But great as they thus appear, the advantages of a transference of all
public burdens to a tax upon the value of land cannot be fully appreciated
until we consider the effect upon the distribution of wealth.
Tracing out the cause of the unequal distribution of wealth which appears
in all civilized countries, with a constant tendency to greater and greater
inequality as material progress goes on, we have found it in the fact that,
as civilization advances, the ownership of land, now in private hands,
gives a greater and greater power of appropriating the wealth produced
by labor and capital.
Thus, to relieve labor and capital from all taxation, direct and indirect,
and to throw the burden upon rent, would be, as far as it went, to counteract
this tendency to inequality, and, if it went so far as to take in taxation
the whole of rent, the cause of inequality would be totally destroyed.
Rent, instead of causing inequality, as now, would then promote equality.
Labor and capital would then receive the whole produce, minus that portion
taken by the state in the taxation of land values, which, being applied
to public purposes, would be equally distributed in public benefits.
That is to say, the wealth produced in every community would be divided
into two portions.
One part would be distributed in wages and interest between individual
producers, according to the part each had taken in the work of production;
the other part would go to the community as a whole, to be distributed
in public benefits to all its members.
In this all would share equally — the weak with the strong, young
children and decrepit old men, the maimed, the halt, and the blind, as
well as the vigorous. And justly so — for while one part
represents the result of individual effort in production, the other
the increased power with which the community as a whole aids the
Thus, as material progress tends to increase rent, were rent taken by
the community for common purposes the very cause which now tends to produce
inequality as material progress goes on would then tend to produce greater
and greater equality. ... read the whole chapter
Communities are allowed to have
whatever taxes and regulations
their citizens choose. Anyone who is dissatisfied can live elsewhere.
While communities would be permitted to tax wages and interest if
they wished, they would find it attractive to do so only if their
citizens were content with such sharing. The primary source of
financing for communities would be the rental value of land and other
natural opportunities. Because the provision of a worthwhile local
public good generally raises rent by enough to pay for the good,
communities would generally be able to finance themselves with only a
fraction of the rent of land. The rest of rent could provide as a
basic income for all.
Support for those who are unable
to provide for themselves would
come from this basic income, from the generosity of the fellow
citizens of their community, and from insurance that their parents
might reasonably be expected to provide for them in a world in which
all parents received justice themselves. ...
Nic Tideman: The Structure of
an Inquiry into the Attractiveness of A Social Order Inspired by the
Ideas of Henry George
A. People own
themselves and therefore own what
B. People have obligations to share equally the opportunities that
are provided by nature.
C. People are free to interact with other competent adults on
whatever terms are mutually agreed.
D. People have obligations to pay the costs that their intrusive
behaviors impose on others.
A. What is
the relationship between justice (as
embodied in the ethical principles) and community (or peace or
B. How are the weak to be provided for?
C. How should natural opportunities be shared?
D. Who should be included in the group among whom rent should be
E. Is there an obligation to compensate those whose presently
recognized titles to land and other exclusive natural opportunities
will lose value when rent is shared equally?
F. Can a person who is occupying a per capita share of land
reasonably ask to be left undisturbed indefinitely on that land?
G. What is the moral status of "intellectual property?"
H. What standards of environmental respect can people reasonably
require of others?
I. What forms of land use control are consistent with the philosophy
of Henry George?
A. Would public
collection of the rent of land
provide enough revenue for an appropriate public sector?
B. How much revenue could public collection of rent raise?
C. Is it possible to assess land with sufficient accuracy?
D. How much growth can a community expect if it shifts taxes from
improvements to land?
E. To what extent does the benefit that one community receives from
shifting taxes from buildings to land come at the expense of other
F. What is the impact of land taxes on land speculation?
G. How, if at all, does the impact of shifting the source of public
revenue to land change if it is a whole nation rather than just a
community that makes the shift?
H. Is there a danger that the application of Henry George's ideas
would lead to a world of over-development?
I. How would natural resources be managed appropriately if
regarded as the common heritage of humanity?
Read the whole article
Henry George: How
to Help the Unemployed (1894)
AN EPIDEMIC of what passes for
charity is sweeping over the land. ...
Yet there has been no disaster of fire or flood, no convulsion
nature, no destruction by public enemies. The seasons have kept their
order, we have had the former and the latter rain, and the earth has
not refused her increase. Granaries are filled to overflowing, and
commodities, even these we have tried to make dear by tariff, were
never before so cheap.
The scarcity that is distressing
and frightening the whole country
is a scarcity of employment. It is the unemployed for whom charity is
asked: not those who cannot or will not work, but those able to work
and anxious to work, who, through no fault of their own, cannot find
work. So clear, indeed, is it that of the great masses who are
suffering in this country to-day, by far the greater part are honest,
sober, and industrious, that the pharisees who preach that poverty is
due to laziness and thriftlessness, and the fanatics who attribute it
to drink, are for the moment silent.
What more unnatural than that
alms should be asked, not for the
maimed, the halt and the blind, the helpless widow and the tender
orphan, but for grown men, strong men, skilful men, men able to work
and anxious to work! What more unnatural than that labor -- the
producer of all food, all clothing, all shelter -- should not be
exchangeable for its full equivalent in food, clothing, and shelter;
that while the things it produces have value, labor, the giver of all
value, should seem valueless!
... Read the entire
Nic Tideman: Improving
Efficiency and Preventing Exploitation in Taxing and Spending Decisions
What, then, about public goods that have benefits over greater areas? If
only a few localities are involved, one might expect them to negotiate voluntary
compacts with reasonable efficiency. "Pork
barrel" projects--all projects with benefits for only a small region of the
country--should not be paid for with national taxes. The practice leads to
the approval of inefficient
projects as a result of the politicking of those who benefit, and it unjustly
who do not benefit.
For truly national public goods, other ideas
must be explored. One of the major national public goods is defense.
In a perfectly just world, everyone would be so respectful of the rights
of others, and everyone would feel so safe that no defense spending would
be desired. In a less perfect world, many people, but not all, want public
defense expenditures. How can they be provided justly?
Some financing of defense expenditures
can be provided by a Pigouvian tax on the externality of accumulating capital,
which makes a nation a more attractive target of aggression. If the U.S. requires
a greater defense budget than Canada, which is larger in area, it is because
the greater value of the assets in the U.S. makes the U.S. a more attractive
target of aggression. Thus anyone who owns capital might reasonably be charged
for the increase in the defense budget that is needed to make other citizens
as safe as they would be if that one person's capital were not adding to the
attractiveness of nation as a target. It would be interesting to know how much
of the defense budget could be covered by such charges. I propose a self-assessed tax of, perhaps, 1% per
year on the value of all assets and contractual rights, to pay the costs of
defense. The owner assesses the value and pays a corresponding tax, and if
anyone wants to buy the asset at the assessed value, it is sold. There
could be a personal exemption of perhaps $50,000 per year, and an exemption
for personal papers. There could be a local add-on to pay the costs of local
police and courts.
An even greater share of the federal budget is used for various programs that
provide help for people with special needs--welfare, Medicare, Medicaid, Social
Security, unemployment insurance, disaster assistance, etc. Some of these programs
(social security, Medicare, and unemployment compensation) are funded in part
by payments by prospective beneficiaries. But all incorporate substantial elements
of deliberate redistribution.
In a world that adhered to a classical liberal understanding of justice, there
would be three sources of funding for people with
1) insurance that those with special needs had
bought for themselves prior to the onset of their special needs,
2) donations from family, friends and other compassionate
3) local public expenditures that would be non-coercively
financed, because anyone who objected to the financing could leave the locality.
In a just would, people would ensure, prior to conceiving children, that any
expensive special needs that their children might have would be paid for, either
by insurance that the parents would buy, or by voluntary conventions in their
communities that the community would pay the costs of such needs.
Perhaps you object that some people would not be able to afford such insurance
for all their children. If this is true, it implies one of two things.
- Either the parents of such children are behaving unjustly by conceiving
those children, who will either lack what they ought to have or will
be able to receive it only by the imposition of unjust taxes.
- Or else the parents have been treated unjustly by having started life
without enough resources to provide for the children that they ought to
the chance to bring into the world. I would guess that sometimes the
first is true, sometimes the second, and sometimes both.
The possibility that prospective parents might
be unable to afford to provide for the children that they ought to have the chance
to bring into the world highlights the possible need for a one-time redistribution
that would give everyone a fair starting point. This does not mean equality
for ever. It does not necessarily even mean equality at the starting time. What
it means is allocating initial rights in such a way that we do not mind requiring
people to pay the costs of their choices, including the choice of conceiving
children (unless they belong to communities that agree to pay the costs of some
of their choices).
Whenever a one-time redistribution is proposed, a reaction of many economists
is, "Yeah, right. Why would anyone one believe that it would be only one time?" What
would make it reasonable to believe that such a redistribution would be a
one-time event is its rationale: The recognition that some persons have had
inadequate starting positions in life, and the determination to end that.
If the purpose is achieved, there is no rationale for further redistribution,
unless, at some future time, our society attains a new moral insight that
that further redistribution is required. ... read the whole article