Henry George’s Single Tax
by James Kiefer

... Henry George, author of Progress and Poverty, argued that, while some forms of wealth are produced by human activity, and are rightly the property of the producers (or those who have obtained them by voluntary exchange from the previous owners), land and natural resources are bestowed by God on the human race, and that every one of the N inhabitants of the earth has a claim to 1/Nth of the coal beds, 1/Nth of the oil wells, 1/Nth of the mines, and 1/Nth of the fertile soil. God wills a society where everyone may sit in peace under his own vine and his own fig tree. The Law of Moses undertook to implement this by making the ownership of land hereditary, with a man's land divided among his sons (or, in the absence of sons, his daughters), and prohibiting the permanent sale of land. (See Leviticus 25:13-17,23.) The most a man might do with his land is sell the use of it until the next Jubilee year, when all debts were cancelled and all land returned to its hereditary owner.

Henry George’s proposed implementation is to tax all land at about 99.99 percent of its rental value, leaving the owner of record enough to cover his bookkeeping expenses. The resulting revenues would be divided equally among the natural owners of the land, viz., the people of the country, with everyone receiving a dividend check regularly for the use of his share of the earth (here I am anticipating what I think George would have suggested if he had written in the 1990s rather than the 1870s).

This procedure would have the effect of making the sale price of a piece of land, not including the price of buildings and other improvements on it, practically zero. The cost of being a landholder would be, not the original sale price, but the tax, equivalent to rent. A man who chose to hold his “fair share,” or 1/Nth of all the land, would pay a land tax about equal to his dividend check, and so would break even. By 1/Nth of the land is meant land with a value equal to 1/Nth of the value of all the land in the country. Naturally, an acre in the business district of a great city would be worth as much as many square miles in the open country. Some would prefer to hold more than 1/Nth of the land and pay for the privilege. Some would prefer to hold less land, or no land at all, and get a small annual check representing the dividend on their inheritance from their father Adam.

Note that, at least for the able-bodied, this solves the problem of poverty at a stroke. If the total land and total labor of the world are enough to feed and clothe the existing population, then 1/Nth of the land and 1/Nth of the labor are enough to feed and clothe 1/Nth of the population. A family of 4 occupying 4/Nths of the land (which is what their dividend checks will enable them to pay the tax on) will find that their labor applied to that land is enough to enable them to feed and clothe themselves. Of course, they may prefer to apply their labor elsewhere more profitably, but the situation from which we start is one in which everyone has his own plot of ground from which to wrest a living by the strength of his own back, and any deviation from this is the result of voluntary exchanges agreed to by the parties directly involved, who judge themselves to be better off as the result of the exchanges.

Some readers may think this a very radical proposal. In fact, it is extremely conservative, in the sense of being in agreement with historic ideas about land ownership as opposed to ownership of, say, tools or vehicles or gold or domestic animals or other movables. The laws of English-speaking countries uniformly distinguish between real property (land) and personal property (everything else). In this context, “real” is not the opposite of “imaginary.” It is a form of the word “royal,” and means that the ultimate owner of the land is the king, as symbol of the people. Note that the law does not recognize “landowners.” The term is “landholders.” The concept of eminent domain is that the landholder may be forced to surrender his landholdings to the government for a public purpose. Historically, eminent domain does not apply to property other than land, although complications arise when there are buildings on the land that is being seized.

I will mention in passing that the proposals of Henry George have attracted support from persons as diverse as Felix Morley, Aldous Huxley, Woodrow Wilson, Helen Keller, Winston Churchill, Leo Tolstoy, William F. Buckley Jr., and Sun Yat-sen.

The immediate concrete proposal favored by most Georgists today is that cities shall tax land within their boundaries at a higher rate than they tax buildings and other improvements on the land. (In case anyone is about to ask, “How can we possibly distinguish between the value of the land and the value of the buildings on it?” let me assure you that real estate assessors do it all the time. It is standard practice to make the two assessments separately, and a high fraction of land in the business district of a large city will be owned by a different person from the owner of the building on it.) Many cities have moved to a system of taxing the land more heavily than the buildings on it, and most have been pleased with the results, finding that landholders are more likely to use their land productively — to their own benefit and that of the public — if their taxes do not automatically go up when they improve their land by constructing or maintaining buildings on it.

Since I do not intend here to present a treatise on economics — merely to mention for those not already familiar with it an idea important in the history of Western thought — I will not elaborate, but refer the interested reader to George’s book and to the publications of the Lvt (Land Value Tax) Society. I repeat, this is not an argument for a political or economic proposal, but simply background material....

Editor’s Notes

Taken from James Kiefer, Biographical sketches of memorable Christians of the past.

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