The Single Tax, A Refutation

June 21st, 2012   Submitted by Wendy McElroy

I generally eschew question-and-answer as a format for presenting ideas but the choice I confront is to use this ‘easy’ structure or to delay the promised ‘refutation’ until next week due to deadline pressure. I chose ‘easy’. The following commentaries do not exhaust my objections to the Single Tax – far from it. But they provide a good indication of those objections and (hopefully) a springboard for productive discussion. The questions in bold face represent the Georgist position, followed by my ‘refutation.’

How can someone justify claiming property by the ‘right of first occupation’ when everyone else has a similar claim to the same property?

No system of land ownership is without difficulties, and I do not put forth the ‘mixing one’s labor’ standard as ideal. But every theory is meant to solve a problem and, so, the salient question becomes, “How well does this theory solve the problem compared to every other one?” In other words, all theories face difficulties in establishing the right of first ownership; which one offers the best solution?

I believe the ‘mixing of labor’ standard is superior. Everyone has the same and equal right to mix their labor with unoccupied land according to some reasonable standard that I believe would evolve in common law. Thus, a man could not claim a square mile of land because he planted a tree in the middle of it. Reasonable standards of land ownership would and have evolved under the free market through history, even when the freedoms were imperfect. (Similarly, Georgists believe a reasonable rate for and collection of the single tax would evolve.)

I do not deny that the second person to arrive at the same land is prevented from using it without the first’s consent. The situation is akin to a man gathering a basket of wild berries and sitting down to breakfast. A passer-by can go on a similar berry hunt but he cannot properly snatch the basket of picked berries from the man’s lap. Nor can the passer-by demand payment for the man’s breakfast. The ‘profit’ of the berry-breakfast belongs entirely to the one whose efforts secured the basket.

For me, the most extreme advantage of the ‘mixing labor’ standard is that land quickly becomes available on the open market; indeed, this form of pre-owned property soon dominates the marketplace. Georgists object that land is not created by people’s labor, by the use of their faculties. But property on the open market is an expression of people’s labor and faculties in that they exchange the result of their productive labor – currency, barter, etc. – for the property. In short, the ‘mixing labor’ standard quickly results in property ownership and value being determined by the free market and it becomes possible to write the state entirely out of the dynamics.

By contrast, Georgism cements a land-assessing, tax-collecting authority into the very concept of property and it does so in perpetuity. Even if you believe that a tax-collecting authority would not naturally expand or become corrupt, it remains perilously close if not identical to a State. The free market is the only vehicle that does not have force or privilege embedded in its core.

As a matter of principle, you cannot claim a right to something you do not own – land – simply because you mix it with something you do own – your labor.

If this is true, then it proves more than I believe Georgists wish to accept. If I can make no rightful claim to the riches of nature with which I must mix my labor in order to produce bread, clothing, shelter, and the other necessities of life then I can never claim to ‘own’ the loaf I am baking, the dress on my back, the chair in which I sit, the roof over my head. I am in possession of these goods only because I deprived others of their equal claim to the raw materials consumed in their production.

This means that the cane I whittle from a stick of wood found in a ditch is partially owned by my neighbor and everyone else on the globe because I have no rightful claim of ownership over the original wood. It is futile for the Georgist to point to the high degree of labor mixed with the wood or to the fact the wood had been abandoned because neither observation mitigates his principled argument that the natural resource was and is not mine. Why is it only land to which the Georgist applies his principles and not to sticks or wild berries? Why not make every person pay every other person for all goods that include a natural resource?–which is to say, all goods.

I suspect it is because the Georgist argument would reduce to absurdity if carried to its logical conclusion. When the consistent application of a principle results in absurdity, it is time to reconsider that principle.

The Georgist land system would also block incentives for people to improve themselves by their own efforts; at every turn, an industrious individual would owe positive duties rather than negative ones to the community at large. Actions to improve his life by plowing or whittling would automatically create positive obligations to profit other people which would go far beyond his obligation to merely refrain from using force against them. Even if the single tax were based on the desirability of the land rather than the productivity coaxed from it, that desirability is often a result of the improvements in soil, clearing, etc. that comes from one person’s labor.

In Free Life (1898) Auberon Herbert commented on the adverse impact of such a tax. “The community is entitled to all values arising from land…that are not due to labor. But…it would surpass the skill of men to disentangle these intermixed values. It could only be done by guess work of a very coarse kind. If the principle were just in itself, it would still be used as a mask for taking from others….All taking of so-called unearned increment would be a farce—and a very mean farce.”

Herbert then asks a key question – do Georgists advocate making good the losses that occur as well as profiting from the gains? “A site falls in value owing to the movement of population—will the believers in unearned increment compensate the owner?”

But the point remains that natural resources belong equally to everyone.

Again, I doubt that Georgists wish to follow this argument to its logically conclusion because it would necessitate impartially dividing the benefits of all land among all human beings. If one area of the world was gifted with rich soil and abundant water, then it would owe a debt to areas of barren sand and drought. Any line drawn to include some people in the rich area’s advantages while excluding others would violate the Georgists’ own principle that the earth equally belongs to all. Thus, a single tax that benefits a small portion of the global community reveals itself as being inherently and manifestly ‘unfair’. And, yet, a globally ‘fair’ distribution of value would be nigh well impossible to achieve; it cannot even be envisioned without a sprawling global authority that collects data, assesses and taxes far beyond what libertarian-style Georgists would tolerate. Like absurdity, the impossibility of implementing a principle should make you reconsider it.

Moreover, the idea that a ‘good’ properly belongs to everyone and, yet, cannot be owned by an individual makes no sense. If it is not proper for an individual to do X, then how can it be proper for 10 or 10,000,000 individuals to do X? In this regard, Georgism denies methodological individualism on which so much of libertarianism is based. As Tucker wrote regarding paying a single tax to a ‘society’ or a ‘community’, “‘[T]he community’ is a non-entity that…has no existence, and is simply a combination of individuals having no prerogatives beyond those of the individuals themselves. This combination of individuals has not better title to the land than any single individual outside it.”(Liberty, 1888) Tucker concluded, “land belong[s] not to the people but to the occupant and user.”(Liberty, 1894.)

The foregoing does not contest that social arrangements can and have existed based on “a commons” or collective ownership. But a society that respects the individual also acknowledges the right of individual ownership of natural resources based upon use and occupancy or upon purchase on the open market.

Justice requires there to be an authority to distribute the ‘unfair’ advantages enjoyed by those who use and occupy land.

I can give no better answer than that offered by Auberon Herbert (Free Life, 1898):

“Who is to decide whether it is to be prairie value or market value? Whether a land tax is to be permanent or be liable to increase? Who is to disentangle the share of nature and of human labour and skill? In the second place he has created for his purposes an official body with power to tax and to spend the taxes so imposed; but what reason has he to suppose that an official body–necessarily armed in this matter with absolute power–elected under the false system of a majority possessed of all rights and a minority possessed of no rights–will give a just and true interpretation to his dogma of ‘nature’s gifts the property of everybody’? Is there not an instructive light thrown upon the truth of his dogma by the fact that in order to arrive at a practical application of it he is obliged to perpetuate a large part of the very evils from which we are trying to escape–the absolute power of the majority–the power to take what amount they like and to spend it for such purposes as they like. If compulsory taxation is wrong in itself, how can you concede a land-tax, to be levied by the majority on the minority, without at the same time conceding all the evils and oppressions of compulsory taxation?”

Concluding Thought

Claiming a person owns his labor but not the material upon which it is expended is tantamount to denying the person’s ownership of his labor. Or, at the very least, to deny him the benefit of labor. With the exception of purely intellectual endeavor, work is always expended on something; a good is produced out of material that reduces to a natural resource. To say a worker owns the hands that fashion a wooden chair but he does not own the chair because he has no exclusive claim to that natural resource is to make a mockery or a semantic game of anyone ‘owning their labor’. Where is the advantage to owning your labor when you cannot control what it produces in order to feed yourself? Georgism is not merely a Single Tax but an assault upon the concept of ownership itself.

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330 Responses to “The Single Tax, A Refutation”

  1. Martin BrockNo Gravatar says:

    @dan sullivan

    That a mule is domesticated is irrelevant. A man feeding hay to a mule does not make the mule’s contribution to plowing a field. This man’s marginal contribution is distinct from the mule’s contribution. Another man plowing a field earlier to grow the hay makes another contribution, and the land he plows makes a contribution. If men with bails of hay plow fields, then I can leave a man with a bail of hay, and no mule, in a field and later find the field plowed, but I can’t. The mule’s contribution is distinct and has a distinct marginal value established by the interaction of forcible propriety with market forces.

    Of course, my mule is one less mule available to others, and my entitlement to the value of a mule’s contribution is a monopoly rent.  I may be properly entitled to the rent by virtue of raising the mule, but that’s a separate issue. We generally agree that parents are not entitled to 100% of the value of their children’s labor even if the parents contribute 100% of the children’s support during the children’s minority. A mule is not fundamentally different because it has a different genome, and a parcel of fertile land is not fundamentally different either.

    • Dan SullivanNo Gravatar says:

      Several things you do not get. First, a mule is not domesticated. They do not exist in the wild, period. Second, if you think there will be one less mule because you bought one, then you don’t understand the first thing about demand-driven production. Third, if the mule gives a return over and above the cost of the mule, and yet some farmers do not use mules, it implies an artificial shortage of mules. That shortage comes from the cost of land to support mule-breeding and a shortage of money that forces people to borrow at interest. Your statement that men cannot plow fields is false. The first plows were pulled by people, and using oxen and mules came later. It’s just more sensible to use a mule.

      If you think there is not a fundamental difference between owning a mule (or a tractor, to use a less anachronistic example) and owning a person or owning land, then so be it.

      • Martin BrockNo Gravatar says:

        The word “domesticated” has a common usage, and mules and other livestock are “domesticated” in this sense of the word.

        When I buy a particular mule, I monopolize this particular mule, and my monopolization of the mule is valuable to me, because a mule can plow better than I and the supply of mules is limited. The supply is not perfectly elastic. A new mule doesn’t appear every time someone demands one.

        The mule gives me a return above my cost of feeding and housing it; otherwise, I never buy it. Some farmers do not use mules, because comparative advantage makes another option more attractive to them.

        The supply of land is limited. The supply of fresh water is limited. The supply of seed for particular grains is limited. Many things are limited. Reducing all of these limitations to limited land makes no more sense than reducing them all to limited water or limited corn or limited gold.

        Money is not fundamentally limited. Money is an accounting device. States (and/or markets) limit money by commanding standards of propriety and accounting.

        Interest reflects the risks of extending credit among other things. Extending credit is inherently risky, so credit cannot exist without this interest. A mule can die before plowing enough to yield its price for example. If you lend money to buy mules, you had better account for this risk if you want a profitable business model.

        I never assert that men cannot plow fields. Men use mules to plow fields because of comparative advantage. A man for whom plowing with a mule is comparatively advantageous does not realize this advantage without the mule, and he can be poorer without the mule as a consequence. The extent to which he is poorer is the marginal value of the mule in his productive organization. He will pay this price for the mule over and above the cost of feeding and otherwise maintaining the mule. His cost of feeding the mule, including his labor, is not the mule’s marginal value. His labor and whatever he feeds the mule have their own marginal value.

        I never anywhere suggest that there is no difference between a mule and a person or a parcel of land. I say that all of these factors of production have a distinct marginal value. Taxing the marginal value of land does not tax the marginal value of everything else.

        • Dan SullivanNo Gravatar says:

          As you say, the supply of land is limited, and the supply of fresh water is limited. That is why there should be a charge for holding more than a per capita share of land and a charge for polluting water. However, it is not true that the supply of seedstock (or mules) is limited, except in a momentary kind of way, which renders the statement meaningless. It is largely beside the point that everything has a fixed quantity at any particular moment.

          The supply of money is also limited at any moment, and is artificially limited at the behest of banks. There is a proper supply, which is one that maintains stable prices and does not pressure anyone into subscribing themselves into debt or into accepting debt notes.

          Whether all things have marginal value is beside the point. Slaves have marginal value and so do tractors. Does that mean it’s moral to ride a slave because it’s moral to ride a tractor?

          • Martin BrockNo Gravatar says:

            Creating property in a new mule requires many moments, and it requires more than moments. It requires a horse and a donkey and food and water and pasture and stable and human labor, and it requires property in all of these things. All of these requirements contribute meaningfully to the marginal value of the mule, along with the subjective values of mule consumers.

            That things have indefinite quantity at indefinite times and places is beside my point. Your point apparently differs. That everything has a limited quantity at a particular time and place is not beside my point. The cost of moving things from place to place is very significant for example.

            Rather than a state taking a share of a proprietor’s profit and then distributing this share in “the public interest”, I want a proprietor’s neighbors empowered to limit his use of his land, i.e. I want a jury empowered to limit the proprietor’s personal consumption of his profit (including but not limited to the marginal value of land he holds), while leaving the proprietor free to reinvest any profit in more production or charitable works.

            A state may limit money by limiting credit, but any three proprietors of unleveraged property may create money (negotiable, promissory notes) at any time. The only “proper” supply of this money is the supply that free proprietors choose to create.

            I have no fundamental problem with inflation. If free people want to write ever higher prices on their goods, that’s no business of mine. I suppose free people will prefer stable prices and settle on appropriate standards of value accordingly, but I want no central monetary authority commanding price stability.

            Where slavery is legal, slaves have marginal value, and mules have marginal value similarly. This fact is not beside my point.

            Where slavery is not legal, a person’s labor still has marginal value, but each person is entitled to the value of his own labor.

            Land has marginal value, and where land is enclosed, a proprietor is entitled to the land’s value. You apparently want this value taxed away from the proprietor and somehow distributed “in the public interest” by a state. I don’t.

            I rather want a jury of the proprietor’s peers entitled to influence his use of the marginal value of the land by requiring him to reinvest this value rather than personally consume it.

            I’ve said nothing about the morality of slavery. I suppose we’re all libertarians here.

            • Dan SullivanNo Gravatar says:

              You seem to be conflating what is right with who decides what is right. You presume, despite my explicit statements to the contrary, that I would invest power in the state, while you would invest power in juries. That is just plain wrong, as I would invest power in juries as well, and would hope that juries have enough sense that they would want land or rent shared.

              I hope they would not try to interfere in the distribution of mules, because a person who shares land or shares rent if he holds more land value, should be free to sell the mules he raised as he sees fit. There is no reason, if rent is shared, why anyone who wants a mule would be deprived of a mule.

              Moreover, it seems to me that it is states, and not anarchic communities, that have privatized land and socialized the fruits of labor. If anyone has a right to presume the other’s proposal is statist, I have a right, supported by history, to make that presumption about your proposal. I cannot imagine a jury of reasonable people telling Smith what he must do with his mules, Jones what he must do with his chairs, and so on, but states to that kind of thing all the time.

              • Martin BrockNo Gravatar says:

                I’m not conflating what is right with anything, and I don’t know what you would do with tax revenue from a land value tax. I don’t know how juries are supposed to be controlling this revenue. You say something about juries selecting top officials, but top officials must be atop something, and I suppose they’re atop a state. I don’t know what these top officials are supposed to do with all of this tax revenue or why they wouldn’t just consume it themselves.

                • Dan SullivanNo Gravatar says:

                  There are lots of things you don’t know. Yet you don’t ask; you assume. If you did ask, or if you did read what I had already written, you would know that this revenue would be distributed on a per capita basis in the community, unless there were basic amenities that the people of the community wanted, such as roads, parks, and maybe a place where these juries could do their jobs.

                  • Martin BrockNo Gravatar says:

                    I don’t assume answers to the questions I asked. You channel all of this tax revenue through an authority charged with distributing it on a per capita basis to everyone subject to the state after first channeling a portion of the revenue toward basic amenities that people of the community want. How do the authorities know what basic amenities people of the community want?

                    If proprietors must reinvest, people of the community choose amenities they want in the market, and only proprietors satisfying demands of these people hold property profitably.

                    • Dan SullivanNo Gravatar says:

                      I’m really tired of explaining away the things you imagine me to have said.

                      It is false that the rent has to be channeled through a state authority. If you insist on assigning that position to me, show me where I said it. In an anarchist community, those with more land could compensate others directly.

                      Only where government already exists would other taxes be replaced with land value tax as a transitional device. That was the proposal of the great libertarian and voluntarist Karl Hess. As a first step, it would replace federal and state taxation with local land rents, but that is only because state and federal taxation already exists. Read my entry titled “The World Government Gambit” again, and go to the bottom, where you will see my explicit statement that no government is required at all.

                    • Martin BrockNo Gravatar says:

                      I don’t intend to tire you, Dan. You say something about juries picking top officials. I don’t know what you mean precisely.

                      To be clear, I am essentially a reformer of Rothbard’s state. My ideal state is Rothbard’s with a few additional constraints on proprietors, and I advocate reforming real states in this direction. Rothbard claimed to advocate no state, but I can’t take the claim seriously. He was a minarchist at heart.

            • Rick DiMareNo Gravatar says:

              “Land has marginal value, and where land is enclosed, a proprietor is entitled to the land’s value. You apparently want this value taxed away from the proprietor and somehow distributed ‘in the public interest’ by a state. I don’t.”

              Martin, assuming the proprietor is simply living on his/her enclosed land, and is not an employer, not exercising a corporate privilege, not exploiting resources, not wasting, not living on more land than s/he needs, etc., what should happen to the enclosed land after the proprietor’s death? Also, do you think there should be any land taxes at all for simply holding land (to control or prevent land speculation, monopolization or idle holding of land)?

              • Martin BrockNo Gravatar says:

                I don’t much favor taxes at all if “tax” describes a central authority over a large region collecting a portion of a proprietor’s produce and directing its distribution somehow.

                I prefer proprietors directing the distribution of their produce subject to constraints imposed by their friends and neighbors, people freely associating with them. Since friends and neighbors must respect a proprietor’s forcible mastery of particular resources, these constraints seem reasonable to me.

                Of course, some central authority must decide these constraints and how friends and neighbors may impose them, and I am this central authority myself in my way of thinking. I can hardly deny this fact.

                In the scenario you propose, I favor an auction of the deceased title. Anyone may bid. Anyone may extend credit to a bidder by leveraging other resources.

                If the deceased title holder prefers a particular follower in the title, he may prepare this person to hold the title. If he prepares a person effectively, this person obtains credit more easily than other bidders.

                This passage of title is much closer to the natural order in which a lion’s progeny claims his father’s territory only by winning a dominance contest. Nothing like hereditary title exists in nature. I don’t advocate literal battles of tooth and claw, of course. Avoiding these battles is the whole point of civilized propriety; however, I do advocate some sort of contest for deceased titles based upon the merit of would be title holders, rather than the will of a deceased title holder or primogenitor or something.

  2. How anarchists could be against the decentralization of land ownership escapes me. Low land tax means it gets monopolized and you have monarchy. The single tax on land is the physiocratic ideal, too, not just Henry George. Remember them? “L’Iaissez faire?”

  3. Henry LawNo Gravatar says:

    The entire concept of land ownership is predicated on the existence of a civil authority that will issue land titles and defend the owners’ rights to those titles, by protecting the realm, maintaining civil order and upholding the title holders’ rights in the courts.

    The notion of first occupation has not existed in most settled parts of the world for hundreds of years, so it is too abstract to be of practical value. Land which was previously considered to be terra nullius has been proved in the courts to be nothing of the kind eg aboriginal lands in Australia.

    As for the notion of land being brought onto the market by private ownership, most of Central London is owned by Lord Marchmain and has been for the past 350 years and more. How long is it necessary to wait? And why should anyone running a business in Central London have to pay a private tax to Lord Marchmain and then another to the government for the services that are necessary to keep the land in a usable condition?

  4. J. D. MarsdenNo Gravatar says:

    I have only briefly looked in here, in my quest to find out why George has fallen so completely out of favor in the last hundred years — from one of the three most famous people in the country, allegedly, to not getting even a passing reference (as far as I know) in contemporary writing on his field. It is tempting to think that the propertied classes, whose power George’s ideas targeted, arranged to silence him, but I hope to see a clear intellectual reason that his “single tax” idea has been largely discarded.

    Anyway, from a completely separate line of thinking, I have concluded that property rights are most accurately thought of as being completely negative: they do not allow the property owner to do anything he would not otherwise be able to do, except to forbid other people from making use of his property in ways that his rights give him the authority to do so: if I own the far side of the moon, I still am unable to do anything directly with it; but if I own the far side of the moon and someone else launches a rocket and lands there, I can legally require him to clear off. (And, property rights often tend to be specific as to use: in many places, one cannot prohibit people from walking across my property, but can prohibit them from hunting, collecting nuts, etc.)

    Viewed this way, I think the “single tax” at least immediately seems to make more sense: even if we acknowledge that Smith, by getting up early and picking most of the berries from a common berry patch, has a right to the berries he has picked, hasn’t he still made Jones more poor by transforming an area with berries ready to be picked into an area picked clean? It offends sensibilities to imagine that Jones should have a claim on Smith’s effort in picking the berries, but isn’t is also offensive to recognize and reward what was in effect Smith’s theft from the common good?

    • Dan SullivanNo Gravatar says:

      “…in my quest to find out why George has fallen so completely out of favor in the last hundred years… to not getting even a passing reference (as far as I know) in contemporary writing on his field”

      You’re kidding right? Not much of a quest if you believe that.

      Note the four Nobel economists on this list:

      http://en.wikisource.org/wiki/Open_letter_to_Mikhail_Gorbachev_%2 81990%29

      Then double that by adding Paul Samuelson, Milton Friedman, James Buchanan and Paul Stigitz.

      Then note the push to bring LVT to England, the 20 Pennsylvania cities that have made the shift in the past 20 years, the big push in Australia and so on. Of course Georgists are not funded by either state bureaucrats on the left or land monopolists like the Koch Brothers on the right.

      As to the rest of the post, it has already been answered on these two pages.

    • Rick DiMareNo Gravatar says:

      J.D. Marsden, just got email notification of your post today, but I’d like to place a little blame on U.S. law schools for letting Henry George slip off the map, so to speak.

      In law school, we were taught that only the 13th, 14th and 15th Amendments were considered to be the “Civil War Amendments.” However, the most important of them, and the one that would have brought Henry George into the picture, was the 16th Amendment, which finally allowed an income tax on rental income after an 1894 income tax was struck down as unconstitutional because taxes on land rent might have been a direct tax on land itself (which is unacceptable because the Constitution mandates special rules for direct taxes which only allows the federal government to assess direct taxes, but not collect them).

      • Dan SullivanNo Gravatar says:

        You are confused. Land value tax is not an income tax, but an ad valorum tax on land without regard to income. That is, idle land pays the same as the same value land that is rented out or being used. Also, Henry George opposed income taxes:

        “[I]t is evident that whatever savors of regulation and restriction is in itself bad, and should not be resorted to if any other mode of accomplishing the same end presents itself. For instance, to take one of the simplest and mildest of the class of measures I refer to – a graduated tax on incomes. The object at which it aims, the reduction or prevention of immense concentrations of wealth, is good; but this means involves the employment of a large number of officials clothed with inquisitorial powers; temptations to bribery, and perjury, and all other means of evasion, which beget a demoralization of opinion, and put a premium upon unscrupulousness and a tax upon conscience; and, finally, just in proportion as the tax accomplishes its effect, a lessening in the incentive to the accumulation of wealth, which is one of the strong forces of industrial progress.”

        - *Progress and Poverty*, Book 6, Chapter 1, “Insufficiency of Remedies Currently Advocated”

        • Rick DiMareNo Gravatar says:

          “Land value tax is not an income tax, but an ad valorum tax on land without regard to income.”

          Dan, land value tax is both: (1) a tax on income derived from property sources, as authorized by the 16th Amendment (1913), which is actually a Georgist amendment under which landlords, lenders, employers and speculators became Constitutionally taxable; and (2) a tax on the value of undeveloped, un-exploited land (which we don’t have yet, and should be assessed at the federal level).

          The “graduated tax on incomes” of which Henry George speaks in Book 6, Chapter 1 of *Progress and Poverty* (1879) ended in 1872, before George even wrote, and to add to the confusion, was declared Constitutional in Springer v. U.S. (1880), based on Springer’s 1865 income tax return, and when a similar income tax was attempted in 1894, was struck down as unconstitutional in Pollock v. Farmers’ Loan (1895), a decision which made it necessary to enact the 16th Amendment (16 years after George died) so that George’s income tax on landlords, lenders, speculators and employers could be Constitutional. (I even got a headache explaining this.)

          Also, George admits in the opening sentence of Book 6, Chapter 1 of *Progress and Poverty* that “this book will not permit an examination in detail of the methods in which it is proposed to mitigate or extirpate poverty by governmental regulation and accumulation . . . . ” This is a very wise and cautious statement because a major part “of the methods” were worked out after he died, and other parts still need to be worked out (i.e., the part about the need for a federal “use it or lose it” tax based solely on the land’s undeveloped, unexploited value.

          I know you’re trying your best to advance Henry George’s ideas, but trying to value land before it’s been exploited and developed is what opens Georgism up to criticism that it’s a socialist or communist doctrine.

          • Dan SullivanNo Gravatar says:

            Actually, the socialists and communists wanted income tax, and denounced George for opposing it, so your comments about George being criticized as being socialistic for opposing income tax couldn’t be more wrong.

            You also have no clue about assessing land value. It is not necessary that a particular plot has been exploited, but only that similar plots have been exploited, or have merely been exchanged for considerations. Indeed, the whole point of land value tax is to not punish people for putting their land to use, but to make unused and underused land available.

            http://www.henrygeorge.org/ted.htm

            • Rick DiMareNo Gravatar says:

              It’s true that the 2nd plank of the Communist Manifesto calls for “a heavy progressive or graduated income tax,” but as I’ve said till I’m blue in the face, in the U.S. there are two categories of income tax, those derived from property sources vs. those not (where “those not” usually means an income tax on those benefiting from corporate privilege or from legal tender privilege).

              The income tax authorized by the 16th Amendment (1913) was “Georgist” because it allowed taxes on income derived from property sources (which had been unconstitutional as of 1895), where the property *sources* are land, labor and capital, and the income derived from them are rental income, profits from hiring labor, and interest, dividend and capital gain income.

              The kind of income tax of which Henry George was suspect, and of which was suggested by the Communist Manifesto, was a general income tax on all income, and did not distinguish between income derived from property sources vs. those derived from government-granted legal tender and corporate privilege.

              • Dan SullivanNo Gravatar says:

                I’m sure you don’t have a citation for that, because George never said that. You have a long history of knowing what George was thinking while being wrong about what George actually said. He was very precise, and if he had criticisms about a particular income tax, he would have said so. Instead, he condemned income tax over and over:

                “The truth is that customs taxes, and improvement taxes, and income taxes, and taxes on business and occupations and on legacies and successions, are morally and economically no better than highway robbery or burglary, all the more disastrous and demoralizing because practised by the state.”

                - A Perplexed Philosopher

                The key element you seem to miss is that a tax on income only burdens the landowners who allow their land to be used. This creates an incentive to not allow land to be used, and withdrawing land from use drives up the cost of all other lands. In this way, a tax on income – even on income from land rents, is passed on to the user and is not at all what George was interested in.

                When George spoke of taxing rent, he was very clear that he meant the rental value that was imputed to a piece of land, whether that value was being realized by the landholder or not.

                To undertand this, you need to read Ricardo’s *Principles of Taxation.* In this work he exposes the error of Adam Smith, who had said a tax on rental income would not be passed on. Ricardo shows that, if only the land that is rented out pays the tax, it would indeed be passed on.

                Rick, I know how wedded you are to an income tax, but I have a problem with you ascribing such wishful interpretations to George.

                • Rick DiMareNo Gravatar says:

                  Dan, for now we’ll just have to continue to agree to disagree because I also have a problem with the way you confine your interpretation of Georgism to the 18 years between when George began to write (1879) to the year he died (1897), and then discounting or ignoring all the changes to income tax and monetary law that occurred 115+ years after he died.

                  • Dan SullivanNo Gravatar says:

                    I’ll leave it to you to decide what George believed after he died. That kind of thing seems to be your specialty.

                    However, the most prominent Georgist economists continued to oppose income tax. Frank Chodorov, president of the Henry George School for a good while, wrote the book, *Income Tax, Root of All Evil*.

                    The prominent Georgist economist Harry Gunnison Browne wrote that high income taxes reduce the incentive to do the things that generate income. This is clearly counterproductive.

                    “No such objection can be raised to the high taxation of land rent since such taxation is specifically intended TO BE INDEPENDENT OF THE USE TO WHICH ANY INDIVIDUAL CHOOSES TO MAKE OF HIS LAND.”

                    And of course, we got an income tax, precisely because superficially Georgist people made the argument you are making now. How did that turn out?

                    When you stray from principle for utility, the best you can hope for in the short run is expedience. In the long run, you always get disaster.

                    • Rick DiMareNo Gravatar says:

                      The kind of tax on land that you and Henry George wanted to see in the late 19th century could not happen because of the Constitution’s Direct Tax Clauses, which allows the federal government only to assess taxes on land, but prohibits it from actually collecting the tax, which is probably why state and local governments now levy most real estate taxes (though I agree that a federal “use it or lose it” tax exclusively on land is still needed today to free up more land held by investors and speculators).

                      But as far as taxes on the land’s rent or yield, we had to turn to income taxes because those are indirect taxes not subject to the state-collection requirement of the Direct Tax Clauses. However, the problem with income taxes is that the two great categories have been fused together in our minds, probably deliberately by the oligarchs. (This is because most businesses today should be paying 3 separate income taxes, but if they can convince us that there’s only one, and the 16th Amendment caused it, they can continue to get away with free government-granted privileges, mainly the corporate privilege and legal tender privilege.)

                      So, in other words, there’s a kind of income tax (already in place) that is really a major component of George’s land value tax, though it’s hard to tell, and again, it’s called “taxes on income derived from property sources,” where the property sources are land, labor and capital … and the income derived from them are rental income, profit from hiring labor, interest income, dividend income and capital gain income.

                      Here’s my Doc #59, where I briefly break down the 4 major income tax periods, so that hopefully taxes on income derived from property sources can begin to be distinguished from those derived from federal privilege: http://www.facebook.com/groups/CommonWealthTax/doc/36152060396108 9/

                      Also, here’s a good article by Cobb and Rowe “How the Income Tax Became a Tax on Labor” that explains how labor has been tricked into bearing the burden of income taxes: http://schalkenbach.org/rsf-1/on-line-library/works-by-other-auth ors/how-the-income-tax-became-a-tax-on-labor/

          • Henry LawNo Gravatar says:

            I have looked through your comments – I hate to have to say this but you seem to have a pretty fuzzy idea of both land economics and what George was proposing, and are consequently impervious to the comments made by myself and others. This is clear when you use potentially confusing terms like surplus value, unearned gain and unearned increment, without first defining them. Furthermore, anyone with a reasonably clear understanding of land economics would not use them at all.

            As for the US Constitution, the points you are making add up to a good case for not having out. It seems to contain some pretty strange provisions.

            • Rick DiMareNo Gravatar says:

              This is clear when you use potentially confusing terms like surplus value, unearned gain and unearned increment,

              Henry, by “surplus value” I mean profits that should be taxed as land rent after the following have been expensed: entrepreneurial wages, ordinary wages, depreciation on capital equipment and buildings, operating expenses, etc. The “surplus” or “profits” that remain are really land rents, displaced wages that cannot realistically be returned to labor, plus there is usually a return on monopoly privileges. Most mainstream Georgists forbid taxing profits, but that’s because they usually don’t fully expense the items I’ve listed above.

              By “unearned gain” I mean any gain that is not the result of wages or capital being applied to land.

              By “unearned increment” I mean the annual passive increase in land values due to increase in population, infrastructure improvements, public services, etc. So, for example, if I buy a vacant lot for $500,000 for investment purposes and after the first year it’s worth $530,000 I should pay a tax on the $30,000, which is land rent (with a final reconciliation happening when I sell the land or die).

  5. J. D. MarsdenNo Gravatar says:

    Actually, no, I am not kidding, but I’m very happy to have provided you with some amusement, however base it may have been. ;-)

    We have a lot of debate about taxation in the US — do you think I’m kidding about that? — but none of it ever, ever is about taxing land. In fact, if you look more broadly at property as opposed to just land, tax on it has fallen precipitously in the last 15 years: capital gains are taxed at half (or less) of regular income rates; dividends (which often include rents) are similarly taxed; etc.

    But, hey, a bunch of ivory tower economists suggested 22 years ago to an on-his-way-out Soviet leader that his country raise taxes from rents, and some 20 Pennsylvania cities (including my home town, by the way) have increased land taxes, and (I’m surprised you didn’t mention …) there’s a community still in existence in Alabama based on Georgian ideas, so obviously the man whose ideas dominated discussions of political economy a hundred years ago is still front and center today.

    Let me give you an example of the type of thing I’m looking for. F. A. Hayek’s essay, “On the Use of Information in Society” (or something like that) destroyed the notion that central planning could provide the basis for a viable economic system. Has there been something like THAT with regard to George’s “single tax” idea? I mean, outside the confines of these two pages?

    (Have I been too snarky here? No, I do not think so: one good snark deserves another.)

    • Dan SullivanNo Gravatar says:

      To everyone except the neolibertarian right, “planning” means something more than levying a tax on value. Yet I often hear neolibertarians equate land value tax with central planning, a term they resort to for its insult value, along with other ephitets, like Keynsianism, statism, socialism, etc. These terms have much narrower meanings to everyone else.

      In any case, there is no central planning involved in land value tax. This is the market value of the land. Pay that, and do what you want.

      • J. D. MarsdenNo Gravatar says:

        Thanks for the link to the 20 year old letter, by the way, Dan. I’ll give that a closer look when time permits.

  6. J. D. MarsdenNo Gravatar says:

    Since Dan Sullivan suggested that Georgian ideas have been refuted in these two pages, let me indicate why I think that is not so.

    On this page, where Wendy McElroy purports to refute (albeit through a method she does not like, and with time constraints) Georgianism, she commits the logical fallacy of the “slippery slope” argument: a tax on land taken to its extreme is a tax on everything, which is absurd; therefore a tax on land is an untenable idea.

    Considering that right now almost ALL tax revenues in the US are derived from taxes on production, how does it make sense to argue against taxing a cane that someone has whittled because that would in part be a tax on his productive effort? If we accept that something that exists is bad, is not getting rid of part of it generally preferable to leaving it as it is? Is not half a loaf better than none? Is not, in fact, a single damn slice of bread better than none?

  7. Dan SullivanNo Gravatar says:

    “Since Dan Sullivan suggested that Georgian ideas have been refuted in these two pages, let me indicate why I think that is not so.”

    No, I said that your objections had already been raised and refuted. The rest of this last reply is a bit incoherent. I don’t know that cane whittling had been brought up before, or what you are talking about.

  8. Dan SullivanNo Gravatar says:

    “The kind of tax on land that you and Henry George wanted to see in the late 19th century could not happen because of the Constitution’s Direct Tax Clauses.”

    - Rick DiMare

    Nonsense. The kind of tax Henry George ADVOCATED actually did occur in Pittsburgh in 1913. There was also a great shift to real estate taxes in between the 1890s and 1910, which were much closer to land value tax than income tax is.

    The disaster was that some Georgists were duped by the line of argument that presents here. Ricardo had proved, and George had agreed, that a tax only on rental income that is *realized* is a tax on land use, and falls on the user.

    Had some Georgists not been duped by the lure of federal glory, and had continued to campaign at state and local levels, we probably would not have an income tax or a strong central government.

    • Rick DiMareNo Gravatar says:

      I was talking about direct land value taxes at the federal level. The 50 states and the city/town subdivisions are free to tax however they want according to their constitutions.

      Also, taxes on rental income derived from land (a property source) do not fall on users, but on landlords. If the user/tenant works the land as a sole proprietor he simply pays the agreed upon rent expense to the landlord and, after paying other expenses, is allowed to keep what’s left over as his/her wages. If the user/tenant employs the labor of others to work the land, he pays the agreed upon rent expense to the landlord, wages to himself and the workers, other expenses, then pays an income tax on the profit from hiring labor (a property source), then keeps the rest.

      • Dan SullivanNo Gravatar says:

        It’s basic economics, Rick. The tax is passed on to tenants because some landlords will not bother to rent out land for less money, and that decreases the supply, allowing other landlords to raise rents. Only if all land is taxed, whether or not it generates income, will the tax be borne by the landlord.

        Read Ricardo’s *Principles of Taxation*, particularly the section on rent and the law of rent.

        • Rick DiMareNo Gravatar says:

          I’ve already agreed with you that we need a “use it or lose it” tax on land value to discourage landlords from keeping land out of use. The land value (income) tax I’ve been talking about is a another component of the same tax, like for example, royalties on top of a LVT might be. Our only difference seems to be that you’re trying to get the job accomplished as a single tax, which I’m saying can’t reasonably happen after 115+ years of income tax evolution in the U.S.

          • Dan SullivanNo Gravatar says:

            No income tax permitted under the nostrums you propose will fall on land that generates no income. If you are advocating a land value tax by pretending it is an income tax, such a pretense will simply not work.

            However, this has nothing to do with McEvoy’s objections or any other objections, and is really rather off-topic for this web page. It is a tendentious legalistic argument that interests you and nobody else.

            • Rick DiMareNo Gravatar says:

              Read Chodorov’s “The Income Tax, Root of all Evil,” which reflects a terribly inaccurate portrayal of the 16th Amendment: http://mises.org/etexts/rootofevil.asp

              All the works by Harry Gunnison Browne were gated, and couldn’t find anything substantive about McEvoy.

              If you can provide links to relevant documents on income taxation and the 16th Amendment by Brown and McEvoy, I’ll take a look at them.

  9. RickNo Gravatar says:

    Not only legalistic but legal. That’s the point.

  10. NickNo Gravatar says:

    Nice answers in return of this difficulty with real arguments and
    telling everything concerning that.

  11. KerstinNo Gravatar says:

    Good day, cool web site you’ve going here.

  12. RosalinaNo Gravatar says:

    Thanks for sharing your info. I really appreciate your efforts and I will be waiting for your next post thanks once again.

  13. HoseaNo Gravatar says:

    Wonderful website you have here but I was wanting to know if you knew
    of any discussion boards that cover the same topics discussed
    here? I’d really love to be a part of online community where I can get suggestions
    from other knowledgeable individuals that share the same interest.
    If you have any recommendations, please let me know.
    Thanks!

    • Dan SullivanNo Gravatar says:

      Here is a Facebook page:

      https://www.facebook.com/groups/Geolibertarian/

      There is also a Yahoo group, but it isn’t very active.

    • George H. SmithNo Gravatar says:

      I discuss Henry George, Herbert Spencer, and the land question here: http://www.libertarianism.org/publications/essays/excursions/herb ert-spencer-henry-george-land-question-part-1

      This is the first of 5 parts. The general discussion is continued in a series that immediately follows Part 5.

      Ghs

    • Rick DiMareNo Gravatar says:

      George H. Smith’s 5-part series on Henry George and Hebert Spencer is excellent.

      For a more legalistic approach, I have the Facebook group “Common Wealth Tax:” https://www.facebook.com/groups/CommonWealthTax/

      Some groups tend to advocate a land value tax that characterize Henry George as a communist who wanted to nationalize land, which I think is unfair, even though he did occasionally say things like “make all land common” or “abolish private ownership of land.”

      A more accurate view is to recognize George’s profound impact on U.S. income tax law evolution, beginning with Pollock v. Farmers’ Loan (1895), and to understand him as advocating a split in legal title to land, which is available under trust law theory, where the state holds “legal title,” and the landowner holds “equitable title” with rights (not privileges) of exclusive possession.

      • Dan SullivanNo Gravatar says:

        George Smith’s essay is reasonable, although I disagree with parts of it.

        Rick DiMare is an income taxer in land taxer’s clothing, and his claims are generally rejected by both land-taxing libertarians and libertarians generally. But, if you like income tax, you will love DiMare’s group.

    • John KindleyNo Gravatar says:

      Lol. You guys got taken in by a spam commenter, spamming an old post with a link to an advertisement. I assure you “Hosea” has no interest in Georgism, and when he posted his comment probably had no idea what the post he was commenting on was even about.

      • Rick DiMareNo Gravatar says:

        That’s okay, John. Whatever gets me and Dan Sullivan to butt heads is a good thing.

        Dan doesn’t realize that certain income taxes *are* taxes on land gains, such as the capital gains tax, which is often really a land gains tax. We just need to figure a way to extend this tax so that it also applies to unrealized or imputed land gains.

        Henry George was not always clear, but was always after the unearned gains from land, and did not intend to tax land ownership itself.

        There’s a big difference between taxing land as property (because of ownership), which is a tax directly ON land vs. taxing unearned incremental land values and/or profits from land exploitation, which are “income derived FROM land.” (See language of 16th Amendment, which authorizes taxes ON incomes derived FROM property sources.)

        • Henry LawNo Gravatar says:

          The unearned gain from land is the whole of its present rental value, which is what Henry George noted. Land rental values are sustained by the presence and actions of the community now. Land price is the capitalisation of the expected future rental income stream, ie the annual rental value rolled up into a capital sum, with a bit of hope value on top.

          The taxation on profits on the sale of land was not what Henry George proposed and is a very bad thing, as it gums up the land market and leads to misallocation of resources.

          • Rick DiMareNo Gravatar says:

            “The unearned gain from land is the whole of its present rental value, . . . ”

            But John you can’t tax land’s “present rental value” without also levying a direct tax on land ownership itself, and thereby trespassing on the landowner’s rights of exclusive possession.

            I presume what you mean is that an assessor determines what s/he thinks the land parcel should rent for, and then taxes the landowner based on that assessment.

            Stated differently, the landowner has rights to peacefully enjoy the benefits of exclusive possession, and the state only has rights over unearned increments or profits. If you don’t allow the landowner rights (again, not mere privileges) over exclusive possession, you are basically advocating that the state should own all land, and then lease it out to us peons.

            • Henry LawNo Gravatar says:

              A landowner’s right of exclusive possession derives entirely from the grant of land title from the state. It is not an automatic right under natural law. The right of possession through holding of a land title is upheld by the state through its legal institutions, and more widely, through the defence of the realm, and by the community at large through its respect of those rights. A tax on land ownership as such is entirely just, unlike taxes on wages, which are nothing more than legalised theft of what really is private property, since the worker is entitled to the full fruits of his labour – a principle which does have a basis in natural law. Land is the product of no man’s labour since it is a gift of God, or nature if you do not like the idea of God.

              • Rick DiMareNo Gravatar says:

                Henry, I couldn’t agree more that wages should be treated as private property by law, but regarding land, the right to exclusively possess land does not “derive entirely from the grant of land title from the state.” That’s the point I’m trying to make, i.e., that certain relationships with land, such as simply living or working on it, create a RIGHT to exclusively possess. The state plays a role as trustee, but that only gives the state a duty to maintain land title systems, land courts, enforce boundaries, etc. The state has no rights over possession of the land, only a responsibility as trustee to act for the good of the beneficiary/landowner. Stated in terms of trust law theory, the state is trustee who holds “legal title” with “fiduciary duties” for the beneficiaries who hold “equitable title.”

                Land exploiters even have certain rights of exclusive possession, but no rights to unearned land gains, profits from land exploitation, or profits derived from privilege or monopoly.

                • Henry LawNo Gravatar says:

                  No rights exist unless corresponding duties are observed. Your right to walk unmolested down the street exists because everyone else observes the DUTY not to molest you.

                  With land, your “right” to occupy depends on everyone else observing the duty to allow you exclusive occupation. Since exclusive occupation of land confers the advantage of enjoying the rental income stream from that land, it seems not unreasonable to return the benefit of that advantage to the community from which it comes.

                  As regards the fruits of working on the land, that is one form in which the wages of labour arise. What is constructed or planted on land belongs to whoever put it there and the community indeed has no claim on it.

                  I don’t know why US commentators are always complaining about assessors. I assume that it is either because US assessors are not very good or the assessments are made on selling prices, which are notoriously difficult to determine. Go over to the British annual rental value system and the problem is solved. Rental values can easily be cross-checked these days on web sites like Zoopla and Mouseprice.

                  • Rick DiMareNo Gravatar says:

                    “Since exclusive occupation of land confers the advantage of enjoying the rental income stream from that land, it seems not unreasonable to return the benefit of that advantage to the community from which it comes.”

                    That was the point of Pollock v. Farmers Loan (1895), i.e., to stop the British tax law notion that the rental income stream from land belonged to the landlord, and that taxing this income stream (which Dan wants to ignore because its not a direct property tax on land) effected a direct tax on the landlord’s land. Georgists, and people in general, have not yet grasped the significance of this case, nor the influence that Henry George and his followers had on the case.

                    As Mason Gaffney reported in his new book, Georgists were able to include a tax on landlord rental income in the 1894 income tax law, which is why the Supreme Court struck down this income tax as unconstitutional. If they hadn’t done this, the Pollock decision would not have been necessary and that vital distinction between taxing land directly vs. taxing land gains indirectly (as indirect income taxes) would never have been made.

                    In the following short essay “Doc #88: The Three (Taxable) Georgist Land Rents” the income stream you mentioned falls within the second category, profits/yields from land (as distinct from land gains in the form of unearned increments or derived from privilege). https://www.facebook.com/notes/common-wealth-tax/doc-88-the-three -taxable-georgist-land-rents/511757452270736

  14. Henry LawNo Gravatar says:

    The income stream from land ie its rental, is an unearned income, unearned gain, or whatever you want to call it.

    What is the point you are trying to make? I know nothing about US Supreme Court decisions on this subject. They may not necessarily be in line with justice or morality.

  15. Henry LawNo Gravatar says:

    The essay is imagining a problem where none exists. Gains due to infrastructure improvements are automatically collected through the Georgist tax as rental values will rise – if, that is, the infrastructure is well conceived.

    Only one tax, on the rental value of land, is required. “Land” here means not just the surface of the earth and, possibly the sea bed, but also includes eg radio spectrum, mineral resources, and, possibly internet domain names.

    Whether it is also desirable to tax vice eg tobacco and alcohol, is another matter.

    • Rick DiMareNo Gravatar says:

      “Gains due to infrastructure improvements are automatically collected through the Georgist tax as rental values will rise – if, that is, the infrastructure is well conceived. Only one tax, on the rental value of land, is required.”

      Gains due to infrastructure improvements can also be collected by taxing the unearned increment in land market value. There is no need to estimate rental values and then tax them; we only need to tax annual unrealized land market increments so that these taxes on unrealized gains can work in conjunction with the now-existing realized capital (land) gains tax, which is an income tax.

      And then another income tax is needed to capture profits from land exploitation, and yet another if the exploiter is operating under privilege.

      So, no, it is impossible to capture all these land rents with “only one tax.” This may have been theoretically possible in Henry George’s mind when he wrote, but is in no way possible after 120 years of income tax evolution. This is likely a reason that George sometimes regretted the term “single tax,” and more recently Mason Gaffney has criticized the term:

      “The term ‘single tax’ has been unfortunate in helping to perpetuate a narrow fixation on property taxes; as a result, even advocates of land value taxation tend to underestimate the revenue potential from rents. Many lands and resources that yield rents are not observed or measured in traditional real estate markets. There is a new realization that ‘taxes on rent’ are much broader than the traditional land value tax.” Mason Gaffney, page 93, “The Mason Gaffney Reader: Essays on Solving the ‘Unsolvable’”

      • Henry LawNo Gravatar says:

        “Gains due to infrastructure improvements can also be collected by taxing the unearned increment in land market value. There is no need to estimate rental values and then tax them; we only need to tax annual unrealized land market increments so that these taxes on unrealized gains can work in conjunction with the now-existing realized capital (land) gains tax, which is an income tax.”

        This is an unnecessary complication and why would anyone want to do it? The PRICE of land is the capitalisation of that part of the rental income stream that is retained by the holder of the land title. If all of the land rental value is taken in tax, then the selling price of land is zero. Land titles would then change hands in the same way as leases are assigned – the assignee takes on the liability to pay the tax. If valuations are regular, eg in Sweden there is a rolling revaluation on a 3-year cycle, then increases in rental value due to infrastructure are picked up as a matter of routine and there is no increase in selling price.

        What rental values would not be observed in the real estate market? The traditional land value tax IS a tax on rent. For reasons which I do not understand, many US Georgists wrongly conceive land value tax as a tax on the PRICE of land titles. This is based on a misreading of George.

  16. Rick DiMareNo Gravatar says:

    “This is an unnecessary complication and why would anyone want to do it?”

    The U.S. Constitution forbids the federal levy and collection of direct taxes on property because of ownership (under the two Direct Tax Clauses).

    This is to prevent state ownership of land. Granted, those clauses supported the landed aristocracy for about a century after the Constitution was ratified, but Pollock v. Farmers’ Loan (1895) and the 16th Amendment (1913) changed that because they allow the taxation of land gains as indirect taxes, so in other words, the Direct Tax Clauses are not implicated when we want to tax income derived from land, i.e., land gains, either the unearned increment, or profits from land use, exploitation, harvesting, etc.

  17. Henry LawNo Gravatar says:

    If what you say is the case and not just your interpretation then the US needs an amendment to its constitution but I don’t suppose it is the only one, with lunatics being free to buy guns and kill dozens of people at one go, by Constitutional right, it would seem.

    There is a lot to be said for not having written constitutions.

    • Rick DiMareNo Gravatar says:

      These are the Direct Tax Clauses of the U.S. Constitution, and they ban federal officials from collecting taxes that are levied directly on property (“because of ownership” as the Supreme Court would say).

      “. . . direct Taxes shall be apportioned among the several States . . . according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons . . . .” Article 1, Section 2, Clause 3

      “No capitation, or other direct, Tax shall be laid, unless in Proportion to the Census . . . . ” Article 1, Section 9, Clause 4

      The typical response from American Georgists is: “So what? We can still levy direct taxes on property under most state constitutions.”

      • Rick DiMareNo Gravatar says:

        But the Direct Tax Clauses do not bar federal collection of taxes on incomes, which are all considered to be indirect taxes, i.e., they don’t tax property directly because of ownership, but only target land gains, and profits from land exploitation.

        Also, there is a second category income tax, besides the “property income tax” (on land gains) … and that is taxes on income derived from privilege, either corporate privilege or legal tender privilege. Again, as with the property income tax, this income tax is an indirect tax that does not directly tax property, but seeks a return for privilege, and income is just used to measure the benefit enjoyed by the privilege holder.

  18. Henry LawNo Gravatar says:

    Sorry I don’t know much about the US constitution, but if LVT is incompatible with it, then it is the constitution that is at fault. It does not refute LVT, properly understood and implemented.

    • Dan SullivanNo Gravatar says:

      Rick is just obsessed with income tax, and whether he misrepresents the Constitution or not, he constantly misrepresents Georgists. Neither Georgists nor libertarians support income tax, nor did George. This is what George wrote on this in Progress and Poverty:

      “As to the truths that are involved in socialistic ideas I shall have something to say hereafter; but it is evident that whatever savors of regulation and restriction is in itself bad, and should not be resorted to if any other mode of accomplishing the same end presents itself. For instance, to take one of the simplest and mildest of the class of measures I refer to — a graduated tax on incomes. The object at which it aims, the reduction or prevention of immense concentrations of wealth, is good; but this means involves the employment of a large number of officials clothed with inquisitorial powers; temptations to bribery, and perjury, and all other means of evasion, which beget a demoralization of opinion, and put a premium upon unscrupulousness and a tax upon conscience; and, finally, just in proportion as the tax accomplishes its effect, a lessening in the incentive to the accumulation of wealth, which is one of the strong forces of industrial progress. While, if the elaborate schemes for regulating everything and finding a place for everybody could be carried out, we should have a state of society resembling that of ancient Peru, or that which, to their eternal honor, the Jesuits instituted and so long maintained in Paraguay.

      “I will not say that such a state as this is not a better social state than that to which we now seem to be tending, for in ancient Peru, though production went on under the greatest disadvantages, from the want of iron and the domestic animals, yet there was no such thing as want, and the people went to their work with songs. But this it is unnecessary to discuss. Socialism in anything approaching such a form, modern society cannot successfully attempt. The only force that has ever proved competent for it — a strong and definite religious faith — is wanting and is daily growing less. We have passed out of the socialism of the tribal state, and cannot enter it again except by a retrogression that would involve anarchy and perhaps barbarism. Our governments, as is already plainly evident, would break down in the attempt. Instead of an intelligent award of duties and earnings, we should have a Roman distribution of Sicilian corn, and the demagogue would soon become the Imperator.”

      - *Progress and Poverty*, Book 6, chapter 1, “Insufficiency of Remedies Currently Advocated”

      • Rick DiMareNo Gravatar says:

        Dan, I agree with Henry George about the intrusiveness and high cost of levying the kind of income tax he’s talking about in your quotes, which is a legal tender privilege income tax (levied on the legal tender privilege conferred on bank notes not issued directly under Congress’s authority).

        However, the property income tax on land gains, the property income tax on land exploitation, and the income tax on corporate privilege are good things. And pro-Georgist, wouldn’t you say? And who cares if this kind of income tax is intrusive when levied on landlords, lenders, employers and speculators? They should be.

        • Henry LawNo Gravatar says:

          How can three separate taxes be better than one which does the same job? The tax on rental value means that there are no gains in land value which need to be taxed. “Corporate privilege” sounds too vague for any legislation to be drafted which would make it possible to tax it.

          • Rick DiMareNo Gravatar says:

            “The tax on rental value means that there are no gains in land value which need to be taxed.”

            It would not be possible for an assessor to determine in advance how each land exploiter will use a land parcel. We may be able to determine the annual unearned increment by assessing local land sales, and charge a special income tax on that unearned gain, but not the various ways and efficiencies with which people will exploit land.

            Also, exploiters who use a corporate privilege to exploit must pay an extra income tax or they’ll put everyone who doesn’t incorporate at an advantage. Under U.S. law, Flint v. Stone Tracy Co. (1911) authorizes a tax on corporate privilege (which is actually an excise tax, but with income being used to measure the benefit under the privilege): http://en.wikipedia.org/wiki/Flint_v._Stone_Tracy_Company

        • Dan SullivanNo Gravatar says:

          I care about intrusiveness on anyone.

          And your questions are dishonest because you know I have answered them many times and do not agree.

          A tax on income is not a tax on land, but a tax on revenue from putting land to use. That is, those who hold land out of use are not taxed. It causes more land to be held out of use and that causes the rents on remaining lands to be increased. That is why income tax is passed on to the users, and not paid by the landowners.

          Zero libertarians and very few Georgists support income tax, so you are barking up the wrong web page here.

          “What kind of taxation is least harmful? This is a topic still open for debate. My own preference is for a single tax on land. Is this “the” libertarian position on taxes? No. But all libertarians oppose any form of income tax.”

          http://laissez-fairerepublic.com/nolan.htm

  19. Rick DiMareNo Gravatar says:

    “A tax on income is not a tax on land, but a tax on revenue from putting land to use. That is, those who hold land out of use are not taxed.”

    You don’t understand income taxes if you think this. Taxes on the annual unearned incremental value in land, whether realized on sale of land, or imputed/unrealized on land being held for speculation, ARE income taxes, i.e., taxes on unearned gain. Why you would not want to tax these kind of gains, and still claim to be Georgist, doesn’t make sense. I think you just don’t like the word “income” or have some frozen view of it.

    • Henry LawNo Gravatar says:

      If those who are own land but are not using it are not taxed, then the incentive is to hold land out of use – when other people might be able to use that land. You have provided a perfect demonstration of why income taxes are a very bad idea indeed. And a tax on the rental value picks up any unearned gains due to externalities due to infrastructure improvements.

      The proposals you are putting forward are a complication with undesirable side-effects. What is the point of them? Do you actually know what the Georgist proposal actually is?

      • Rick DiMareNo Gravatar says:

        “If those who own land but are not using it are not taxed, then the incentive is to hold land out of use – when other people might be able to use that land. You have provided a perfect demonstration of why income taxes are a very bad idea indeed.”

        Henry this is not my view. Under my view, if the annual incremental value is sufficiently taxed, there is no incentive to buy land unless one is going to use it. There simply is no profit in holding land idle or for speculation. Presently, under the property income tax, we can tax land gains only when land is sold. (In the U.S. we call this taxing “realized gains.”) However, when the 3 income taxes are disambiguated, even the unrealized annual increment can be taxed, then a final reconciliation can occur when an actual arms-length land sale occurs. In any case, all the land rent is available to be taxed, even 100% of it. (But again, a separate property income tax is needed to capture land rent from exploitation and development.)

    • Dan SullivanNo Gravatar says:

      I have talked to accountants who have confirmed that not a dime of income tax is generated by land held out of use and not transferred. Land held out of use has no income, imputed or otherwise, unless you tax the potential rental value that is wasted by non-use. At that point, it becomes identical to land value tax, and also becomes just as unconstitutional.

      So, when you say, “You don’t understand income taxes if you think this,” I say nobody understands income taxes as you understand them, which suggests that you are horribly wrong.

      When you say, “Why you would not want to tax these kind of gains, and still claim to be Georgist, doesn’t make sense,” you are clearly just making an idiotic ad hominem attack against the president of the Council of Georgist Organizations (me).

      The only taxable “gains” come from a person with idle land *selling* that land. We want that person to sell that land so it can be put into use, and we have no desire to discourage that.

      It really doesn’t matter whether LVT is constitutional at the federal level, because it is constitutional at the state and local levels. All we want the Federal government to do is stop taxing people and giving the money to the states. Then the states can raise their own taxes from land values, as can counties, municipalities and school districts.

      We also oppose centralized taxation, and most anarchists and libertarians on this page also oppose centralized taxation more than local taxation. So, again, you just don’t understand *anyone* else in this conversation.

      • Rick DiMareNo Gravatar says:

        “The only taxable ‘gains’ come from a person with idle land *selling* that land. We want that person to sell that land so it can be put into use, and we have no desire to discourage that.”

        So, can we agree that the capital (land) gain tax is an income tax, and that you condone it? (I’m not talking about the current rate of this tax, which I think we’d agree is much too low, and captures too little land rent, but I’d just like to know if you agree with the capital (land) gain tax in principle.)

        • Dan SullivanNo Gravatar says:

          No, no, a thousand times no. If you were not being intentionally obtuse, you would know that we do not agree. If you tax the land gains, you prevent the sales. People will simply keep the land out of use or put it to a trivial use. (Trivial uses by land monopolists is where fox hunts came from.)

          George was very explicit in his denunciation of that proposal as well, and he criticized John Stuart Mill for making just that proposal.

          We don’t need more federal taxes, period. Local and state taxes on land value are enough, so there is no problem. You are just wasting everyone’s time.

          • Rick DiMareNo Gravatar says:

            “No, no, a thousand times no. If you were not being intentionally obtuse, you would know that we do not agree. If you tax the land gains, you prevent the sales. People will simply keep the land out of use or put it to a trivial use. (Trivial uses by land monopolists is where fox hunts came from.)”

            Dan, this is one of the most absurd things I’ve heard you say so far.

            Do you realize how difficult it was to get the right to tax *any* kind of land gains prior to ratification of the 16th Amendment of 1913? Do you really want to let the fox escape because you don’t have the right to directly tax the current market value of land?

            Your response should not be to exempt all taxation of land gains after the 16th Amendment (simply because we can’t levy your direct property tax on land), but your response should relate to how we can extend the right of taxation over *realized* capital/land gains so that we can tax *unrealized* land gains as a preliminary or estimated tax (prior to sale or transfer of land).

            • Dan SullivanNo Gravatar says:

              Do you realize how stupid it is to suppose we cannot tax land values unless we do it through the federal government? Do you not realize that the property tax already taxes land values?

              When all the municipalties, school districts and states are getting all of their revenue from land value tax, then we might have to worry about all your legalistic mumbo-jumbo about the 16th amendment preventing us from going further. As it is, we just want the federal government to stand down and tax less, period.

              We can handle it at the state and local levels and get the right tax, not something that you think we should accept instead. Nobody needs your dubious compromises.

              • Rick DiMareNo Gravatar says:

                Again, Dan, I don’t know what you’re doing on an anarchist blog site.

                By advocating for a direct property tax on land value or on land rental value, whether at the state or federal level, you are advocating for full state ownership of land.

                I have never heard or, or read about, any tax analyst who would disagree with the fact that a direct tax on land will lead to nationalization of it.

                • John KindleyNo Gravatar says:

                  As Albert Jay Nock said, the single tax is the antithesis of the State, and it’s implementation would necessarily lead to the disappearance of the State: http://www.peoplevstate.com/?p=1775. Combine the single tax with Thomas Jefferson’s Ward System and you’d have government, but not the State.

                  • Rick DiMareNo Gravatar says:

                    John, it depends on what Nock meant by “confiscation of economic rent.”

                    The mainstream so-called Georgists take the position that taxes on “economic rent” means Henry George wanted a hybrid “single tax” on unearned increments and profits from land exploitation *plus* a direct tax on current market value.

                    If Nock meant only to tax unearned increments and surplus value/profits from land exploitation (without causing a direct tax on land), then yes, we’d end up with something like Jefferson’s bare-bones government that managed and enforced land titles and boundaries, with no overbearing state.

                    Otherwise, the kind of LVT that Dan and the mainstream Georgists want is a kind of Trojan horse that causes a direct tax on land to “get in the door” along with legitimate taxes on economic rent, with the effect of ultimately causing complete state ownership of land, which land will then be leased out to us peons by government insiders and bureaucrats (but they will call the lease payments a “tax”).

                    • Dan SullivanNo Gravatar says:

                      The only Georgist to whom the descriptor “co called” applies is Rick DiMare. George very explicitly denounced a tax on gains in land value (whether realized or not) in his *Science of Political Economy*, and spent an entire chapter explaining why.

                      Rick DiMare’s proposal is also the only Trojan Horse. The income tax we have now was sold on the grounds that it would only tax unearned income from land, and that it would replace tariffs and help bring about free trade. It ended up taxing all sorts of income, and replacing local real estate taxes through the centralization of spending.

                      That 1913 income tax also killed the Georgist movement for more than half a century.

                    • Rick DiMareNo Gravatar says:

                      “George very explicitly denounced a tax on gains in land value (whether realized or not) in his *Science of Political Economy*, and spent an entire chapter explaining why.”

                      Dan, please cite the chapter in SPE so that we may verify Henry George denounced taxes on land gains, a most outrageous claim.

                      “That 1913 income tax also killed the Georgist movement for more than half a century.”

                      Dan, the Sixteenth Amendment was necessary because Georgists included a tax on landlords’ rental income in the 1894 income tax, which caused the Supreme Court to strike it down as unconstitutional in Pollock v. Farmers’ Loan (1895). The only reason the 1913 hybrid income tax is able to keep Georgists like yourself confused is that you fail to explore the issues at stake in the Pollock decision. If you made your followers aware of the difference between a property income tax and a privilege income tax, Georgists would begin to see that they had legal power to disambiguate the blended 1913 income tax so that the property income tax could effect its Georgist purpose.

                • Dan SullivanNo Gravatar says:

                  “I have never heard or, or read about, any tax analyst who would disagree with the fact that a direct tax on land will lead to nationalization of it.”

                  First of all, you only read what you want to read. I can dig up lots of economists, including several you cited, who disagree with that, and I can show you angry socialists who denounced George because his tax would *not* nationalize land, which they considered to be necessary.

                  But as I have already dug up so many things to disprove your empty assertions, I would first like to see you dig up the definitions of “fact” and “conclusion,” so you can stop using the former when you mean the latter.

                  By the way, I didn’t see your apology for your false statement about George advocating a tax on future gains in land value, and your claim that my saying he explicitly opposed such a tax was “outrageous.”

                  Is it too much to expect a little honesty here?

                  • Rick DiMareNo Gravatar says:

                    “By the way, I didn’t see your apology for your false statement about George advocating a tax on future gains in land value, and your claim that my saying he explicitly opposed such a tax was “outrageous.” . . . Is it too much to expect a little honesty here?”

                    Dan, you’re about the most dishonest evasive blogger I’ve seen so far, so calling me dishonest is laughable. You seek to evade, and twist words and meanings, rather than seek the truth of the matter.

                    The quotes you presented show that George was against J.S. Mill’s idea of the tax on unearned increments as a stand-alone tax. I’ve said many times (which you conveniently ignore) that “land gains” includes *both* (1) the unearned increment and (2) profits from exploitation. (Maybe if I number them, you’ll notice.)

                    How about an apology from you?

      • Rick DiMareNo Gravatar says:

        “So, when you say, ‘You don’t understand income taxes if you think this,’ I say nobody understands income taxes as you understand them, which suggests that you are horribly wrong.”

        “Some George champions point out there would be no unearned increments if the property tax rate on land values were as high as they would have it (and buyers and sellers expect it to remain high). Thus, they dismiss thoughts of how we get from here to Nirvana, and how we make do en route. ‘Some for the Glories of This World, and some sigh for the Prophet’s Paradise to come.’ As to ‘This World,’ perfectionists also dismiss the income-tax version of the capital gains tax because it is an imperfect tax (which it is). It is levied only at time of sale, making it (as Wicksell wrote) a tax on commerce, a barrier to allocating land ideally. But its virtue depends on ‘compare to what?’. It certainly beats the income tax sans a capital gains tax.” Mason Gaffney, “The Hidden Taxable Capacity of Land: Enough and To Spare.” pg. 347 http://www.masongaffney.org/publications/G2009-Hidden_Taxable_Cap acity_of_Land_2009.pdf

        “Unearned Increments as Current Rents . . . There is a swelling of ‘capital gains’ (mostly land gains, actually) as a component of income. In this case there is no corresponding realization among economists or the public that capital gains on land are eminently taxable. On the contrary, as gains grow so do the wealth and political power of the movement to untax them. So much greater, then, is the need for objective economists to establish the taxability of capital gains. Unrealized gains can be taxed as they accrue, without disincentive effects or administrative nightmares, and economists need to estimate the new revenue potential that now largely escapes taxation. . . My proposed tax if focused on unearned increments to land values. . . . My proposal is to tax land-value gains as they accrue, rather than upon sale.” Mason Gaffney Reader (2013), pg. 98-99 http://www.masongaffneyreader.com

      • Rick DiMareNo Gravatar says:

        “We also oppose centralized taxation, and most anarchists and libertarians on this page also oppose centralized taxation more than local taxation. So, again, you just don’t understand *anyone* else in this conversation.”

        Dan, you are the one who wants to give the state the power to directly tax land ownership, which essentially means you believe in state ownership/control of land, so I doubt if you belong on an anarchist blog site. If the state has power to tax something because you own it, then you don’t own it. If I’m eating a sandwich and other people have rights to take bites out of it, I might think I own the sandwich because it’s in my hand, but I really don’t own/control it in a meaningful way.

  20. Henry LawNo Gravatar says:

    “It would not be possible for an assessor to determine in advance how each land exploiter will use a land parcel.”

    It is not necessary to do that. Market evidence is sufficient. Land sales are part of that. If you have zoning then that provides a good general guide. For LVT purposes it is not necessary to know precisely what the land is use for any more than a landowner would need to know if the site was to be leased for a rental.

    If you prefer the idea of calling it “income tax ” on land rent, fair enough but it is normally referred to as land value tax.

    • Rick DiMareNo Gravatar says:

      “Another advantage of the income tax is to capture more of the unrealized appreciation of minerals in situ. Ideally this would not be necessary. Ideally, a property assessor could put a present value on the future cash flow from a mine-mouth or wellhead or open pit, and assess that each year as it gradually ripens from green resource to green cash, over many decades. In administrative practice and law, though, that has proven difficult, and does not always happen. Some assessors do not value unripe resources until they approach harvest time, and the valuable subsoil deposit is about to fly. Given that problem, a severance or income tax at time of extraction is the only way to tax the capital gain that accrues between acquisition at low cost and sale at a high price.” Mason Gaffney, The Hidden Taxable Capacity of Land, pg. 345
      http://www.masongaffney.org/publications/G2009-Hidden_Taxable_Cap acity_of_Land_2009.pdf

  21. Henry LawNo Gravatar says:

    Arguing round in circles gets tiresome so I am stopping.

  22. Rick DiMareNo Gravatar says:

    Is a “narrow fixation on property taxes” keeping Georgism suppressed and irrelevant? I think so, and so does one of the movement’s most respected thinkers:

    “The term ‘single tax’ has been unfortunate in helping to perpetuate a narrow fixation on property taxes; as a result, even advocates of land value taxation tend to underestimate the revenue potential from rents. Many lands and resources that yield rents are not observed or measured in traditional real estate markets. There is a new realization that ‘taxes on rent’ are much broader than the traditional land value tax.” Mason Gaffney, page 93, “The Mason Gaffney Reader: Essays on Solving the ‘Unsolvable’” http://www.masongaffneyreader.com

    What’s worse, however, is that this “narrow fixation on property taxes” (i.e., giving power to the state to tax land simply because someone owns it) will substantially increase the state’s power to levy an unavoidable tax, even on small residential lots. This means that many Georgists support the kind of land value tax which advances the goals of the first plank of the Communist Manifesto, (“Abolition of property in land and application of all rents of land to public purposes.”), which of course is something that would cause Henry George to roll over in his grave.

  23. John KindleyNo Gravatar says:

    It seems to me people should be afforded the opportunity to pay the tax on “small residential lots” through government service.

    • Rick DiMareNo Gravatar says:

      John, in a free society there should be no direct taxes on the act of ownership, not on the ownership of one’s body, mind, energy/labor/wages, material possessions, bank accounts, etc. and not on the reasonable parcel of residential land upon which the individual chooses to rest his/her body.

      My position is that government can levy all the indirect taxes it can politically get away with, but no direct taxes on the act of ownership itself.

      In other words, the state would have power to collect unearned land gains from holding land, even small residential lots (assuming it doesn’t cause eviction), but the state should have no right to tax the *act of owning* a small residential lot.

  24. Henry LawNo Gravatar says:

    The right of ownership of land derives from the state which issues the land title and will protect the right of title through its organs and institutions. That this right should come free of some reciprocal payment or other obligation is an anomaly, and ultimately, a grave injustice against everyone else in the community.

    • Rick DiMareNo Gravatar says:

      “The right of ownership of land derives from the state which issues the land title and will protect the right of title through its organs and institutions.”

      Henry, it’s not as easy as saying land access come from the state, or conversely, all come from the rights of the individual. When it comes to land, there’s a split in legal title. Yes, the state issues land titles and protects the title and enforces boundaries. This gives the state a right to the unearned land gains which gains its protection helps to accrue. But it doesn’t give the state complete ownership, only “legal title.” The landowner, as beneficiary of the trust between the state and the people, is the “equitable owner,” i.e., the ultimate reason the trust was formed in the first place … got to run for awhile.

  25. Henry LawNo Gravatar says:

    What does “own” actually mean?

    • Rick DiMareNo Gravatar says:

      The “right to exclude,” but even that depends on context. Henry George ended up conceding that we an exclusive right to possess land, but stopped short of saying we could own it. So, what he was really against is allodial or absolute private ownership, not against the bifurcated ownership I mentioned above where both the state and landowner have certain rights under trust law principles (but this assumes the state is actually constructed on trust law principles, which a monarchy or communistic country is not).

  26. Henry LawNo Gravatar says:

    Possess is not the same thing as own. For all practical purposes, possession is good enough. Either way it raises the question of how the land came to be possessed in the first place, since this involves excluding everyone else. Where does this “right” come from, other than the barrel of a gun? What is the morality of this “right”?

    • Rick DiMareNo Gravatar says:

      “Possess is not the same thing as own. For all practical purposes, possession is good enough.”

      Good way to put it, Henry, and that’s likely the way Henry George saw it.

      “Either way it raises the question of how the land came to be possessed in the first place, since this involves excluding everyone else. Where does this ‘right’ come from, other than the barrel of a gun?”

      Yes, it comes from the barrel of a gun, i.e., the government’s gun under Lockean theory that the only purpose for government is to protect property.

  27. Henry LawNo Gravatar says:

    A 100% tax on the rental value of land is not the same thing as state ownership of land.

    The notion that anyone, including the state, owns, or can own, land is spurious. As the late Professor Denman said, and he was no LVT advocate but Professor in Land Economics at the University of Cambridge, land ownership is a “bundle of rights”.

    If this bundle of rights is not matched with corresponding duties there will be trouble.

  28. Henry LawNo Gravatar says:

    “The mainstream so-called Georgists take the position that taxes on “economic rent” means Henry George wanted a hybrid “single tax” on unearned increments and profits from land exploitation *plus* a direct tax on current market value.”

    That is not my impression, and does it matter anyway? It is clear that George proposed a high tax on the annual rental value of land ie the “single tax”. For some reason, US Georgists have taken that to mean a tax levied on the selling price of land titles, which is indeed loosely related to the annual rental value of land. But such a tax gives rise to all sorts of injustices and misconceptions which do not arise if the original concept of the tax is adhered to.

  29. Dan SullivanNo Gravatar says:

    “Dan, please cite the chapter in SPE so that we may verify Henry George denounced taxes on land gains, a most outrageous claim.”

    The fact that DiMare propsoses to speak for Georgists and hasn’t read his major works is the only outrageous thing here. He really should read the whole book, but he won’t. He will just continue to cherry-pick. So, here it is in *Progress and Poverty*, his magnum opus. If DiMare hasn’t even read that, he needs to stop referring to himself as Georgist and go learn something.

    But, he won’t do that, so here is the quote. Expect him to distort and dance and shuck and jibe and never admit that he has been crassly misrepresnting George all along”

    “It is this idea… which led John Stuart Mill, although clearly perceiving the essential injustice of private property in land, to advocate, not a full resumption of the land, but only a resumption of accruing advantages in the future. His plan was that a fair and even liberal estimate should be made of the market value of all the land in the kingdom, and that future additions to that value, not due to the improvements of the proprietor, should be taken by the state.

    “To say nothing of the practical difficulties which such cumbrous plans involve, in the extension of the functions of government which they would require and the corruption they would beget, their inherent and essential defect lies in the impossibility of bridging over by any compromise the radical difference between wrong and right. Just in proportion as the interests of the landholders are conserved, just in that proportion must general interests and general rights be disregarded, and if landholders are to lose nothing of their special privileges, the people at large can gain nothing….

    ” Mr. Mill’s plan for nationalizing the future ‘unearned increase in the value of land,’ by fixing the present market value of all lands and appropriating to the state future increase in value, would not add to the injustice of the present distribution of wealth, but it would not remedy it. Further speculative advance of rent would cease, and in the future the people at large would gain the difference between the increase of rent and the amount at which that increase was estimated in fixing the present value of land, in which, of course, prospective, as well as present, value is an element. But it would leave, for all the future, one class in possession of the enormous advantage over others which they now have. All that can be said of this plan is, that it might be better than nothing….

    “Nor is it right that there should be any concern about the proprietors of land. That such a man as John Stuart Mill should have attached so much importance to the compensation of landowners as to have urged the confiscation merely of the future increase in rent, is explainable only by his acquiescence in the current doctrines that wages are drawn from capital and that population constantly tends to press upon subsistence. These blinded him as to the full effects of the private appropriation of land. He saw that “the claim of the landholder is altogether subordinate to the general policy of the state,” and that “when private property in land is not expedient, it is unjust,” but… he yet never saw the true harmony of economic laws, nor realized how from this one great fundamental wrong flow want and misery, and vice and shame. Else he could never have written this sentence: “The land of Ireland, the land of every country, belongs to the people of that country. The individuals called landowners have no right in morality and justice to anything but the rent, or compensation for its salable value.”

    “It is not merely a robbery in the past; it is a robbery in the present — a robbery that deprives of their birthright the infants that are now coming into the world! Why should we hesitate about making short work of such a system? Because I was robbed yesterday, and the day before, and the day before that, is it any reason that I should suffer myself to be robbed today and tomorrow? Any reason that I should conclude that the robber has acquired a vested right to rob me?

    “If the land belong to the people, why continue to permit landowners to take the rent, or compensate them in any manner for the loss of rent? Consider what rent is. It does not arise spontaneously from land; it is due to nothing that the landowners have done. It represents a value created by the whole community. Let the landholders have, if you please, all that the possession of the land would give them in the absence of the rest of the community. But rent, the creation of the whole community, necessarily belongs to the whole community….”

    http://schalkenbach.org/library/henry-george/p+p/pp073.html

    Of course, Rick will not understand why George took this position, because he had not simply sat down and read any of Georges’s works from beginning to end. He arrived with his income tax agenda, and only seeks out passages he thinks he can distort into supporting that agenda. It’s his role in life.

    • Henry LawNo Gravatar says:

      Yes it does seem as if he is criticising something without knowing what he is criticising. Not a very credible position. Also seems hung up on the US Constitution. Most people outside the US will not care a flying fig about it.

    • Rick DiMareNo Gravatar says:

      Dan, it never ceases to amaze me that because you’ve been editor of some or all of Henry George’s works (1879-1897), that you think that gives you power to trump 115+ years (after George died) of argumentation by the Supreme Court and other U.S. legal authorities.

      Your comments above regarding J.S. Mill and the unearned increment are calculated to evade my main criticism about mainstream Georgists.

      If you look back at my prior comments in this post, I almost always refer to “land gains” as the unearned increment *plus* profits from land exploitation/use. I am not confining the definition of “land gains” to only the unearned increment, which is what you would like.

      I will re-read the portions of SPE and P&P that you cited, but right off the bat, it’s apparent to me you that don’t think the profits of landlords or land harvesters/exploiters should be taxed, i.e., that you don’t understand the concept of surplus value, and how this is also taxable land rent. It’s also obvious to me that if surplus value/land profits are not taxed *in addition to* the unearned increment, then yes, in support of your quotes, landowners who currently monopolize land will stay in power.

      Both the unearned increment *and* profits from exploitation must be taxed as land rents if the Georgist ideal is to be realized (which is not to mention that corporate and legal tender privileges should also be taxed … so as not to penalize those land exploiters who don’t seek government-granted privilege).

  30. Dan SullivanNo Gravatar says:

    “Dan, it never ceases to amaze me that because you’ve been editor of some or all of Henry George’s works (1879-1897), that you think that gives you power to trump 115+ years (after George died) of argumentation by the Supreme Court and other U.S. legal authorities.”

    It never ceases to amaze me how dishonest you are. I never once argued against Supreme court decisions, and the Supreme Court never once asserted that a land value tax is unconstitutional at the state and local level. Indeed, we have had municipal land value tax in Pennsylvania cities for just over a century.

    Instead of imagining what I think, you should maybe read George’s major works before you presume to speak for the Georgism.

    • Rick DiMareNo Gravatar says:

      Dan, it’s not a matter of “read[ing] George’s major works before you presume to speak for the Geogism,” but a matter of understanding the intent behind his works, and his main target was definitely not the common holder of modest residential land parcels, as you and other mainstream Georgists would have.

      Also, you are well aware that George wanted recognition at the federal level. Federal law can easily preempt state law when the property tax you advocate reaches the point at which it significantly impairs property rights (or what Henry George called “the right to exclusively possess”). And the impairment of property rights is inevitable under your LVT because direct taxes on property always ratchet up annually until they’re intolerable (whereas indirect taxes can be held in check by people avoiding the product or service which is excessively taxed).

      • Dan SullivanNo Gravatar says:

        Dan, it’s not a matter of “read[ing] George’s major works before you presume to speak for the Geogism,” but a matter of understanding the intent behind his works,

        So you understand the intent behind them without reading them. Typical self-delusional DiMarism.

        “and his main target was definitely not the common holder of modest residential land parcels, as you and other mainstream Georgists would have.”

        Boy, is that stupid. In every municipality that has switched to land value tax, most owner-occupied residential parcels pay less and most absentee-owned property pays more.

        Do you ever say anything that is factually correct?

        • Rick DiMareNo Gravatar says:

          I’ve asked you in the past to show where George advocated taxing modest residential lots and you evaded. He was always after the speculators and profiteers. If anything, he wanted to tax the large landholders to make more land available for the non-rent seekers.

          Where did he emphasize the taxation of common residential lots, as you are doing?

          • Dan SullivanNo Gravatar says:

            Are you just deliberately dense? George neither emphasized nor excluded common residential lots, and I neither emphasize nor exclude common residential lots. George advocated taxing *all* land based on its value, as do today’s Georgists.

            Again, most owner-occupied properties pay less due to the untaxing of their buildings, their wages, etc., than any increase they get on land. So, that decreases the tax on owners of common residential lots, except for those collecting large numbers of lots instead of holding one lot and putting it to use.

  31. Dan SullivanNo Gravatar says:

    That is simply untrue. Neither Mill nor George proposed taxing gains from exploitation of the land, and there is nothing in the passage to suggest otherwise. If you are going to call me a liar, cite something that backs you up, as I have done each time I exposed your lies.

    • Rick DiMareNo Gravatar says:

      I’m not saying that Mill or George advocated taxing gains from exploitation of land. Again, you are misrepresenting. I said that in the quotes you provided above George was critical of Mill for focusing only on the unearned increment and ignoring other land gains that would keep big landowners in power even if the unearned increment was taxed 100%.

      • Dan SullivanNo Gravatar says:

        Yeah, but it was a discussion about what George said, and he was against taxing future gains in value, period. He was also against taxing profits from exploiting the usufruct of land, period. So no matter how you slice it, you have misrepresented George. Today’s Georgists would charge royalties on extraction and charge for pollution, and there are some oblique indications that George might have supported this as well, mostly in his newspaper, *The Standard*, but I will not follow you down the path of supposing George to support something based on wishful remembering.

        As for corporations getting rich by exploiting land that is equally taxed, I think that is just your poor understanding of economics. Large corporations are very labor-efficient, but they are notoriously land-inefficient. That is, they get less yield per dollar value of land than smaller businesses get.

        • Rick DiMareNo Gravatar says:

          “Yeah, but it was a discussion about what George said, and he was against taxing future gains in value, period. He was also against taxing profits from exploiting the usufruct of land, period.”

          If your position is that George doesn’t want to tax unearned annual land gains, or gains from the sale of land, or profits from exploiting land, there’s really nothing else for us to discuss.

          I simply disagree.

  32. Henry LawNo Gravatar says:

    Your definitions indicate a misunderstanding of the meaning of the terms as George expressly defined them,

    George never discussed selling prices of land as under 100% LVT, the selling price of land is zero, and pro-rata at lower rates of LVT.

    • Rick DiMareNo Gravatar says:

      Both George and Marx had blind spots, though I think Marx’s oversight was much greater when he gave the state near complete control (ownership) over land, and just generally gave the state too much power over everything.

      I’m just doing my best to update and correct them … according to my studies in the evolution of U.S. income tax laws, but I think prior jurists already did that. So really I’m just raising awareness of the corrections to George and Marx that former Supreme Court justices already made.

      But not adopting a narrow orthodox reading of George doesn’t preclude me from identifying as a Georgist. I agree that we need to take the fun and profit out of holding land idle, or for speculation, or to make a few monopolists extremely wealthy. And I particularly agree that we need to stop taking wages as income and treat wages as the personal *property* they’re supposed to be.

      • Dan SullivanNo Gravatar says:

        Correcting George will be much easier for you if you find out what he actually said. No, I take that back. It will be harder (more work) to learn that than to just presume what he believed.

  33. Dan SullivanNo Gravatar says:

    Maybe he got his George from Marx. He clearly did not get it from George.

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