mr. Common-man. It is absolutely beyond the ingenuity of man to devise any tax on personal property that will not be shifted.

Can a tax on land be shifted? No. A tax on land, exclusive of improvements, puts a penalty on holding land out of use, and a premium on using, improving, it. It therefore forces more land into use.

The owners of land being obliged to either use it or sell, its price falls. And so, instead of the tax being added to its price, the tax cheapens its price.

“But why,” says Mr. Landowner, “should land alone be singled out of all property for taxation?” Well, Mr. Landlord, for one reason, because our canons of taxation point your way. If those canons are correct, there is but one conclusion possible. If they are not, it is for you to point out the error. For another reason, because the value of land is peculiarly the result, not of your labor, but the result of the working of the community. It is a community-produced value. Anything else that you own is the product of your own labor or some other person's labor. Did you make that land? You might have been in China without affecting its value. You might have never done a stroke of work, and still the value of that land would go up with every increase of population, and every improvement, public or private, in the community. There it is, as it was since the six days of creation. Fifty years ago, it was worth $10. Twenty years ago its value had increased to $200. Ten years ago its value had risen to $1,000, and to-day it is worth $10,000. Yet it is vacant now and always was so. That is the constant phenomenon of land values. Buildings —everything else deteriorates, decays, disappears, becomes cheaper as time goes on. “There is only one crop of land,” and that is ever growing dearer, absorbing the surplus value produced in the community. There in New York it increased $200,000,000 a year from 1896 to 1900. Who made that increase? The labor of its owners? No. Every man, woman, and child coming to the city, every new street laid, library, building, or home put up has made that value. Now if the value was produced by the community, why is not the community entitled to it? What I produce is mine. What you produce is yours. What we all produce is ours. And just as it would be robbery for me to appropriate what you produced, so is it equally robbery for any one of us to privately appropriate what we produce.

Notice further. Just as in that office building, we saw that as the tenants increased, and the building’s needs increased, its space value became dearer, and so the revenues increased; so in the community the same phenomenon appears. In your small village, its needs and expenses are small. So are its land values. As that village grows to the size of the metropolitan city, its land values rise in direct proportion to its needs. And when its expenses require millions, one little lot is worth a hundred thousand dollars or more. Now morally, the owner of that lot is not entitled to its value. Its value was produced bythe community, and it is therefore robbery for him to appropriate it. The single taxer points out that there is the natural source of the government’s revenues. There is the fund which belongs to the community, and to which it alone is entitled. And it is not entitled to one cent of money or property which I individually produced by my labor.

The owner of the land, you object, may have bought it, and gave the product of his labor for it. Suppose, however, he had bought a slave. By law, I admit, he might be entitled to the product of that slave’s toil. But morally, though he had paid a lifetime’s honest earnings for the slave, he would not be entitled to anything that slave produced. You cannot make something rightful property by purchase which is not so in fact. The title, defective at its source, remains defective, no matter how many times transferred.

Consider what is meant by the assertion of ownership to land. The assertion of ownership to this pen or suit of clothes implies the extension of that right to morally own any number of pens or suits, even to the extent of owning all the clothing now in existence.  If I acquired all that clothing rightfully, that is, by giving the products of my labor in exchange therefor, no one could object to what use I put that clothing, so long as I did not create a nuisance.  That is true from the nature of things.  The amount of clothing that can be made is unlimited; and if I choose to refuse the use of my clothing, either by purchase or exchange, that is my business; and mankind must get busy and make other clothing, and until then, if necessary, use fig leafs to cover its nakedness. Presumably, when I acquired that clothing, I had given equal value therefor, — my labor or its product, for your labor or its product. But suppose I should purchase all the earth, its surface, space, or sites. I might have given the product of my labor, but would I be getting in return the product of anybody’s labor? No. All the sellers could give me or would be giving me would be the right (?) not to let anybody work on that land, until they either gave me or agreed to give me part of their labor. Just think what is implied, when I sell land to you and your heirs forever. I give you a perpetual mortgage on all the labor that shall ever be employed on that land from now until all eternity. Generations will have come and gone, I will have been long dead and forgotten, and yet your descendants and their assigns will be collecting a toll from everything produced on that land, — perhaps a half or a third or two thirds interest, — because you a thousand generations back gave me $10 worth of potatoes, and I gave you a piece of paper describing that land.

Now when I owned that clothing I could morally exclude all people from the use of that clothing. Could I, by owning all the earth, morally exclude all people from living on my earth? “Ah,” you say, you are merely pushing a qualified right to an extreme.” My reply is, that for the same reason that you qualify the right, you must also deny it. For why do you qualify the right? “Because,” you answer, “to give me the right to own all the surface of the earth were to give me the power of life and death over my fellow beings; and that right you cannot admit in anyone, because it is inconsistent with the equal right of all persons to be on this earth.” But, say I, the other persons could work for me and so by their labor purchase part of the earth’s surface from me. You then object that the right to sell implies the right to refuse to sell; and if I refused, I could make all people either quit the earth, or give me almost all their produce as rent. The right, you say, must then be restricted so that each person can own a limited portion of the earth’s surface. Well then, say I, let us divide the earth’s surface among all its inhabitants; surely that is reasonable. Now tomorrow a baby is born. He, in course of time, becomes a man. Say his father has sold or squandered his estate, or willed it away to another child. He also has a right to live on this earth, has he not? Must he quit the planet, unless he finds someone willing to sell him a portion of the earth’s surface? If so, then his life is dependent on somebody’s willingness to sell or not to sell. That is, they have the power of life and death over him. And I thought you said that all persons had an equal right to live. So that it seems that your qualified right when'examined becomes no right at all.

The single tax obviates the difficulty by taking the value of every piece of land, the rental value, for the benefit of all the people. Such land as had no value would of course pay no tax, being free to any user.

Government, society, is a benefit that all of us confer on each of us. The price of a benefit should not be graduated according to the ability of the person to pay, no more than when you sell clothing or office space, do you charge a rich man more than a poor man. Get any tax that does not satisfy our canons or qualifications, and it won’t work, that is all. Tax incomes and inheritances, and only the honest will pay it. It violates qualification 2, and so breeds corruption and perjury. It is beyond the ingenuity of man to devise an unjust tax that will work out justly. Tax goods, and you kill the goose that lays the golden egg. Your tax is added to the value, and so decreases the purchasing power of the masses. When you tax dogs you want less dogs. Do you want less goods or buildings? Besides the purchaser pays it, and so it does not stay put. Stocks and bonds are in the nature of mortgages, and no tax has yet been devised which the mortgagee could not shift to the mortgagor.

The tax on land values satisfies all the canons of taxation. It cannot decrease land, but will decrease its price. It can’t be shifted, because it cheapens land. It is easy of assessment. All of it is in view, and its value easily ascertainable. It takes from no one what he produced, and assesses each according to the value of the space he occupies. It is inexpensive to collect, and needs no espionage system. It is just, and free from incentive to graft and corruption. It stimulates the use of land. More land used means more demand for labor, and that means higher wages. More labor employed means more commodities produced, and that means cheaper commodities. High wages and cheap commodities spell, among other things, the solution to the high cost of living. But that is without the domain of my article. I was merely to discuss the single tax as a fiscal system, not as a social and economic philosophy.

L. B. Schwartz

 

---

Some thoughts about Piketty's "Capital in the 21st Century"

I posted this comment elsewhere, and thought it worth sharing here:

I've not read far into the book yet -- and it is available online as a PDF file -- but by the time I was into the first chapter, it was clear that Dr. Piketty's economic education, extensive as it might be, entirely omitted the ideas of the classical economists who described a 3-factor economy: land, labor and capital. Piketty, like nearly everyone educated in economics in the past 40 to 80 years, writes as if there were only two factors -- labor and capital -- treating land as if it were a mere subset of capital, with no reason to recognize it as differentiated.

Land -- not only urban sites, but also the other things the classical economists would recognize as Land, such as water rights, oil, electromagnetic spectrum (our airwaves which we all say belong to the American people, but which are in reality owned by corporations), landing rights at busy landlocked airports, geosynchronous orbits, urban street parking, the value of dozens of other non-renewable natural resources -- is completely different in character from that which is created by labor. To fail to recognize that difference lies at the bottom of our inequality problem.

That which individuals and corporations produce is rightly individual property. That which the community and nature produce is rightly common property, belonging to all of us. Conflating Capital and Land leads us to permit the privatization of that which is rightly our common treasure.

You might be interested to know that the Landlord Game, invented by 1902, was intended to teach this concept. You have probably played Monopoly, which was based on this game, played with very different rules.

Explore the ideas of Henry George. Between 1885 and 1900 or so, everyone knew the name and many well understood his ideas. You might start with "Social Problems" or the more analytical "Progress and Poverty," or his speeches, "The Crime of Poverty," "Thou Shalt Not Steal," among others, online at http://www.wealthandwant.com. See also http://lvtfan.typepad.com.

Dr. Piketty and others whose education in economics has omitted George's ideas should not be treated as experts; they've mixed apples and oranges and not noticed that what they've created impoverishes the vast majority of us -- and enriches a few. (Parenthetically, consider who donates heavily to our universities.)

 

George Bernard Shaw: 1885 speech on private property and privilege

Interesting comments on a number of things, including doctors, slaves, soldiers, income inequality, sobriety, thrift, poverty,  

Some excerpts:

Bad as we are, I believe that if we all understood how we are living, and what we are doing daily, we should make a revolution before the end of the week. But as we do not know; and as many of us, forseeing unpleasant revelations, do not want to know; I can only assure you that I am in perfect concord with standard economists when I state that competition is the force that makes our industrial system self-acting. It produces the effects which I have described without the conscious contrivance or interference of either master on the one hand, or slave on the other. It may be described as a seesaw, or lever of the first order, having the fulcrum between the power and the weight.

and

The so-called right of private property is a convention that every man should enjoy the product of his own labour, either to consume it or exchange it for the equivalent product of his fellow labourer. But the landlord and capitalist enjoy the product of the labour of others, which they consume to the value of many millions sterling every year without even a pretence of producing an equivalent. They daily violate the right to which they appeal when the socialist attacks them. Nor is their inconsistency so obvious as might be expected. If you violate a workman's right daily for centuries, and daily respect the landlord's right, the workman's right will at last be forgotten, whilst the landlord's right will appear more sacred as successive years add to its antiquity. In this way the most illogical distinctions come to be accepted as natural and inevitable. One man enters a farmhouse secretly, helps himself to a share of the farm produce, and leaves without giving the farmer an equivalent. We call him a burglar, and send him to penal servitude. Another man does precisely the same thing openly, has the impudence even to send a note to say when he is coming, and repeats his foray twice a year, breaking forcibly into the premises if his demand is not complied with. We call him a landlord, respect him, and, if his freebooting extends over a large district, make him deputy-lieutenant of the country or send him to Parliament, to make laws to license his predatory habits.

 

MR. G. BERNARD SHAW ON SOCIALISM.

Gems from George: Economic Terms -- Land - continued

THAT land is only a passive factor in production must be carefully kept in mind. . . . Land cannot act, it can only be acted upon. . . . Nor is this principle changed or avoided when we use the word land as expressive of the people who own land. . . . 

That the persons whom we call landowners may contribute their labor or their capital to production is of course true, but that they should contribute to production as landowners, and by virtue of that ownership, is as ridiculously impossible as that the belief of a lunatic in his ownership of the moon should be the cause of her brilliancy.

— The Science of Political Economy
unabridged: Book III, Chapter 15, The Production of Wealth: The First Factor of Production — Land 

Shearman: The Distribution of Wealth, Part I (1887)

The Distribution of Wealth

by Thomas G. Shearman
The Land and Labor Library

Published weekly, by Henry George,
at the office of The Standard, 25 Ann Street, New York  October 22, 1887
printed in The Standard, October 8, 15 and 22, 1887

Mr. Edward Atkinson is a gentleman of whom I have no disposition to speak in any other terms than those of respect and esteem.  He has done a vast amount of useful work; he is sincerely desirous of promoting the welfare of mankind; he has done much for the dissemination of sound ideas on economic questions, and he is always sincere and earnest.  His weakness is mostly in a too strong conviction of his own infallibility, in the full persuasion that he knows just what needs to be done, how it is to be done and when it must be done, and a consequent peremptory method of disposing of everybody as something very like a fool who does not agree with him upon all these details.  Thus, he has been for many years in favor of free trade, and in former years he strenuously insisted upon the vital importance of reform in that direction.  He has not recanted his opinions; but he has become more interested in other questions, and now he has very little patience with, and indeed, something very like contempt for, men who hold his opinions as to free trade and think that issue more important than the new questions which have recently attracted Mr. Atkinson's mind.

In May last Mr. Atkinson addressed the Boston labor lyceum, ostensibly on the subject of the proposed eight hour law, but really on the question, "How are the profits divided?"  His address, as revised, has but just come into my hands, and it raises some issues which need further consideration and a broader view.  In reviewing its conclusions, it may be as well to accept its statement of facts and statistics without dispute, for it is so evident that Mr. Atkinson has overlooked important elements of the problem, upon his own showing, that it is not worth while to enter into controversy as to the facts or figures.

Mr. Atkinson claims that in $1,100,000 worth of cotton sheeting there is not more than $145,000 profit to capitalists, while $15,000 go in taxes and $940,000 to labor.  He makes no allowance whatever for rent, except perhaps for the rent of the ground upon which the mill stands.  He assumes that 1,400 bales of cotton can be grown upon land which pays no rent and costs nothing to the cotton grower.  Of course he makes no allowance for rent in the cost of supplies, machinery, repairs, freight, etc.  In one place he says that rent does enter into the cost; in another he says that if the landlord is taxed upon his rent he will add the tax to the rent, and so it will enter into the cost; and finally he says that rent amounts to a trifle less than 1% of sales, anyway.  Now the truth is that before this $1,100,000 worth of cotton sheeting can get into the hands of the people there must be paid out of the proceeds rent, or the interest on the cost of the land, which is the same thing, on the land where the cotton is grown, on which the supplies are manufactured, on which the railroad is laid, on which the repairs are done, on which the sheeting mill is situated, on which the great stores where the sheetings are sold stand, and, finally, on which the residences of the 3,400 persons said to be engaged in producing these goods also stand.  All this is plainly stated in Mr. Atkinson's "Distribution of Products."  We will leave Mr. Atkinson to reckon the amount of these items, simply remarking that upon his own estimates the single item of the rent of the stores in which the goods are sold would add $100,000 to their cost, and that, making the most moderate allowance for the rent of the other land used in this work of production, it is obvious that rent alone would far exceed the whole sum Mr. Atkinson has allowed to go to compensation for capital.

In the next place, Mr. Atkinson has fallen, for the moment, into the old idea, long ago exploded by Adam Smith, but still current among unthinking people, that what is spent by the rich in their personal luxuries is as truly employed for the general good as that which is spent in productive enterprise.  He seeks to reduce the $145,000 appropriated by capital by showing that much of this is spent in employing labor.  He might just as well include the whole of it, because even the money which he charges to waste, as spent on champagne, etc., is all paid out for labor of some kind. The true rule is that nothing should be charged to labor except that which is expended usefully and so as to promote reproduction.  A lord who employs a hundred servants to wait upon his idle and useless person, not only wastes the money which he pays to them, but also wastes their time and skill in occupations which neither help him nor them to serve mankind any better than they would have done before.  Every dollar thus spent is devoted to waste, not to useful labor.

The Earth-for-All Calendar -- addendum: St. Ambrose and Pope Paul VI

A sig-file on a listserv brought to my attention a quote from St. Ambrose, which, to my surprise, Ernest Crosby didn't include in his Earth-for-All Calendar:

"You are not making a gift of what is yours to the poor man, but you are giving him back what is his. You have been appropriating things that are meant to be for the common use of everyone. The earth belongs to everyone, not to the rich."

 

A bit of research led me to a number of mentions of this passage, including Pope Paul VI's 1967 encyclical, Populorum Progressio, which sets it in this context:

Issues and Principles

22. In the very first pages of Scripture we read these words: "Fill the earth and subdue it."(19) This teaches us that the whole of creation is for man, that he has been charged to give it meaning by his intelligent activity, to complete and perfect it by his own efforts and to his own advantage.

Now if the earth truly was created to provide man with the necessities of life and the tools for his own progress, it follows that every man has the right to glean what he needs from the earth. The recent Council reiterated this truth: "God intended the earth and everything in it for the use of all human beings and peoples. Thus, under the leadership of justice and in the company of charity, created goods should flow fairly to all." (20)

All other rights, whatever they may be, including the rights of property and free trade, are to be subordinated to this principle. They should in no way hinder it; in fact, they should actively facilitate its implementation. Redirecting these rights back to their original purpose must be regarded as an important and urgent social duty.

The Use of Private Property

23. "He who has the goods of this world and sees his brother in need and closes his heart to him, how does the love of God abide in him?" (21) Everyone knows that the Fathers of the Church laid down the duty of the rich toward the poor in no uncertain terms. As St. Ambrose put it: "You are not making a gift of what is yours to the poor man, but you are giving him back what is his. You have been appropriating things that are meant to be for the common use of everyone. The earth belongs to everyone, not to the rich." (22) These words indicate that the right to private property is not absolute and unconditional.

No one may appropriate surplus goods solely for his own private use when others lack the bare necessities of life. In short, "as the Fathers of the Church and other eminent theologians tell us, the right of private property may never be exercised to the detriment of the common good." When "private gain and basic community needs conflict with one another," it is for the public authorities "to seek a solution to these questions, with the active involvement of individual citizens and social groups." (23)

The Common Good

24. If certain landed estates impede the general prosperity because they are extensive, unused or poorly used, or because they bring hardship to peoples or are detrimental to the interests of the country, the common good sometimes demands their expropriation.

Vatican II affirms this emphatically. (24) At the same time it clearly teaches that income thus derived is not for man's capricious use, and that the exclusive pursuit of personal gain is prohibited. Consequently, it is not permissible for citizens who have garnered sizeable income from the resources and activities of their own nation to deposit a large portion of their income in foreign countries for the sake of their own private gain alone, taking no account of their country's interests; in doing this, they clearly wrong their country. (25)

 

(19) Gn 1. 28.

(20) Church in the World of Today, no. 69: AAS 58 (1966), 1090 [cf. TPS XI, 306].

(21) 1 Jn 3. 17.

(22) De Nabute, c. 12, n. 53: PL 14. 747; cf. J. R. Palanque, Saint Ambroise et l'empire romain,Paris: de Boccard (1933), 336 ff.

(23) Letter to the 52nd Social Week at Brest, in L'homme et la révolution urbaine, Lyon: Chronique sociale (1965), 8-9.

(24) Church in the World of Today, no. 71: AAS 58 (1966), 1093 [cf. TPS XI, 308].

(25) Ibid., no. 65: AAS 58 (1966), 1086 [cf. TPS XI, 303].

 

Those interested in Catholic Social Thought should look for a new book which came out of a 2007 conference held at the University of Scranton, and edited by Professor Kenneth R. Lord of UScranton, entitled "Two Views of Social Justice: A Catholic/Georgist Dialogue."  The version I've seen is the October, 2012, issue of The American Journal of Economics and Sociology, and I understand that it will be made available in other forms as well.

The abstract for the book:

Sixteen scholars have come together in this issue to examine eight social-justice themses from the perspectives of Catholic Social Thought and the philosophy of Henry George.  The themes they address are natural law, human nature, the nature of work, the nineteenth-century papal encyclical Rerum Novarum, causes of war, immigration, development, and wealth, and neighborhood revitalization.  While they sometimes wrangle with each other, their common aspiration is the same as their nineteenth-century predecessors,: to find solutions to the human suffering caused by injustice. 

The Earth-for-All Calendar: November 25 -- Alfred Marshall

The use of a certain area of the earth's surface is a primary condition of anything that man can do; it gives him room for his own actions, with the enjoyment of the heat and the light, the air and the rain which nature assigns to the area; and it determines his distance from, and in a great measure his relations to, other things and other persons.  We shall find that it is this property of "land" which, though as yet insufficient prominence has been given to it, is the ultimate cause of the distinction which all writers on economics are compelled to make between land and other things.

— PROF. ALFRED MARSHALL, of the University of Cambridge,

Principles of Economics, Vol. I., Book 4, Chap. 2, Sec. I.

 

The Earth-for-All Calendar: November 20 -- Isaiah

They shall build houses and inhabit them; and they shall plant vineyards and eat the fruit of them. They shall not build and another inhabit; they shall not plant and another eat.

— Isaiah, LXV., 21-2.

Corn Belt Farmland: The Newest Real Estate Bubble? : NPR

Corn Belt Farmland: The Newest Real Estate Bubble? : NPR.

As you read this, recall that a single acre of urban land can be worth $250,000,000 or more -- over 23,000 times what the recently-doubled farmland described in this article sold for!!  Also, it seems worthwhile to point out that 160 acres (one quarter of a square mile), at $10,700 each, works out to $1.7 million -- currently well below the threshold for the federal estate tax! 

Consider, too, what it is that the land speculator brings to the process of production, and what he is rightly entitled to in a fair and just society, and what society is entitled to, and what the workers -- the farmer and his employees -- are entitled to, and what the capitalist -- the fellow who pays for the buildings and equipment -- is entitled to.  Seems like the land speculator is making out awfully -- awefully! -- well but isn't producing or creating anything!!  Why do we do things this way?  Did the absentee landlord deserve a share of the crop the farmer created?  If the farmer has to pay rent to someone, shouldn't it be the community?  Wouldn't it be better if America's investors were motivated to put their funds into better equipment (capital) or employing people (labor)?

November 8, 2012 

Howard Audsley has been driving through Missouri for the past 30 years to assess the value of farmland. Barreling down the flat roads of Saline County on a recent day, he stopped his truck at a 160-acre tract of newly tilled black land. The land sold in February for $10,700 per acre, double what it would have gone for five years ago.

Heading out into the field, Audsley picked up a clod of the dirt that makes this pocket of land some of the priciest in the state. 

"This is a very loamy, very productive, but loamy soil," Audsley said. "A high-clay soil will just be like a rock and that's the difference between the ... soils. And the farmers know this and the investors know this. That's why they pay for it what they do."

A Steep Surge In Prices

It's not just the value of Missouri cropland that's rising. Corn Belt farmland prices from Iowa to Illinois and Nebraska to Kansas have been sky-high lately, boosted by $8-a-bushel corn.

"We paid about $3.3 million for [about 650 acres] in Southeast Illinois in 2009," said Diggle, who is the CEO of Singapore-based Vulpes Investment Management. The company handles $250 million of investor money, about 15 percent of which is in farmland.The high commodity prices have helped encourage investors like Steve Diggle, who have no connection to farming, to compete for their very own acreage in the Heartland.

"This year we sold it at auction and we got $5.1 million," he said, referring to the Illinois farmland. "That's 55 percent higher than we paid. Plus we got two yields — one of 3.5 percent and one of 5 percent. So, you know, as an investment, that's 63 percent over three years. [It] is great and we're extremely happy with it."

Diggle says his firm also purchased a 1,400-acre tract in Illinois two years ago. The company plans to hold on to it to make money through cash rents and land appreciation.

"The value of your land may go up or down. But as long as bond prices remain where they are, it's very hard to see how we'll have a sustained bear market for agriculture," Diggle said. By comparison, he said, the extremely low returns in the bond market are "just so inferior."

A Safer Investment

You don't have to be a billionaire to invest in farmland.

Physics professor Andy Trupin, who lives in Delray Beach, Fla., bought a 155-acre tract of farmland in Lebo, Kan., two years ago because it looked like it would make him more money than gold or the stock market. He also owns another tract that's primarily pastureland.

"Farmland seemed like a much safer vehicle to get an income stream even though ... it's not a high-income stream. At least it's more than you would get on Treasuries at any duration," Trupin said. "And at the same time, [farmland offers] price appreciation or to at least [holds] its value in the event of an inflation period."

The investment has paid off so far, Trupin said. He rented out the land to a local farmer who grows corn, soybeans and wheat. Even the brutal drought failed to knock down the investment.

"Amazingly we managed to get 20 bushels to the acre of corn even though the place was as dry as Las Vegas last year," Trupin said. "I'm willing to let the income from this thing fluctuate. In bad years, it's a slight loss — maybe a couple of thousand on the year — and in good years, you gain up to $10,000 on it."

Trupin found the land online and got help purchasing it by Realty Executives of Kansas City. The company says 90 percent of its new customers are investors like Trupin, and it holds seminars for investors that walk them through the process of evaluating and buying farmland and how to find local farmers to rent the land.

"There's probably a higher percentage now of people who are strictly investors, stock market people, money-market-type investors, and ... they're buying all types of land," said Dale Hermreck, a broker for Realty Executives who says he sold $21 million worth of farmland in Kansas last year.

"We have a lot of outside interest from Texas, Chicago, New York," Hermreck said. "I get calls and inquiries all over the United States."

The Specter Of A Bubble

But to University of Missouri agriculture economist Ron Plain all of this sounds a bit like the housing bubble burst of 2006. He is concerned a similar bubble could be happening in farmland.

"You get several years going up faster than that long-term trend of 6 percent [annual increases] and you're then in a situation where you're sort of due for a correction," Plain said. "And the way you correct is pull those land values down — or 'pop the bubble' ... and so there's concern about that and it's kind of reasonable to worry."

Plain said that with mortgage rates at their lowest in 60 years, it's reasonable to expect the cost of borrowing to go up eventually. And if crop prices retreat from record highs, he said, that means "less income per acre and therefore less ability to pay for farmland."

Should a bubble burst, farmland might be harder to sell, especially compared with other more liquid investments. But investors argue that any bubble is still far off, and they believe that farm acreage will remain a solid long-term investment so long as the demand for food continues to grow.

It remains to be seen whether investors will be able to compete with farmers for the small supply of high-quality cropland available in the Midwest, says broker Hermreck.

"I have people call me all the time and I just don't have what they're looking for," Hermreck said. "Simply supply and demand. It's just not there. I could sell an awful lot more of this land if it was available. And people seem to hang on to something that's making some money and real popular. It's just real popular now to own land."

Abbie Fentress Swanson reports from Missouri for Harvest Public Media, an agriculture-reporting project involving six NPR member stations in the Midwest. For more stories about farm and food, check out harvestpublicmedia.org

The Earth-for-All Calendar: October 23 -- Froude and Spencer

Land never was private property in that personal sense of property in which we speak of a thing as our own, with which we may do as we please.

— J. A. FROUDE, History of England, Vol. I., Chap. I, p. 20.

Equity does not permit property in land.

— HERBERT SPENCER, in 1850, Social Statics, Chap. IX.

The Earth-for-All Calendar: October 5 -- Spencer

Equity, therefore, does not permit property in land.  For if one portion of the earth's surface may justly become the possession of an individual and may be held by him for his sole use and benefit as a thing to which he has an exclusive right, then other portions of the earth's surface may be so held; and eventually the whole of the earth's surface may be so held; and our planet may thus lapse into private hands.

— HERBERT SPENCER, in 1850, Social Statics, Chap. IX.

The Earth-for-All Calendar: October 2 -- Jefferies

That any human being should dare to apply to another the epithet "pauper" is, to me, the greatest, the vilest, the most unpardonable crime that could be committed.  Each human being by mere birth has a birthright in this earth and all its productions; and if they do not receive it, then it is they who are injured, and it is not the "pauper," oh, inexpressibly wicked word! — it is the well-to-do who are the criminal classes.

— RICHARD JEFFERIES, The Story of My Heart, Chap. X., p. 122.

The Earth-for-All Calendar: September 29 -- Froude

Land is not, and cannot be, property in the sense in which movable things are property.  Every human being born into this planet must live upon the land if he lives at all.  He did not ask to be born, and, being born, room must be found for him. The land in any country is really the property of the nation which occupies it.

— J. A. FROUDE, Ireland, Nineteenth Century, September, 1880, p. 362.

The Earth-for-All Calendar: June 10 -- Prof. Cairnes

Sustained by some of the greatest names — I will say by every name of the first rank in Political Economy from Turgot and Adam Smith to Mill — I hold that the land of a country presents conditions which separate it economically from the great mass of the other objects of wealth.

— PROF. J. E. CAIRNES, Essays in Political Economy, Essay VI., p. 189 (1870).

The Earth-for-All Calendar: June 9 -- John Stuart Mill

The essential principle of property being to assure to all persons what they have produced by their labor and accumulated by their abstinence, this principle cannot apply to what is not the product of labor, the raw material of the earth.

— JOHN STUART MILL, Political Economy, Book II., Chap. 2, Sec. 5.

When the "sacredness of property" is talked of, it should always be remembered that any such sacredness does not belong in the same degree to landed property.

— JOHN STUART MILL, Political Economy, Book II., Chap. 2, Sec. 6.

The Earth-for-All Calendar: June 8 -- Froude

Seeing that men are born into the world without their own wills, and being in the world they must live upon the earth's surface, or they cannot live at all, no individual or set of individuals can hold over land that personal and irresponsible right which is allowed them in things of less universal necessity.

— J. A. FROUDE, The English in Ireland in the 18th Century,

Book I., Chap. 2, Sec. 6, p. 131.

The Earth-for-All Calendar: May 31 -- Gerrit Smith

I admit that there are things in which a man can have absolute property, and which without qualification or restriction he can buy or sell or bequeath at his pleasure.  But I deny that the soil is among these things.

— GERRIT SMITH, Speech in the U. S. Congress, February 21, 1854,

Speeches of Gerrit Smith, p. 74.

The Earth-for-All Calendar: May 28 -- Froude

To treat land, with the present privileges attached to the possession of it, as an article of sale, to be passed from hand to hand in the market like other commodities, is an arrangement not likely to be permanent either in Ireland or elsewhere.

— J. A. FROUDE, Ireland, Nineteenth Century, September, 1880, p. 369.

The Earth-for-All Calendar: April 23 -- Simon Newcomb

It is well known that these materials and agencies, as fast as they become available, are in the main appropriated by individuals, through the agency or consent of the government, and are then held as private property. Such is the case with the soil and the minerals beneath it. The owners of this property charge as much for the use of it as if it were their own creation, and not that of nature.

— PROF. SIMON NEWCOMB, The Labor Question, North American Review, July, 1870, p. 151.

a link and a longer except follow ...

 

Appropriating the Gifts of Nature

Here's a piece from a 90 year old journal.  There are acres in Manhattan whose value is far higher today -- and the landlords are still reaping what the working people and visitors to New York are sowing.

APPROPRIATING THE GIFTS OF NATURE
By Walter Thomas Mills.

There are portions of New York City in which the land is valued at $40,000,000 an acre. That means $8000 each day from each acre for the landlord, and that entirely unearned by him, before there is a penny for any other purpose. Probably not less than two and one-half million dollars a day, or almost a billion dollars a year, must be earned by the people of New York City and turned over to landlords for permission to use the island, which is a gift of nature, and for the advantages that are protected and maintained by the industry and enterprise of all of the people.

In The Great Adventure, April, 1921

Think what NYC -- and America --  would be like if that "permission to use the island" money was treated as our logical public revenue source, instead of as individuals', corporations' and trusts' private revenue source.

Recall the wisdom of Leona Helmsley: "WE don't pay taxes.  The little people pay taxes."

The Earth-for-All Calendar: April 13 -- Jefferson

Wherever there is in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on.

— THOMAS JEFFERSON (1785), Ford's Writings of Jefferson, Vol. VII., 36.

The Earth-for-All Calendar: March 31 -- Adam Smith

A tax upon ground-rents would not raise the rent of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist and exacts the greatest rent which can be got for the use of the ground.

— ADAM SMITH, Wealth of Nations (1776), Book V., Chap. 2, Art. I.

The Unearned Increment, and Land Speculation

I'm reading a 1910 book by William Harbutt Dawson entitled "The Unearned Increment."  I found these paragraphs particularly compelling.   I think about the 2003 Schiller and Case article about the expectations of home buyers that their purchases would rise in value.  The homebuyers of the last decade didn't understand why land should rise in value -- indeed, most of them weren't conscious of it being land appreciating, not the houses themselves -- but they seemed sure that it would rise forever, and they thought it essential to their own well-being that they get in on that appreciation.

100 years ago, there seemed to be a much better popular understanding of land economics than we have in 2012.  It was widely discussed in quite a number of popular journals read by ordinary people.  One might speculate on why we in the 21st century aren't better informed than we are on the subject.  In whose interests is it that ordinary people not understand the importance and the dynamics land economics?

 

And here it will be convenient to refer to the plea often advanced that speculation in land is legitimate, and that there is no difference between making profits from the sale of land and making profits from the sale of ordinary commodities. Those who hold this view forget or ignore the fact that land differs from every product of man's hands in that, besides being a necessity of existence — the maintainer of life, it is a monopoly article. God made the earth as big as it is, and man cannot make it any bigger. There is so much land in the world, and no one, not even a Rothschild or a Vanderbilt, can add an inch to it. Hats, boots, and coats — manufactured goods in general — can be multiplied indefinitely. The supply is only regulated by the demand, and almost invariably the cost decreases as the demand is augmented. With the land it is otherwise: the absolute supply cannot be increased, and the cost grows with the growth of the demand. Moreover, in paying for the goods offered by the manufacturer, we pay largely for labour; but no amount of labour can produce land. It existed before man existed, and is not produced. Landed property is the one commodity of exchange in respect of which civilised society refuses to recognise absolute rights.

It may be granted at once, however, that it is impossible to artificially prevent the value of land from increasing. It would be absurd to try to check the operation of social forces which act from necessity. If there were no private ownership of land, but the State were the custodian and grand lessor, the value of that commodity would inevitably tend to increase owing to a multiplicity of causes which act independently of private and collective possession of the soil. Yet while it may not be possible artificially to prevent value-growth, it is possible and expedient to check artificial value-growth. Were the unearned increment secured wholly or even in part to society, there would be less inducement to speculation in land, and the increase in its value would be dependent upon healthier and socially more desirable causes. Men do not speculate commercially for amusement or the mere love of excitement, but for money, and if there were no prospect — or little prospect — of contingent gain, the great inducement to land speculation would be taken away.

At the idea of resistance to speculation the individualist will raise his hands in alarm and remonstrance. But these pages are written on the assumption that the interests of speculators cannot claim any partial consideration in the adjustment of the important problem under discussion — or, indeed, of any problem affecting the well-being of society. Those who hold the views here expressed would not dream of prohibiting speculation in land; all they say is, that society is not called upon to sacrifice its interests to the speculators, or to offer to the latter any facilities for doing it mischief. It cannot surely be considered a social advantage that a small class of men should be able, owing to their possession of a monopoly in land, to force up its value to fictitious and fabulous heights; nor can it be regarded as desirable that the value of land should be increased in order to allow of speculators enriching themselves. The result is to create extortionate rents, which, so far as trade and industry are concerned, make production dearer, and thus injure the consumer, and, so far as concerns dwellings, compel the householder to disburse an excessive proportion of his income in the mere sheltering of himself and his family within stone walls. Apart from the gains which fall to the intermediary speculator who does not buy land to keep, but to sell, the owners of the soil pocket the public tribute paid in the form of increasing rents. For their part, the house occupiers suffer in two ways by the growing value of land: they must pay more for the dwellings they live in, and more for the articles they use and consume. It cannot be to the interest of society that the rents of town dwellings should average, say, £20 instead of £15, and should increase 5% or even 2% every year. If such an increase fell to the whole community, the evil would not be so great, for those who paid it would in one way or another reap the benefit; but, as matters are, it all goes into the landlords' purse.

The Earth-for-All Calendar: March 22 -- Sheldon Amos and Marmontel

The relation of a state to its territory, which in modern times enters into the essential conception of the state, implies that the land cannot be looked upon, even provisionally, as a true subject of permanent individual appropriation.

— PROF. SHELDON AMOS, Science of Law, Chap. VIII., p. 166 (1874)

 

Property in land is always conditional. Land is the source of the life of the state, and the state must exist at any cost.

— MARMONTEL, Address in Favor of the Peasants of the North (1757),

Oeuvres, Vol. X., p. 92.

Bob Andelson: An Open Letter to Pope John Paul II

Open Letter to Pope John Paul II

by the late Robert Andelson

Your Holiness,

THE QUESTION OF MISERY

At the outdoor mass you held in Wroclaw in Poland during your recent visit to that country, you said the following very true and sincere words:

"The Earth is capable of feeding everyone. Why therefore -- here at the end of the 20th century -- should thousands of people die from starvation" -- "Pray solidarity will prevail over the unrestrained thirst for profit and ways to handle laws of trade, which do not take into consideration inalienable human rights".

It was the same concern about the greed of the wealthy and the plight of the poor, that your predecessor, Pope Leo XIII, expressed in his Encyclical Letter of 1891, 'Rerum Novarum'. Yet, in the more than hundred years that have past, if there has been a change, it has been for the worse!

The wealth is there. The growth of industry and the discoveries of science about which Pope Leo spoke, are even more fantastic and surprising than he would have imagined in his most inspired dreams. The enormous fortunes of individuals, of which he also spoke, have become more enormous. Yet the poverty is still there.  Even in countries that are considered wealthy, people are homeless and live in cardboard boxes; people die, not just by the thousands as your Holiness said in Wroclaw, but by the millions, from poverty related diseases, malnutrition and starvation. You are indeed right to ask the question:

WHY?

THE EXCLUSION FROM THE GIFTS OF GOD

As your Holiness will know, the Encyclical Letter of 1891 was not only an attack on socialism, but also a strong defence of the right to hold land as private property, a right that Pope Leo XIII claimed to be natural.

But the right to hold land includes the right for the owner to exclude other people from it, and, as all usable land in industrially developed countries is owned in that way, people without such a right will be unable to enjoy the gifts of God unless they accept the conditions exacted of them by a landowner. Neither can they work, reside nor relax without land, and again they have to accept conditions exacted by a landowner.

Normally the landowner will ask people to pay the market-determined site rental, which is high because of the many excluded people who want land, or he will offer to let them work at a market-determined wage, which is low because of many excluded people wanting a working place.

Some people, in fact -- as a consequence of the many excluded -- a growing number of people, can neither qualify for a job nor afford to pay the site rental, and they have to live on the streets, on the roads, at the dumping grounds or wherever they can find a poor shelter, some clothes and a little to eat. Some of them find that crime and prison give them a better life than there is available through the legal opportunities open to them.

In some countries Social Security is implemented to mitigate the cruel consequences of the exclusion of people from the gifts of God. The Social Security bill is not paid by landowners, but by entrepreneurs, wage earners, pensioners, savers and consumers.

In other countries only private charity is available to relieve the hardships.

But neither Social Security nor charity will change the basic injustice that causes the horrible conditions of the people excluded, that increases the site rentals to be paid for the use of land, and reduces net-wages, widening the gap between poor and rich. The basic cause of these evils has to be destroyed.

Political leaders from all over the world, including representatives of the Holy See, agreed at the United Nations conference on Human Settlements (Habitat II) at Istanbul last year, that:

"The failure to adapt, at all levels, appropriate rural and urban land policies and land management practices remains a primary cause of inequity and poverty".

LETTER TO POPE LEO XIII

Allow us, your Holiness, to point to the Open Letter of September 11th, 1891, written in New York by Henry George and sent to your predecessor his Holiness Pope Leo XIII, as a response to 'Rerum Novarum'.
 
Published as a book this Open Letter has been read by many thousands, and still today the book is sold and read.

Henry George did consider 'inalienable human rights' and 'unrestrained thirst for profit and ways to handle laws of trade'. On exactly this background he spoke for all people's equal rights to the gifts of God.

To maintain this right for everybody and at the same time to allow exclusive right for some to own land as private property, he advocated that people who are given the exclusive right to own land -- and thereby the right to exclude other people from the gifts of Nature -- should pay a compensation to the people they exclude (in fact to all citizens).

The compensation, as a duty to be paid by the landowners, should be the market-determined rentals of the sites from which they can exclude others. This being a fair charge of justice as the rentals are not due to efforts or investments made by the landowners, but due to the development of society and to the growth of the population of human beings, all wanting a place to work, and a place to reside.

The rentals should be collected from all landowners by society, and the revenue should be used to the benefit of all citizens. In that way, Henry George emphasized, all citizens would be able to get their equal share of the gifts of God.

HOLY INCENTIVES OR HOLLOW FALSEHOOD

We do agree with your Holiness and with Henry George that people have private right to property created by man, the right to the fruits of their labour; and also that people can achieve private right to exclusive possession of land, from which they can exclude other people.

But we find it logically inconsistent to believe that people have equal right to life and to be on the Earth, when at the same time some of them have exclusive right to own land as private property without paying compensation to those people whom they exclude from their land.

Your Holiness' sincere words, as quoted initially in this letter, accord with Rerum Novarum of 1891 and with the Habitat II statement quoted above, but they will only become true if your Holiness will succeed in urging on the rulers/governments of this world to collect the annual market-determined Site Rentals of all land in their countries, and distribute the revenue thus acquired to the benefit of all their citizens.

If your Holiness could succeed in persuading the governments to do so, all people on Earth would gain equal access to the gifts of Nature, and true solidarity would become a reality. If not, all statements about equal right to life, to work, to education and to residence, will continue being hollow and false; and our successors will not see a change for the better; on the contrary, they will see the gap between very rich people and alienated poor people grow bigger, and the problems of poverty grow more serious than they are today.

OUR PRAYER

We pray your Holiness may succeed in convincing the governments of this world of the importance of public collection of the annual market rental of all land, and the revenue to be used for equal benefit of all the citizens, thus to provide far all human beings, equal rights to the gifts of Nature.

Let this become the manifestation of the new Millennium, the 2000 year anniversary of the birth of Jesus Christ. Let it become a Jubilee in the original meaning of the word, striking unjust shackles from society; thereby preparing a new age of humanity, a social life in friendship and peace.

 

The Earth-for-All Calendar: March 11 - Pope Gregory the Great

Those who make private property of the gift of God pretend in vain to be innocent. For in thus retaining the subsistence of the poor they are the murderers of those who die every day for want of it.

— POPE GREGORY THE GREAT, Cura Pastoralis,

Sweet's Early English text Society, Vol. II., p. 334.

The Earth-for-All Calendar: March 2 -- Coleridge

Nothing but the most horrible perversion of humanity and moral justice, under the specious name of political economy, could have blinded men to this truth as to the possession of land, the law of God having connected indissolubly the cultivation of every rood of earth with the maintenance and watchful labor of man.  But money, stock, riches by credit, transferable and convertible at will, are under no such obligations, and, unhappily, it is from the selfish, autocratic possession of such property, that our landholders have learned their present theory of trading with that which was never meant to be an object of commerce.

— SAMUEL TAYLOR COLERIDGE, Table Talk, March 31, 1833.

Earnings and findings -- earned and unearned income

Does the Single Tax discriminate between earned and unearned income?

It is the scientific way of doing what we have been feebly attempting to do in an unscientific way, that is, to distinguish between what Dr. Scott Nearing called "property income" and "services income," or between that form of wealth which is the result of individual effort in production and that which is purely the result of the collective effort of society; or between the two forms of wealth which Dr. Ellwood, of the University of Missouri, in a seemingly unwilling recognition of an unwelcome truth, calls "earnings" and "findings."

In the case of the great majority of us (whether as individuals or as partners in corporations) our incomes are so inextricably compounded of earnings and findings, of privilege income and service income, that it is hard for some of us to know whether we belong to the privileged or unprivileged classes, to the slave owners or the slaves, to the confiscators or the victims; and perhaps only those absolutely property less men at the bottom of the social scale can be said to have no share in the "findings" that spring from privilege. On the other hand it is equally true that all industry up to its highest strata, has to pay toll to privilege and provide those "findings" which distribute themselves with more or less inequality over almost the whole of society. How to distinguish between and separate these entirely different kinds of wealth is what all sincere sociologists and honest taxation commissioners have wanted to do and have hitherto failed in the doing.

If we take a handful of sand and a handful of iron filings and mix them thoroughly, and then set a man with the sharpest eyesight and the nimblest fingers to separate the particles, it will take him long to accomplish his task and he will never do it with more than an approximation to completeness. But apply a strong magnet to the mixture and the separation will be accomplished in ten minutes. Then see how the analogy applies to the economic problem in society. Let us imagine the return that should naturally flow to land in the form of rent to take the shape of blue coins made of steel. Let us fancy that the natural reward that goes to capital as interest takes the form of red coins made of wood. Finally let us figure the natural return to human service of all grades as being represented by white coins also made of wood. On examination it will be discovered that in the case of almost every member of society above the rank of the day laborer, his income is tri-colored or composed of all three coins. There are countless "captains of industry" among us who complacently assume their large incomes to be the rewards freely given by a free world in return for their invaluable services, who will be surprised to find how large a proportion of blue their income coins contain. There are multitudes of livers upon what they have called "interest" who will expect to find their coins red, who will be equally surprised to discover that they are almost entirely blue. To complete the parable, the taxation of land values will be like the application of the magnet which will draw away the blue steel coins in whatever stratum of society they may be found, and lay them aside for social purposes, being socially created wealth; leaving the red and white coins to be competed for in a world of free opportunity, without deduction or diminution by taxation or in any other way.

From The Single Tax Year Book (1917)

Brief Statement of Single Tax Philosophy

This is from Joseph Dana Miller, the editor of the Single Tax Year Book (1917), and it is a concise statement which might help make clear why I think this such an important reform in the 21st century.

Men have a right to land because they cannot live without it and because no man made it. It is a free gift of nature, like air, like sunshine. Men ought not to be compelled to pay other men for its use. It is, if you please, a natural right, because arising out of the nature of man, or if you do not like the term, an equal right, equal in that it should be shared alike. This is no new discovery, for it is lamely and imperfectly recognized by primitive man (in the rude forms of early land communism) and lamely and imperfectly by all civilized communities (in laws of "eminent domain", and similar powers exercised by the State over land). It is recognized by such widely differing minds as Gregory the Great and Thomas Paine (the religious and the rationalistic), Blackstone and Carlyle (the legal and the imaginative). All points of view include more or less dimly this conception of the peculiar nature of land as the inheritance of the human race, and not a proper subject for barter and sale.

This is the philosophy, the principle. The end to be sought is the establishment of the principle -- equal right to land in practice. We cannot divide the land -- that is impossible. We do not need to nationalize it that is, to take it over and rent it out, since this would entail needless difficulty. We could do this, but there is a better method.

The principle, which no man can successfully refute or deny even to himself, having been stated, we come now to the method, the Single Tax, the taking of the annual rent of land -- what it is worth each year for use -- by governmental agency, and the payment out of this fund for those functions which are supported and carried on in common -- maintenance of highways, police and fire protection, public lighting, schools, etc. Now if the value of land were like other values this would not be a good method for the end in view. That is, if a man could take a plot of land as he takes a piece of wood, and fashioning it for use as a commodity give it a value by his labor, there would be no special reason for taxing it at a higher rate than other things, or singling it out from other taxable objects. But land, without the effort of the individual, grows in value with the community's growth, and by what the community does in the way of public improvements. This value of land is a value of community advantage, and the price asked for a piece of land by the owner is the price of community advantage. This advantage may be an excess of production over other and poorer land determined by natural fertility (farm land) or nearness to market or more populous avenues for shopping, or proximity to financial mart, shipping or railroad point (business centers), or because of superior fashionable attractiveness, (residential centers). But all these advantages are social, community-made, not a product of labor, and in the price asked for its sale or use, a manifestation of community-made value. Now in a sense the value of everything may be ascribed to the presence of a community, with an important difference. Land differs in this, that neither in itself nor in its value is it the product of labor, for labor cannot produce more land in answer to demand, but can produce more houses and food and clothing, whence it arises that these things cost less where population is great or increasing, and land is the only thing that costs more.

To tax this land at its true value is to equalize all people-made advantages (which in their manifestation as value attach only to land), and thus secure to every man that equal right to land which has been contended for at the outset of this definition.

From this reform flow many incidental benefits -- greater simplicity of government, greater certainty and economy in taxation, and increased revenues.

But its greatest benefit will be in the abolition of involuntary poverty and the rise of a new civilization. It is not fair to the reader of a definition to urge this larger conclusion, the knowledge of which can come only from a fuller investigation and the dawning upon his apprehension of the light of the new vision. But this conclusion follows as certainly as do the various steps of reasoning which we have endeavored to keep before the reader in this purely elementary definition.

Mother Earth, Boom-Bust, Free Trade, Dogs-in-the-Manger (landlordism), and widely-spread Prosperity

THE EARTH OUR MOTHER

Man is a land animal as much as a fish is a water animal. Not only does man live on land but all of his wants are supplied by or from land. The earth is, literally, his mother. He will perish quickly if he has not access to the breast of his earth mother and will suffer and squall and become panicky if he has not free access to earth's breast and cannot obtain sufficient nutriment. His relation to land is fundamental and can be broken or disturbed only at great peril and loss to him and to society.

Production and consumption will always be in equilibrium and commerce and exchange will always flow smoothly, if all men at all times have equal and free access to nature's storehouse of wealth and if there are no dams -- tariff, -- etc. to interfere with the exchange of products. Free land and free trade are therefore, essential to economic justice; to give all an equal opportunity to produce goods and to exchange them without paying toll to anyone. When goods are produced and exchanged freely, it is reasonably certain that production and consumption will run so closely together that there can be no serious panics or long periods of depression. Serious maladjustment can and will occur only when production and exchange are interfered with and to the extent that they are interfered with.

The private ownership of land, that is, the taking of economic or land rent by private land owners, or landlords, most seriously interferes with some men's access to mother earth. Landlords are not only dogs in the manger; they are a class and about the only class, except the tariff beneficiaries, that consume without producing; that do not give a quid pro quo for what they get.

The capitalist supplies capital and is entitled to the interest that he gets. The laborer --wage, salary or fee earner -- produces goods or gives services and is entitled to what he gets in exchange. The landlord produces neither the land nor the land rent and is not, therefore, entitled to the rent that he takes. He is the only one who takes out of the economic pot without putting something into it. He is the only one who can and does live off the labor of others. He is the greatest of all economic leeches.

Professor Thorold Rogers said, in 1870:

"Every permanent improvement of the soil, every railroad and road, every bettering of the general condition of society, every facility given for production, every stimulus supplied to consumption, raises rent. The landowner sleeps, but thrives. He alone, among all the recipients in the distribution of products, owes everything to the labor of others, contributes nothing of his own. He inherits part of the fruits of present industry, and has appropriated the lion's share of accumulated intelligence."

If, as in ordinary times, the landlord takes only a moderate rent, that is, charges only the actual rental value of land to the capitalist and laborer who use land, production and consumption proceed normally, for society has fairly well adjusted itself to this unjust system. In times of great prosperity -- so-called -- when there is great speculation in land values and they rise rapidly, the landlords can and do take even more than the normal rental value of land; that is, more rent than is produced by society. Access to land then becomes so difficult and the prices that producers have to charge for food, clothing and shelter become so high that consumers are unable, after paying excessive rent, to purchase all of the goods produced. Hence, the glut in the market; the decline in the prices of commodities; the collapse of the over-extended credits; business failures; closed mills; idle labor and low wages. The business depression does not end until land values have declined to or below normal for the population. Soon thereafter business begins to revive, mills to open, unemployment to decrease, wages to advance and prosperity to return. Industry will continue on the up-grade until rents again become excessive. Most, if not all, periods of prosperity end with real estate booms. Even our present war prosperity will probably continue until there is a boom in city, farm, forest and mine land values.

The Single Tax Year Book (1917)

The Land Questions: #22 -- Infrastructure and Land Values

22.  The creation of a new subway line raises the land values near each of the stations.  Who should reap the benefit?

A. People who own homes there

B. People who own businesses there

C. People who own land there, whether or not there is a highest-and-best-use building on it

D. Corporations who own land there

E. Universities and other private landholders who own land there

F. Foreign corporations and private equity funds who own land there

G. Pension funds and sovereign wealth funds who own land there

H. The community as a whole, since the community paid for it

 

Download Fred Harrison's book, "Wheels of Fortune"

A 1938 NYT Letter to the Editor: Collecting Ground Rent

I came across this rather good letter to the editor, from 1938.  (Trinity Church Corporation, a major landlord in downtown Manhattan, was the subject of a NYT article this past week, as well as the subject of a major series in the NYT in December, 1894):

1938-09-03 Letters to The Times

Collecting Ground Rent
Single-Tax System Regarded as No Detriment to Building

TO THE EDITOR OF THE NEW YORK TIMES:

Fabian Franklin, in his letter to THE TIMES discussing the demolition of John D. Rockefeller's Harlem tenements in order to save taxes, writes:

"That objection is simply that virtual abolition of land ownership, which the single-tax plan is designed to effect, would make the building of houses in a city an extra-hazardous business, because, under the single-tax regime, in the great majority of cases the investment would result in a disastrous loss to the owner of the building.  I was neither blaming nor praising Mr. Rockefeller for the demolition of Harlem tenements."

What is the so-called single-tax system?  It is the collection by the government, through the taxing officials, of the entire economic or ground rent of land and the repeal of all taxes on buildings and other products of labor and capital.  That ground rent is estimated to be 9% of the capital value of the land.  New York City is now collecting one-third of this ground rent.  The market value of the lots is the remaining two-thirds, capitalized.  Dr. Franklin's thesis is that if the entire ground rent is collected no one would erect buildings, because "in the great majority of cases the investment would result in a disastrous loss to the owner of the building."

Some of the finest buildings in New York City are erected on leased land and the lessee pays the ground rent 100% besides a tax on the building.  There are hundreds of buildings erected by lessees of lots owned by Trinity Church, Astor estate, Rhinelander estate, Sailors Snug Harbor and others.  The lessees must pay all the taxes, both on land and building, amounting to 3% of the assessed value of both, and to the landlord 6% of the market value of the land.

Thus the entire ground rent is paid by the lessee, but only one-third to the government representing the people who made that value by their presence and activities, the remaining two-thirds to the landlord.  Notwithstanding that they are thus obliged to pay 100% of the economic rent, bankers and business men erect buildings costing millions.  Under the Henry George plan they would have to pay less, for the taxes on these costly structures will have been repealed.

Perhaps if Mr. Rockefeller had not been obliged to pay taxes on the buildings he might not have pulled them down; or, if he had, would have erected better buildings in their place in order to get a return on his investment in buildings.  The ones who will benefit most from the adoption of the Georgian philosophy are the owners of humble homes.  The average small homeowner's house is assessed for at least twice the assessed value of the lot.  If the house is relieved from taxation and the lot taxed the entire ground rent, his tax will be less than it is now.  The difference will be made up from vacant lots and lots that are worth more than the improvements.

After all, the building of houses is like any other business.  The builder takes the risk of lessened demand because of changes in fashion, obsolescence, competition.  It is estimated that 95% of new businesses ultimately fail. With the adoption, however, of the philosophy of Henry George, commonly called the single tax, failures in the housing and other businesses will be much fewer.  This is because neither houses nor goods nor anything else will be taxed.  The collection of the entire ground rent will not lessen the area of the surface of the earth one inch.  On the contrary, it will open to occupation and use land that is now held for speculation purposes. 

The taxation of any product of labor and capital will add the amount of the tax to the price, lessen demand and thus curtail production.  The result is unemployment and misery.

Frederic Cyrus Leubuscher
Essex Fells, N. J., Aug. 31, 1938

The Land Questions: #8 -- Natural Resource Royalties

8. The corporations which pump oil from beneath federal lands are paying low royalties into the federal treasury, despite the fact that the price of oil has risen significantly since their royalties were set.  Should their royalties be raised?

A. No.  A deal is a deal, and those corporations made their business plans in good faith.  The spoils belong to them.  They can sell those rights to whomever they choose to, at whatever price they can get, for the benefit of their shareholders and their management.

B. Yes.   All persons have equal rights to the gifts of nature.

C. Yes.  The resource is finite, and the oil companies don't create it.

D. Yes. We can now see that we will be running out of oil, and the price is rising, for reasons that have nothing to do with the oil companies.

E. your suggestions?

How to Bring The Cost of Housing Back within Reach of All American Families (1978)

How to Bring The Cost of Housing Back within Reach of All American Families
C. Lowell Harriss, et al.
[A pamphlet published by the Robert Schalkenbach Foundation, 1978]

Introduction
by Dr. C. Lowell Harriss, Professor of Economics, Columbia University

1. Land Supply Constraints in the United States
Excerpt from the Final Report of the Task Force on Housing Costs, William J. White, Chairman

2. The High Price of Land
by P. I. Prentice, Chairman, National Council for Property Tax Reform

3. Modernize, Don't Abolish, the Property Tax
From a report by the Subcommittee on the City of the House Committee on Banking, Finance, and Urban Affairs of the U. S. House of Representatives, Rep. Henry S. Reuss, Wisconsin, Chairman
 

Introduction
by Dr. C. Lowell Harriss

The number of Americans who lack adequate housing is much too high.  While both opportunity and promise life in the long-established principle of providing satisfactory shelter for everyone, many are still not well housed.  Population grows, and the existing stock of housing grows older.  For years to come, much new construction, expansion, and modernization will be needed.

Rapidly rising costs, however, present formidable obstacles.  One of the heaviest costs is one which also rises most rapidly.  And it is the cost of something created not by sweat and thrift, but by nature.

It is land.

The rising prices paid for land itself must be distinguished from the portion of the price of a building site which represents cost of preparation for use.  The land elements alone go up and up in price.  But land price increases do not change the quantity of land in existence.  Here is a rising price which does not add to supply.

Land is different.

In these three articles on land value taxation, the first, "Land Supply Constraints in the United States," points out that the sharp rises in land prices result in part from man-made factors.  Arbitrary, artificial, and unconstructive restrictions on land supply boost prices and threaten our housing future.  New building will therefore be kept below levels which unfettered economic conditions would otherwise achieve.  But tax policy which would encourage use, rather than underuse and withholding of land can increase the effective supply.  Need more be said?

Yes.  And in the second selection, "The High Price of Land," Mr. Prentice says more.  He points to many avenues by which the harmful effects of restricted land supply spread through the economy.  Developers and builders, laborers, supplier, subcontractors, and others all suffer.  They have less work, operate under conditions of disadvantage, and receive poorer rewards because of essentially needless obstructions to the optimum use of land.  The full and true price of land includes burdens above and beyond the dollar prices of building lots.  We shoulder burdens of lost opportunity of many kinds.  They are largely hidden but indeed real.  The quality of too much new construction deteriorates instead of improving as an advancing society should expect.  And, to repeat, the tragedy is that the rising prices for land do not create an more surface on the earth.

What to do?  The third article, "Modernize, Don't Abolish, The Property Tax," points to the reform outlined generations ago but here presented in modern form: reduce the property tax burdens on structures and make up the revenue by higher tax rates on land value.

The benefits from relying more fully on taxation of land values, rather than taxation of buildings, would include greater pressure on landowners to put land to better use.  Withholding land -- which reduces the current effective supply -- would become more costly if land value taxes were higher.  Thus some land formerly held for speculation would be sold, and new building would be encouraged on the increased supply of land.

A careful study of probable results in Washington, D. C., showed, among other things, that taxes on present homeowners would generally fall.  But this result is not the one which most justifies support for reform.  More significant and constructive would be a combination of forces producing incentives for better land use.  Upgrading of housing in older urban centers would be expected.  Positive incentives at many points would contribute to improving America's housing.

read the rest of the pamphlet:

Wasserman: The Ethics of Land-Value Taxation

Two great quotes:

The historical fact that land values have been privately appropriated and that this practice has been sanctioned for many generations does not alter its inherent inequity: an ethical wrong is not converted into a right by the benediction of time or of social sufferance.

and

If the present generation becomes conscious of an old injustice, is it powerless to seek redress?  "New time" it has been said, "oft makes ancient good uncouth."

This was in a booklet published in the early 1960s.

 

The Ethics of Land-Value Taxation

Louis Wasserman, Ph. D.,
Professor of Philosophy and Government,
San Francisco State College

The question, briefly stated, is this: Should the owners of land whose rent and increments would be partially or wholly confiscated by a program of land-value taxation be compensated for their losses?

We are not bound here by what Henry George thought about the matter; nevertheless, there is probably no better position from which to launch our consideration.  The answer given by the father of the Single Tax was clear and explicit: No, the landowners should not receive compensation.

Why not?  Since George made so much of social justice -- asserting it as the basis of his whole scheme -- upon what grounds could he justify the confiscation of landed wealth?  The answer is implicit in the very essence of his social analysis.  Let us turn to his argument.

What, George asks, is the moral basis of property -- any kind of property?  And he replies that this basis is to be found in the use of a man's powers to produce something of value; once he has done so, the product is henceforth his to use, to dispose of, to exchange into any tangible or intangible form.  The right to property, then, is the right to the fruit of one's labor.

But this, he continues, is precisely not the situation with regard to landed property.  The raw land is not produced by any man's labor: it was there before the advent of man, it is the bounty of nature to all men in common, and it is literally the foundation upon which they exert their labors.  And just as the raw land is created by nature, so the value it acquires as real property is due to society as a whole -- to the growth of the community with its services, its needs, and its uses.  As community-created value, then, the rental and increment derived from the natural land ought to be appropriated by the community at large and used for public purposes.

Just as a man, then, has the full right to the products of his own labor -- say a house he has built or has purchased with his earnings -- so no individual has the right to the land itself, which he has had no hand in creating and whose value is due to the aggregate of community efforts rather than to that of any single person within it.  The historical fact that land values have been privately appropriated and that this practice has been sanctioned for many generations does not alter its inherent inequity: an ethical wrong is not converted into a right by the benediction of time or of social sufferance.

This, in brief, is the rationale of Henry George's appeal for the socialization of land values.  It is couched in terms of natural rights, and its fundamental premise is the labor theory of property, viz., that the only true source of private property, its ethical justification, rests in the labor by which it was produced, whatever direct or indirect form it takes.

That there are practical weaknesses in this view is, of course, apparent.  The labor theory of property has been shelved, since the nineteenth century, in favor of more complex and sophisticated analyses of wealth production, and it can no longer be accepted as a self-evident proposition.  Moreover, the theory of natural rights upon which it rests -- although stubbornly recurrent in Western thought -- enjoys at present only a limited vogue among moderns; there is too much disagreement on specifics and, no matter what its form, such a concept is regarded as too rigid for social purposes.

Nevertheless, if we are to seek for an ethical justification for private property it is unlikely that we can find anything better than the labor theory.  It is no argument against the ethical rightness of that theory that it has been historically superseded by another, or that it is insufficient to account for the complexity of the productive process, or that the division of labor has made unintelligible the product of any individual worker.  No matter how greatly production has become socialized or in what manner its rewards have come to be partitioned, the irreducible element remains that of individual labor, the contribution of the hand or brain of each producer to the material and equipment at hand.  It is not enough for a theory of property simply to describe its character and distribution; there must be an explanation to account for the phenomenon and some social ethical criterion to justify it.  I am aware of no ethical theory, ancient or modern, religious or secular, which would deny explicit or implicit approval to the labor theory of property.

But perhaps it will be argued against any such ethical contention that private property is simply what a society has caused it to be, and that since a society is the sole source of its own ethics, the matter ends there.  What then, it may be asked, is used to justify the institution: force, fraud, custom, tradition?  Each of these may have its weighty explanation, but what can be said of its ethical sanction?  At worst, that it has been imposed, willy-nilly; and, at best, that it represents a social arrangement sanctified by age, legality, and expectation.  But the history of property, as idea, usage, and institution, is so heterogeneous among so many cultures of the past and present that the term itself can be taken to mean only that which current convention decrees it to mean.  Perhaps, then, property may be best conceived, to use the phrase of Walton Hamilton, as "a conditional equity in the valuables of the community."

If -- setting aside the natural rights theory -- the ethical test of land-ownership and increment is taken to be a matter of social convention or utility, the whole issue is, of course, thrown open for social evaluation by each generation.

The present condition is that most of the usable raw land in the United States is held privately; it has been obtained by purchase, gift, or inheritance; it enriches its owners by way of direct use, rental income, or profitable sale; the community siphons off part of this income in the form of an annual property tax or, when the land is sold at a profit, by a capital gains tax.

Now, the most extreme land-value tax proposal provides that this levy upon the rental value of the raw land be increased gradually until it approximates the full rental income; at the same time, tax levies on personal property, improvements, and as many other taxes as possible would be abolished.

What ethical considerations are involved in this proposal?  If we are to reject any "higher law" criteria, such as that of Henry George, we must revert to the test of "social utility" or some restatement thereof.  How are the ethics of social utility to be tested in our society?  The answer is quite simple: Social approval of any established practice is expressed by sheer inertia or by the rejection of proposed change; the reform of any established practice is engineered by the majority through democratic procedures.  To put it starkly, the ethical judgment with respect to any social change is transformed into a political decision.

We are all, of course, familiar with the democratic political process, but it is worth recapitulation to see how a social consensus may be reached on such an issue as land-value taxation.  We start with the theoretical foundations of popular sovereignty and government by consent of the governed.  The working machinery includes representative bodies, public-interest groups, freedom of expression, and the media of communication employed to shape public opinion.  Since every tax proposal is a matter of public policy, it must necessarily be discussed and legislated by the appropriate public body -- i.e., the state legislature, county board of supervisors, city council, or the like.  Sober attention must be paid in all such cases to the variety of interests, needs, motives, preferences, and other relevant factors in the affected community in order to shape a policy which attains its purpose and yet does not alienate too seriously any important segment of the population.  The final result, as registered in the legislative chamber or at the polls, is what we come to accept as public policy.

It would be too harsh a judgment to infer from the foregoing description of the democratic process that the sheer weight of numbers over-rides all consideration of private preferences.  What happens instead is that personal convictions, individual ethics, and material interests are mingled and measured and tested against each other in the give-and-take of public controversy; the result is a kind of rough-hewn, but acceptable, consensus which alone can make a community viable.  It is this broad consensus -- the specified or implicit assumption that the policy to be enacted is a contribution to the common welfare -- which defines the realm of social ethics in public policy making.

Nor is this political approach to be regarded cynically or derided as unworthy of decent folk.  The social ethic of American society is tightly bound to the prescriptions of our prevailing Judeo-Christian and democratic-humanistic traditions, and we may draw from that source as much in the form of ideal moral principles as we are humanly able to practice.  If we cannot agree upon common aims, we are at least the inheritors of a tradition of fair play as to means; and if the nature of justice is a matter of great dispute among us, we are still guided by what Edmond Cahn describes as the "sense of injustice" -- that is, a consciousness of wrongdoing and the commitment to abstain therefrom.

The social ethic of a democratic society is continually being created and revised through public dialogue, political action, and law.  It is necessary only to mention such illustrations as our attitudes regarding crime and punishment, treatment of our Negro population, the status of labor unions, sex information and birth control, the training of children, the prerogatives of women, and indeed the ameliorative role of taxation, to have us realize its progressively changing character.  Through the use of the democratic process the social ethic emerges as a sort of mean between the extremes of private ideals and private irresponsibility.  And it is worthy of mention that not infrequently the law itself nudges us into forms of behavior more ethical than we would exercise if left to our own dispositions.

Now, taxation policy inherently affects the general welfare of a community; and the social ethics of our society have for a long time recognized a distinction (despite certain weaknesses in definition) between earned and unearned incomes.  Taxing policies in the form of differential rates and other incentives have been used here and in many other countries deliberately to foster, or to discourage, certain social-economic developments.  A strong case can be made, in general, for taxation as a social instrument.

There was a time when the income tax did not exist at all in this country; then it was voted in, first as law, later as a constitutional amendment.  At its present steeply progressive rates, the income tax may "confiscate" up to 91 percent of excessively high earnings.  But, whatever the rate applicable, it is levied predominantly upon wages, salaries, and other forms of productive enterprise.  Would an increased tax upon the socially created value of the natural land be less equitable or less lacking in ethical propriety?

I am, accordingly, unable to find any ethical barrier -- either of higher law principles or of social utility -- raised against the proposal to recapture more fully the rental income and increased increment of the land.  There is, indeed, a strong rationale in its favor, especially since it would lead to the reduction of more burdensome taxes.  The problem is one of social engineering; it is a decision to be reached solely upon its merits in the political realm.

That there is now, and will be, strenuous opposition to such a program is of course only too clearly evident.  Without assuming the mantle of righteousness in prejudging the conduct of others, I would nevertheless venture to say that the main difficulties in enacting land-value taxation will stem principally from the following groups.  First, and most importantly, opposition will come from those who derive their incomes wholly or primarily from landholdings and from speculative profits thereon.  No argument concerning indirect, long-range benefits to them and others would suffice to soften their antagonism unless they stood to gain equally from a lightening of other taxes.  Then there is the large group whose simple inertia would inhibit any such contentious reform in taxation policy.  It is difficult to enlighten and energize this inert portion of any community unless the immediate benefits are made clearly, directly, and concretely self-evident to them.  For this group there is no sharp sensitivity to the ethics of land-value taxation, pro or con.  Finally, there are those in every community who have no vested interest in the change one way or the other but whose notions of propriety, of ethics, of the right to profit-making, or of general antipathy to government and reform would lead them to reject such a proposal on what are essentially ideological grounds.

If the result at the ballot box is to approve a measure to increase the tax rate on land values, it could not be denied that the social ethics had thus been expressed in a democratic manner.  Similarly, if the tax increase is defeated (as has been true most often in the past), it would properly imply that the social ethics of the community did not then sanction such a proposal.

But we have so far left untouched the critical issue with which we began this discussion: that is, whether compensation should be paid to landowners whose rental incomes or increments are seriously impaired or expropriated as a consequence of the increased tax.  Even if it be granted that land values ought, ab initio, to have been recaptured in full by the community for public revenue, the fact remains that they were not.  And upon this practice of private ownership and appropriation there has been reared an institutional complex long approved and sanctioned by law.  The present owners of land, it may be assumed, received or purchased their land in good faith and contractual expectations, often with capital acquired through alternative income channels.  Are they, then, to be penalized for an ancient wrong -- if wrong it was -- which has been sanctified by the common usage of earlier generations?

But the counterquestion to this is even more cogent: If the present generation becomes conscious of an old injustice, is it powerless to seek redress?  "New time" it has been said, "oft makes ancient good uncouth." 

The answer, in practical terms, is to be found in the equity which can be extended to those who suffer most from social-political innovations.  This is a matter to be determined by a commission of inquiry into the effects of the legislation; it should be in the minds of the legislators who draft the reform proposal; the nature of the equity to be granted will depend upon the provisions of the tax measure; and it will be affected by the give-and-take of the political process in which opposing groups make themselves heard.

Every public policy confers differential advantages and disadvantages upon those who are touched by its provisions.  A decent respect for equity in the present matter, then, requires that the proponents of land-value taxation exercise their utmost ingenuity and technical skill -- not to provide direct compensation as such, but rather to devise fiscal and administrative measures to cushion the shock and to ameliorate the condition of those who stand to lose most severely by the action contemplated.

I do not make this suggestion in a spirit of vague and wishful penance for what is not certain, in practice, to be realized.  Rather, I would recall to us all the wide range of creative and imaginative variations already proposed or practiced in fiscal policies and their administration, through which provision might be made without penalty to the community, for economic equivalents, direct or indirect, to landowners adversely affected by proposed land-value taxation.

The adoption of such provisions, I believe, would not only satisfy our social conscience but would do much to make land-value taxation politically possible.

 

Gavin Putland: All the way with Hazlitt - as far as he goes -

from Gavin Putland:
All the way with Hazlitt - as far as he goes - On Line Opinion - 25/1/2012.

The reader of a book review will rightly want to know the ideology of the reviewer. Very well: being of Georgist persuasion, I divide the "means of production" into two categories: those that can be produced or reproduced by competitors, and those that can't. On the former category, I'm as far Right as you can get, believing that such assets should be privately owned and exempt from tax, to encourage capital formation.

That may explain my mostly sympathetic reaction to a book much admired by advocates of free markets and small government: Economics in One Lesson (1946; revised 1978) by Henry Hazlitt (1894-1993). ...

... How should the offending taxes be replaced?

That brings us to the other category of "means of production" -- assets that can't be produced or reproduced by competitors. Georgists contend that the market values of such assets, being publicly created, are the proper source of public revenue. The most important example is land, whose value can be tapped by means of rates, "land tax" and "capital gains" tax.

Hazlitt doesn't have "land" in the index.

In three places in the text (ss. 11.4, 15.2 and 16.2), he lists the factors of production as land, labour and capital, but doesn't distinguish between them for purposes of argument. In s.16.2 he also mentions the "poorest land", "least competent farmers" (labour) and "poorest equipment" (capital), but again doesn't distinguish further.

Similarly in the chapter on credit, he doesn't care whether borrowed funds are spent on farms (land) or tractors (capital).

In s.15.2 he adds that for an economy in "equilibrium", these factors are limited "at any moment", thus glossing over the fact that the supply of capital can build up or decay. Although Hazlitt is usually said to be of the Austrian school, this snapshot view of "equilibrium" is neoclassical, not Austrian; it was pioneered by J.B. Clark for the purpose of making capital look like land, so that land could be called a form of capital. Hazlitt includes Clark in his recommended reading list.

Earlier (s.6.2), Hazlitt cites the "limited" supply of capital as an argument against government-guaranteed home mortgages, claiming that they cause "oversupply of houses as compared with other things" -- not that they pump up land prices.

But he mentions the need for capital accumulation elsewhere, especially in the chapter on saving, where his examples of "capital" include schools, colleges, churches, libraries, hospitals, private homes, and "the most wonderfully equipped factory", all of which include land components. This conflation of capital and land is neoclassical.

In contrast, Austrian economists emphasize that capital, unlike land, must be constantly renewed, that its life cycle may be long or short, and that loose monetary policy causes overinvestment in long-life capital, whose value then collapses, contributing to recessions.

Meanwhile Georgists notice that recessions follow bursting "property bubbles", which are really land bubbles because land prices, unlike prices of buildings (prime examples of "long-life capital"), are not constrained by construction costs.

Hazlitt's failure to make these distinctions may explain why his explanation for depressions (s.23.5) is so vague: "the real causes, most of the time, are maladjustments within the wage-cost-price structure... At some point these maladjustments have removed the incentive to produce, or have made it actually impossible for production to continue... Not until these maladjustments are corrected can full production and employment be resumed." All clear now?

Those who call themselves free-traders too often fail to apply their own standards to trade within their own countries. Witness those misnamed "free trade agreements" in which each country promises to impose the other's monopolies on its own citizens.

Hazlitt falls into this error in chapter 4, where he considers an extra bridge between Easton and Weston and declares that "For every dollar that is spent on the bridge a dollar will be taken away from taxpayers." Not necessarily, because any such bridge will lower barriers to trade between Easton and Weston, especially the indispensable trade between employers and employees.

The benefit of the additional trade, net of any bridge tolls, will be shown in prices of access to locations served by the bridge -- in other words, land values. If the benefit exceeds the cost, it will be possible to cover the cost by clawing back a sufficient fraction of the uplift in land values, in which case the cost, although clawed back through the tax system, will not be "taken away from the taxpayers" but will be part of the new value created by the bridge.

The rest of that new value will be a net windfall to the property owners.

Hazlitt then turns to the Norris Dam (a New Deal project) and rubbishes the claim that "private capital could not have built it", because it was indeed built by private capital "expropriated in taxes... taken from people all over the country", causing the loss of "the private power plants, the private homes, the typewriters and television sets" that the expropriated funds might otherwise have bought. Thus the people of one district got richer at the expense of the rest of the country.

But it didn't have to be done that way. The earlier Don Pedro dam (completed 1923) was built by two Californian irrigation districts and financed entirely by local land-value taxes. The affected land owners were fiercely in favour of it because they knew the increase in their land values would outweigh the taxes. Even if the land-value taxes had been imposed by a higher level of government, the financing of the dam would still have been local, because only the local land values would have been affected by it. Private capital did not build it, because the uplift in land values that paid for it would not have occurred without it. Private agencies could not have organized it, because they would have had no way of tapping the uplifts in land values.

With an eye to current debates, I should conclude by praising Hazlitt for an insight that his latter-day admirers have ignored.

In explaining why "Taxes Discourage Production" (chapter 5), he says:

"When a corporation loses a hundred cents of every dollar it loses, and is permitted to keep only 52 cents of every dollar it gains, and when it cannot adequately offset its years of losses against its years of gains, its policies are affected." If individual investors "lose the whole dollar when they lose, but can keep only a fraction of it when they win," they are less likely to take risks.

The entire article is worth your time.

Mason Gaffney: An Alternative Reform

In the files I've been digging through, from the late 50s to the early 80s, I found an early draft of a fine paper by Mason Gaffney about California's Proposition 13, for presentation at an August, 1978 conference.  I dug around and found a published copy of that paper, and think it worth sharing here. Original title, "Tax Limitation: Proposition 13 and Its Alternatives"

I see that there continue to be people who see the stupidity of Proposition 13 -- see http://www.dailyrepublic.com/opinion/letters-editor/time-for-a-petition-against-proposition-13/ Perhaps they will find this of use.  Georgists recognize Prop 13 as the antithesis of logical and just taxation.

First, a few of my favorite paragraphs, which I hope will whet your appetite for the whole paper.  I won't attempt to provide the context (you can pick that up when you continue to the paper, below).

• "There is a deferment option for the elderly, bearing only 7% interest (which is about the annual rate of inflation). In California, as also in Oregon and British Columbia, hardly anyone takes advantage of this deferment option. This fact, it seems to me, rather calls the bluff of those who so freely allege that the woods are full of widows with insoluble cash-flow problems, widows who are losing their houses to the sheriff and whose heirs presumptive, will not help keep the property, which they will eventually inherit."

You can read more about the Poor Widow by clicking on the "widow's skirts" link at left, in the tag cloud, and by reading Bill Batt's Property Tax Relief Measures: Answers to the "Poor Widow " Argument (or the pdf version)

• We hear a lot these days about cutting the fat out of the public sector; but there is fat in the private sector too. I interpret "fat" to mean paying someone for doing nothing, or for doing nothing useful. Most economists agree that payments to people. for holding title to land is nonfunctional income, since the land was created by nature, secured by the nation's armed forces, improved by public spending, and enhanced by the progress of society. "Economic rent" is the economist's term, but in Jarvis-talk we may call it the fat of the land or "land-fat." It has also been called unearned increment, unjust enrichment, and other unflattering names. Howard Jarvis has said that the policeman or fireman who risks his life protecting the property of others has his "nose in the public trough." But it has seemed to generations of economists that the owner whose land rises in value because public spending builds an 8-lane freeway from, let us say, Anaheim to Riverside, and carries water from the Feather River to San Diego, is the first to have his nose in the trough. Nineteenth-century English economists who worked this out were more decorous. They said things like "landlords grow rich in their sleep" (John Stuart Mill), or the value of land is a "public value" (Alfred Marshall) because the public, not the owner, gives it value.
  
  Some 43% of the value of taxable real estate in California is land value. When we lower the property tax we are untaxing not only buildings, but also land-fat.

• The ownership of property is highly concentrated, much more so than the receipt of income. Economists in recent years are increasingly saying that the property tax is, after all, progressive because the base is so concentrated, and because so little of it can be shifted. But this message has not yet reached many traditional political action groups who continue to repeat the old refrains. Two remedies are in order.

• One is to collect and publish data on the concentration of ownership of real estate. The facts are simply overwhelming and need only to be disseminated.
• The second remedy is to note how strikingly little of the Proposition 13 dividend is being passed on to renters. This corroborates the belief of economists that the property tax rests mainly on the property owner where it originally falls, and not on the renter.

• A high percentage of real property is owned from out of state and even out of the country. The percentage is much higher than we may think. It is not just Japanese banks and the Arabs in Beverly Hills. It is corporate-held property which comprises almost half the real estate tax base. If we assume that California's share of the stockholders equals California's share of the national population, then 90% of this property is absentee-owned; the percentage may be higher because many of these, after all, are multinational corporations with multinational ownership.

• No one seems to have seized on the fact that half the taxable property in California is owned by people not voting in the state. Senator Russell Long has suggested the following principle of taxation: "Don't tax you, don't tax me, tax that man behind the tree."  Property tax advocates have done well in the past and should do well again in the future when they make their slogan: "Don't tax you, don't tax me, tax that unregistered absentee. Don't tax your voters, they'll retaliate; tax those stiffs from out of state." Chauvinism and localism can be ugly and counterproductive, as we know; but here is one instance where they may be harnessed to help create a more healthy society.  The purpose of democracy is to represent the electorate, not the absentee who stands between the resident and the resources of his homeland.
  
  California's legislative analyst, William Hamm, estimates that over 50% of the value of taxable property in California is absentee-owned. This is such a bold, bare, and enormous fact it is hard to believe that Californians will long resist the urge to levy taxes on all this foreign wealth. They may be put off by the argument that they need to attract outside capital, but that carries no weight when considering the large percentage of this property which is land value.

• Property income is generally more beneficial to the receiver than is the same income from wages or salaries, because the property owner does not have to work for it.

• Property, particularly land, has been bought and sold for years on the understanding that it was encumbered with peculiar social obligations. These are, in effect, part of our social contract. They compensate those who have been left out. Black activists have laid great stress in recent years on the importance of getting a few people into medical and other professional schools. Does it not make more sense that the landless black people should have, through the property tax, the benefit of some equity in the nation's land from which their ancestors were excluded while others were cornering the supply?
  
  A popular theme these last few years is that property owners should pay only for services to property, narrowly construed. Who, then, is to pay for welfare — the cripples? Who is to pay for schooling — the children? Who should sacrifice for the blacks — Allan Bakke? Who should finance our national defense — unpaid conscripts? The concept that one privileged group of takers can exempt itself from the giving obligations of life denies that we are a society at all.

Here is, perhaps, my favorite:

• We can ask that a single standard be applied to owners troubled by higher taxes and to tenants troubled by higher rents. When widow A is in tax trouble, it is time to turn to hearts and flowers, forebode darkly, curse oppressive government, and demand tax relief. When widow B has trouble with escalating rents, that touches a different button. You have to be realistic about welfare bums who play on your sympathy so they can tie up valuable property. You have to pay the bank, after all. A man will grit his teeth and do what he must: garnishee her welfare check. If that is too little, give notice. Finally, you can call the sheriff and go to the beach until it's over. That's what we pay taxes for. Welfare is their problem.
  
  Anyway, widow B is not being forced out of her own house, like widow A and so many like her. Jarvis said that taxes are forcing three million Californians from their homes this year. But in truth, while evictions of tenants are frequent, sheriff's sales of homes are rare. Those who do sell ("because of taxes," they say, as well as all their other circumstances) usually cash out handsomely, which is, after all, why their taxes had gone up.

• Then there is the fruit tree anomaly. Under Proposition 13, a tree can only be assessed at its value when planted, with a 2% annual increment. The value of a seed thrown in the ground or even a sapling planted from nursery stock is so small compared with the mature tree that this is virtual exemption. This anomaly rather graphically illustrates how Proposition 13 automatically favors any appreciating property over depreciating property. The greatest gain here goes, of course, to appreciating land.

• Finally, build no surpluses. Surpluses attract raiders and raiders are often organized landowners. "Property never sleeps," said the jurist Sir William Blackstone. "One eye is always open." Even though the surplus was built up by taxing income, Howard Jarvis made it seem the most righteous thing in the world that it should be distributed to property owners. He was geared up for this because his landlord patrons kept him constantly in the field.

• Economists of many generations even before Adam Smith and continuing to the present — have preached on the advantages of land as a tax base. Let me enumerate a few of those.

•  
  • A tax on land value is the only tax known to man which is both progressive and favorable to incentives. One can wax lyrical only about a tax that combines these two properties, because the conflict between progressivity and incentives has baffled tax practitioners for centuries, and still baffles them today.

•  
  • A land tax is progressive because the ownership of the base is highly concentrated, much more so than income and even more so than the ownership of machines and improvements.

•  
  • Also, the tax on land values cannot be shifted to the consumer. The tax stimulates effort and investment because it is a fixed charge based merely on the passage of time.

•  
  • It does not rise when people work harder or invest money in improvements. Think about this. It is remarkable. With the land tax, there is no conflict but only harmony between progressivity in taxation and incentives to work and invest. In one stroke it solves one of the central divisive conflicts of all time.

The land tax does that because it cuts only the fat, not the muscle. It takes from the taxpayer only "economic rent," only the income he gets for doing nothing. If people could grasp this one overriding idea, then the whole sterile, counterproductive, endless impasse between conservatives who favor incentives and liberals who favor welfare would be resolved in a trice, and we could get on to higher things.

The final paragraphs speak directly to us in 2012.  34 years have passed since this was written.

• Summing up, Walter Rybeck, an administrative assistant for Congressman Henry Reuss of Wisconsin, and head of the League for Urban Land Conservation, has sagely suggested that we distinguish two functions of business: wealth-creating and resource-holding.   A good tax system will not make people pay for creating wealth but simply for holding resources.  Most taxes wait on a "taxable event" — they shoot anything that moves, while sparing those who just sit still on their resources.
  
  If we really want to revive the work ethic and put the United States back on its feet, we had better take steps to change the effect of taxes on incentives. Legislatures have got in the habit of acting as though persons with energy and talent, and with character for self-denial, should be punished, as if guilty of some crime against humanity. We cannot study the tax laws without inferring that Congress regards giving and receiving employment to be some kind of social evil, like liquor and tobacco, to be taxed and discouraged by all means not inconsistent with the rights of property. Little wonder the natives are getting restless. If we tax people for holding resources rather than creating wealth and serving each others' needs, we will be taking a giant step toward a good and healthy society.

 If your appetite is whetted by these excerpts, you can read the entire article below:

"It was there for the taking"

When the structures that our laws and traditions create provide opportunities for someone to capture a windfall, should we blame the fellow who "takes advantage" of those structures, or should we respond by studying and correcting those structures and laws?

Winston Churchill, in his speeches under the baanner "The People's Rights," in 1909, said this:

I hope you will understand that when I speak of the land monopolist I am dealing more with the process than with the individual landowner. I have no wish to hold any class up to public disapprobation. I do not think that the man who makes money by unearned increment in land is morally a worse man than anyone else who gathers his profit where he finds it in this hard world under the law and according to common usage. It is not the individual I attack, it is the system. It is not the man who is bad, it is the law which is bad. It is not the man who is blameworthy for doing what the law allows and what other men do; it is the State which would be blameworthy were it not to endeavour to reform the law and correct the practice. We do not want to punish the landlord. We want to alter the law.

The 99% need to start identifying the laws and structures that must be adjusted.  This is not easy work.

What individuals produce, and corporations produce, should not be "there for the taking" -- be it by corporate management in the form of hugely generous compensation packages and golden parachutes, or by simply saying "these resources are OURS, not everyone's" or by establishing monopolies or duopolies or other such structures.  We-the-people need to educate ourselves about how things are done now, who benefits from that, and what alternatives exist.  It won't be easy.  We'll be challenging special interests who somehow think they're entitled to their advantaged positions, and the rest of us exist to keep them comfortable.

Labor should get its share, and capital should get its share, and we-the-people should get land's share.  That last could fund a large portion of our common spending, on infrastructure and services, and permit us to reduce or eliminate the dumb taxes which take which individuals and corporations legitimately create.  That "keeping what we create" extends, also, to "externalities," to being responsible for the pollution we create, and setting up incentives so that it is minimized, for the good of all of us now here and the good of future generations.

I think it is quite possible, even likely, that a few years after we've made this shift in who gets what, we'll find that we don't need nearly so robust a social safety net, and that we-the-people may get some of "land's share" back in the form of a Citizen's Dividend, just as all permanent residents of Alaska receive an annual dividend from the Alaska Permanent Fund. 

In any case, letting some corporations and some individuals grab that which we all create together is just plain wrong.  Letting it be "there for the taking" is insanity and injustice.  And don't we pledge "liberty and justice for all?"

Our ancestors may have granted some privileges to some lucky folks for one reason or another.  That doesn't mean that we can't, politely and firmly, revoke those privileges.  A couple of centuries is plenty.  Experience has shown us that those privileges don't serve the greater good, and it is time to revoke them.  Will the privileged give up those privileges graciously?  Quite possibly not.  But the first step is to identify them, and then to seek to change the system so that those rightly-common assets aren't "there for the taking."

Franklin Hichborn: The Single Tax -- with a good graphic

I came across this in the San Jose Letter, from late 1895.   Over the course of the year of issues online (about 430 pages), there were just a few articles specifically about the Single Tax.  But I continue to be amazed at how much of the popular literature of the 1890-1920 period has as its context the assumption that the reader knew of and was generally comfortable with the ideas of Henry George.  They were in the air people breathed, well-known to all!  What I find interesting, as a long-ago American Studies major, is that a 21st century reader who isn't familiar with George's ideas, reading that literature, would miss out on most of the conversation -- and perhaps never notice the gap!

The graphic [woodcut, or "cut"] is definitely a keeper.  It explains a lot of things.  Location, location, location. This political cartoon covers it pretty well.  (See also a recent video here.)  While it isn't signed, it makes me think of J. W. Bengough's cartoons, which appeared in The Single Tax Review for a number of years in the first decade of the 20th century.  Bengough was also the author of the wonderful Up-to-Date Primer: A First Book of Lessons for Little Political Economists.

I'm assuming that Franklin Hichborn, editor of The San Jose Letter, wrote this piece, inspired in part by the woodcut in the SF Star.  The comparison of the 4 lots might be compared to Louis F. Post's lecture notes, at http://wealthandwant.com/docs/Post_Lectures.htm, starting at Chart 28.

The island analogy is prominent at http://www.wealthandwant.com/.  Check out "Robinson Crusoe" and "new country" in the "themes."

 

THE SINGLE TAX.

Through the courtesy of James H. Barry, publisher of the San Francisco Star, we are enabled to publish the cut accompanying this article, which gives, as the Star expresses it, the "Single Tax in a nut shell." In the near future a series of articles on Single Tax will be published in the Letter, which, besides stating clearly what the Single Tax is, will give, which will be more important, what the Single Tax is not. The confusion among the people on this very simple subject, is due in the main, I fancy, to their misunderstanding of the term rent. It is proposed to show what rent is, and, by it, what is meant by the Single Tax.

Any old farmer knows, and common sense will tell the inexperienced, that in a 10 acre field, more grain can be raised by planting a bushel of seed than a quart, more by plowing the land and harrowing, than by omitting the plowing, more by having the field fenced than by allowing cattle to run over it. In a word it pays to expend a certain amount of labor and capital upon our 10 acres. But it will be just as readily recognized that the thing can be over done, that the field can be plowed so much that the last plowing does not pay, that more seed can be sown that will be justified by the returns. There is, than a point in the culivation of our field where a given amount of seed and a given amount of plowing will yield the best returns, a point beyond which it will not pay the farmer to go, where the return will begin to be deminished in proportion to the outlay. In a word, a point of deminishing returns.

Now, suppose a community to be living on an island which has no communications with the outer world. Suppose the food of the community to be, in the final count, wheat, and suppose our island to have four grades of land, one producing at the point of diminishing returns 30 bushels to the acre, one 28, one 26 and one 24.  Here is our land:

30 bushels to the acre	28 bushels to the acre
26 bushels to the acre	24 bushels to the acre

So long as the 30-bushel land will supply the wants of the people there will be no rent on our island.  If the 30 bushel tract is owned by ten people they will compete with each other for tenants until practically nothing is paid for the use of the land. 

But when the population of our island increases to such an extent, (and by the way, it is bound to increase so long as there is free land) that the 30 bushel land will not supply the wants of the inhabitants, the 28 bushel land must be cultivated. The 30 bushel land is then in demand, for those cultivating it will, with the same outlay of labor and capital, get 2 bushels to the acre more than the 28 bushel land, and the ten owners may and will charge all they can get for its use. This will be two bushels of wheat a year or the difference between the yield of the two tracts. These two bushels will be rent.

When the combined 30 and 28-bushel tracts fail, owing to the steadily increasing population, to supply the island with wheat, the 26-bushel land must be cultivated. The owners of the 30-bushel tract will be able to get 4 bushels a year rent, the owners of the 28-bushel tract 2 bushels. When increasing population brings the 24-bushel tract into cultivation, 6, 4, 2 bushels will be charged, plus the amount which the necessities of the people, enable the owners of the 24-bushel land to charge them.

This, then, is the way rent originates. Dr. Walker defines it: The remuneration received by the land-owning class for the use of the native and indestructible powers of the soil, or, as it might be expressed, for the use of natural agents.

Our wheat producing island presents the doctrine of rent in its simplest possible form. "Land and natural agents" includes the arable, pasture and timber lands, mineral deposits, water privileges and building sites. When one piece of land becomes valuably [sic] for any reason, to a community, the person enjoying its advantages can give, and still be able to compete with his neighbor occupying land less favorable situated, the difference between the productiveness of the two tracts — rent. Who should receive this difference? Our present system says individual land-lords. Henry George says the people. He would collect this rent from land holders. This would be sufficient to meet all the requirements of national, state and municipal governments. It would be a single tax.