2. THE TWO KINDS OF DIRECT TAXATION
Direct taxes fall into two general classes: (1) Taxes that are levied upon men
in proportion to their ability to pay, and (2) taxes that are levied
in proportion to the benefits received by the tax-payer from the public.
Income taxes are the principal ones of the first class, though probate and inheritance
taxes would rank high. The single tax is the only important one of the second
class.
There should be no difficulty in choosing between the two. To tax in proportion
to ability to pay, regardless of benefits received, is in accord with no
principle of just government; it is a device of piracy. The single tax, therefore,
as the only important tax in proportion to benefits, is the ideal tax.
But here we encounter two plausible objections. One arises from the mistaken
but common notion that men are not taxed in proportion to benefits unless
they pay taxes upon every kind of property they own that comes under the
protection of government; the other is founded in the assumption that it
is impossible to measure the value of the public benefits that each individual
enjoys. Though the first of these objections ostensibly accepts the doctrine
of taxation according to benefits,12 yet, as it leads to attempts at taxation
in proportion to wealth, it, like the other, is really a plea for the piratical
doctrine of taxation according to ability to pay. The two objections stand
or fall together.
12. It is often said, for instance, by its advocates,
that house owners should in justice contribute to the support of the
fire departments that protect them and it is even gravely argued that
houses are more appropriate subjects of taxation than land; because they
need protection, whereas land needs none. Read note 8.
Let it once be perceived that the value of the service which government
renders to each individual would be justly measured by the single tax, and
neither objection would any longer have weight. We should then no more think
of taxing people in proportion to their wealth or ability to pay, regardless
of the benefits they receive from government than an honest merchant would
think of charging his customers in proportion to their wealth or ability
to pay, regardless of the value of the goods they bought of him." 13
13. Following is an interesting computation of the cost
and loss to the city of Boston of the present mixed system of taxation
as compared with the single tax; The computation was made by James R.
Carret, Esq., the leading conveyancer of Boston:
Valuation of Boston, May 1, 1892
Land... ... . .. ... .. ... .. $399,170,175
Buildings ... ... ... ... ..$281,109,700
Total assessed value of real estate $680,279,875
Assessed value of personal estate $213,695,829
.... .... ... ... ... ... ... ... .... .... .... ...
.... ... $893,975,704
Rate of taxation, $12.90 per $1000
Total tax levy, May 1, 1892 $11,805,036
Amount of taxes levied in respect of the different subjects
of taxation and percentages of the same:
Land .... .... .... .... $5,149,295 43.62%
Buildings .... .... .. $3,626,295 30.72%
Personal estate .. $2,756,676 23.35%
Polls ... .... ... .... .... ...272,750 2.31%
But to ascertain the total cost to the people of Boston
of the present system of taxation for the taxable year, beginning May
1, 1892, there should be added to the taxes assessed upon them what it
cost them to pay the owners of the land of Boston for the use of the
land, being the net ground rent, which I estimate at four per cent on
the land value.
Total tax levy, May 1, 1892 ... ... ... ... .... ....
.... .... .... ..... .... .... .... .... .... .... ..$11,805,036
Net ground rent, four percent, on the land value
($399,170,175)..... ... ... ...$15,966,807
Total cost of the present system to the people of
Boston for that year ... $27,771,843
To contrast this with what the single tax system would
have cost the people of Boston for that year, take the gross ground rent,
found by adding to the net ground rent the taxation on land values for
that year, being $12.90 per $1000, or 1.29 per cent added to 4 per cent
= 5.29 per cent.
Total cost of present system as above .. .... .... ....
.... .... .... .... .... ....$27,771,843
Single tax, or gross ground rent, 5.29 per cent
on $399,170,175 ... ..$21,116,102
Excess cost of present system, which is the sum
of
taxes in respect of buildings, personal property,
and polls .... ...... .. $6,655,741
But the present system not only costs the people more
than the single tax would, but produces less revenue:
Proceeds of single tax ... ... ... ... ..... .... ....
..... .... .... .... ..... ..... .... $21,116,102
Present tax levy ... ... ... ... ... .... .... ....
..... .... .... .... .... .... .... .... ....$11,805,036
Loss to public treasury by present system ... ....
.... .... .... .. ..... ..$9,311,066
This, however, is not a complete contrast between the
present system and the single tax, for large amounts of real estate are
exempt from taxation, being held by the United States, the Commonwealth,
by the city itself, by religious societies and corporations, and by charitable,
literary, and scientific institutions. The total amount of the value
of land so held as returned by the assessors for the year 1892 is $60,626,171.
Reasons can be given why all lands within the city should
be assessed for taxation to secure a just distribution of the public
burdens, which I cannot take the space to enter into here. There is good
reason to believe also that lands in the city of Boston are assessed
to quite an appreciable extent below their fair market value. As an indication
of this see an editorial in the Boston Daily Advertiser for
October 3, 1893, under the title, "Their Own Figures."
The vacant lands, marsh lands, and flats in Boston were
valued by the assessors in 1892 (page 3 of their annual report) at $52,712,600.
I believe that this represents not more than fifty per cent of their
true market value.
Taking this and the undervaluation of improved property
and the exemptions above mentioned into consideration, I think $500,000,000
to be a fair estimate of the land values of Boston. Making this the basis
of contrast, we have:
Proceeds of single tax 5.29 per cent on $500,000,000 ...
.... .... .... $26,450,000
Present tax levy ... .... ... .... .... .... ....
.... ..... .... .... .... .... ..... .... .... ..$11,805,036
Loss to public treasury by present system ... ...
... ... .... .... .... ....$14,644,974
3. THE SINGLE TAX FALLS IN PROPORTION TO BENEFITS
To perceive that the single tax would justly measure the value of government
service we have only to realize that the mass of individuals everywhere and
now, in paying for the land they use, actually pay for government service in
proportion to what they receive. He who would enjoy the benefits of a government
must use land within its jurisdiction. He cannot carry land from where government
is poor to where it is good; neither can he carry it from where the benefits
of good government are few or enjoyed with difficulty to where they are many
and fully enjoyed. He must rent or buy land where the benefits of government
are available, or forego them. And unless he buys or rents where they are greatest
and most available he must forego them in degree. Consequently, if he would
work or live where the benefits of government are available, and does not already
own land there, he will be compelled to rent or buy at a valuation which, other
things being equal, will depend upon the value of the government service that
the site he selects enables him to enjoy. 14 Thus does he pay for the service
of government in proportion to its value to him. But he does not pay the public
which provides the service; he is required to pay land-owners.
14. Land values are lower in all countries of poor government
than in any country of better government, other things being equal. They
are lower in cities of poor government, other things being equal, than
in cities of better government. Land values are lower, for example, in
Juarez, on the Mexican side of the Rio Grande, where government is bad,
than in El Paso, the neighboring city on the American side, where government
is better. They are lower in the same city under bad government than
under improved government. When Seth Low, after a reform campaign, was
elected mayor of Brooklyn, N.Y., rents advanced before he took the oath
of office, upon the bare expectation that he would eradicate municipal
abuses. Let the city authorities anywhere pave a street, put water through
it and sewer it, or do any of these things, and lots in the neighborhood
rise in value. Everywhere that the "good roads" agitation of
wheel men has borne fruit in better highways, the value of adjacent land
has increased. Instances of this effect as results of public improvements
might be collected in abundance. Every man must be able to recall some
within his own experience.
And it is perfectly reasonable that it should be so.
Land and not other property must rise in value with desired improvements
in government, because, while any tendency on the part of other kinds
of property to rise in value is checked by greater production, land can
not be reproduced.
Imagine an utterly lawless place, where life and property
are constantly threatened by desperadoes. He must be either a very bold
man or a very avaricious one who will build a store in such a community
and stock it with goods; but suppose such a man should appear. His store
costs him more than the same building would cost in a civilized community;
mechanics are not plentiful in such a place, and materials are hard to
get. The building is finally erected, however, and stocked. And now what
about this merchant's prices for goods? Competition is weak, because
there are few men who will take the chances he has taken, and he charges
all that his customers will pay. A hundred per cent, five hundred per
cent, perhaps one or two thousand per cent profit rewards him for his
pains and risk. His goods are dear, enormously dear — dear enough
to satisfy the most contemptuous enemy of cheapness; and if any one should
wish to buy his store that would be dear too, for the difficulties in
the way of building continue. But land is cheap! This is the
type of community in which may be found that land, so often mentioned
and so seldom seen, which "the owners actually can't give away,
you know!"
But suppose that government improves. An efficient administration
of justice rids the place of desperadoes, and life and property are safe.
What about prices then? It would no longer require a bold or desperately
avaricious man to engage in selling goods in that community, and competition
would set in. High profits would soon come down. Goods would be cheap — as
cheap as anywhere in the world, the cost of transportation considered.
Builders and building materials could be had without difficulty, and
stores would be cheap, too. But land would be dear! Improvement
in government increases the value of that, and of that alone.
Now, the economic principle pursuant to which land-owners are thus able
to charge their fellow-citizens for the common benefits of their common government
points to the true method of taxation. With the exception of such other monopoly
property as is analogous to land titles, and which in the purview of the
single tax is included with land for purposes of taxation, 15 land is the
only kind of property that is increased in value by government; and the increase
of value is in proportion, other influences aside, to the public service
which its possession secures to the occupant. Therefore, by taxing land in
proportion to its value, and exempting all other property, kindred monopolies
excepted — that is to say, by adopting the single tax — we should
be levying taxes according to benefits.16
15. Railroad franchises, for example, are not usually
thought of as land titles, but that is what they are. By an act of sovereign
authority they confer rights of control for transportation purposes over
narrow strips of land between terminals and along trading points. The
value of this right of way is a land value.
16. Each occupant would pay to his landlord the value
of the public benefits in the way of highways, schools, courts, police
and fire protection, etc., that his site enabled him to enjoy. The landlord
would pay a tax proportioned to the pecuniary benefits conferred upon
him by the public in raising and maintaining the value of his holding.
And if occupant and owner were the same, he would pay directly according
to the value of his land for all the public benefits he enjoyed, both
intangible and pecuniary.
And in no sense would this be class taxation. Indeed, the cry of class
taxation is a rather impudent one for owners of valuable land to raise against
the single tax, when it is considered that under existing systems of taxation
they are exempt. 17 Even the poorest and the most degraded classes in the
community, besides paying land-owners for such public benefits as come their
way, are compelled by indirect taxation to contribute to the support of government.
But landowners as a class go free. They enjoy the protection of the courts,
and of police and fire departments, and they have the use of schools and
the benefit of highways and other public improvements, all in common with
the most favored, and upon the same specific terms; yet, though they go through
the form of paying taxes, and if their holdings are of considerable value
pose as "the tax-payers" on all important occasions, they,
in effect and considered as a class, pay no taxes, because government, by
increasing the value of their land, enables them to recover back in higher
rents and higher prices more than their taxes amount to. Enjoying the same
tangible benefits of government that others do, many of them as individuals
and all of them as a class receive in addition a tangible pecuniary benefit
which government confers upon no other property-owners. The value of their
property is enhanced in proportion to the benefits of government which its
occupants enjoy. To tax them alone, therefore, is not to discriminate against
them; it is to charge them for what they get.18
17. While the landholders of the City of Washington were
paying something less than two per cent annually in taxes, a Congressional
Committee (Report of the Select Committee to Investigate Tax Assessments
in the District of Columbia, composed of Messrs. Johnson, of Ohio, Chairman,
Wadsworth, of New York, and Washington, of Tennessee. Made to the House
of Representatives, May 24, 1892. Report No. 1469), brought out
the fact that the value of their land had been increasing at a minimum
rate of ten per cent per annum. The Washington land-owners as a class
thus appear to have received back in higher land values, actually and
potentially, about ten dollars for every two dollars that as land-owners
they paid in taxes. If any one supposes that this condition is peculiar
to Washington let him make similar estimates for any progressive locality,
and see if the land-owners there are not favored in like manner.
But the point is not dependent upon increase in the capitalized
value of land. If the land yields or will yield to its owner an income
in the nature of actual or potential ground rent, then to the extent
that this actual or possible income is dependent upon government the
landlord is in effect exempt from taxation. No matter what tax he pays
on account of his ownership of land, the public gives it back to him
to that extent.
18. Take for illustration two towns, one of excellent
government and the other of inefficient government, but in all other
respects alike. Suppose you are hunting for a place of residence and
find a suitable site in the town of good government. For simplicity of
illustration let us suppose that the land there is not sold outright
but is let upon ground rent. You meet the owner of the lot you have selected
and ask him his terms. He replies:
"Two hundred and fifty dollars a year."
"Two hundred and fifty dollars a year! " you
exclaim. "Why, I can get just as good a site in that other town
for a hundred dollars a year."
"Certainly you can," he will say. "But
if you build a house there and it catches fire it will burn down; they
have no fire department. If you go out after dark you will be 'held up'
and robbed; they have no police force. If you ride out in the spring,
your carriage will stick in the mud up to the hubs, and if you walk you
may break your legs and will be lucky if you don t break your neck; they
have no street pavements and their sidewalks are dangerously out of repair.
When the moon doesn't shine the streets are in darkness, for they have
no street lights. The water you need for your house you must get from
a well; there is no water supply there. Now in our town it is different.
We have a splendid fire department, and the best police force in the
world. Our streets are macadamized, and lighted with electricity; our
sidewalks are always in first class repair; we have a water system that
equals that of New York; and in every way the public benefits in this
town are unsurpassed. It is the best governed town in all this region.
Isn't it worth a hundred and fifty dollars a year more for a building
site here than over in that poorly governed town?"
You recognize the advantages and agree to the terms.
But when your house is built and the assessor visits you officially,
what would be the conversation if your sense of the fitness of things
were not warped by familiarity with false systems of taxation? Would
it not be something like what follows?
"How much do you regard this house as worth? " asks
the assessor.
"What is that to you?" you inquire.
"I am the town assessor and am about to appraise
your property for taxation."
"Am I to be taxed by this town? What for?"
"What for?" echoes the assessor in surprise. "What
for? Is not your house protected from fire by our magnificent fire department?
Are not you protected from robbery by the best police force in the world?
Do not you have the use of macadamized pavements, and good sidewalks,
and electric street lights, and a first class water supply? Don't you
suppose these things cost something? And don't you think you ought to
pay your share?"
"Yes," you answer, with more or less calmness; "I
do have the benefit of these things, and I do think that I ought to pay
my share toward supporting them. But I have already paid my share for
this year. I have paid it to the owner of this lot. He charges me two
hundred and fifty dollars a year -- one hundred and fifty dollars more
than I should pay or he could get but for those very benefits. He has
collected my share of this year's expense of maintaining town improvements;
you go and collect from him. If you do not, but insist upon collecting
from me, I shall be paying twice for these things, once to him and once
to you; and he won't be paying at all, but will be making money out of
them, although he derives the same benefits from them in all other respects
that I do."
4. CONFORMITY TO GENERAL PRINCIPLES OF TAXATION
The single tax conforms most closely to the essential principles of Adam
Smith's four classical maxims, which are stated best by Henry George 19 as
follows:
The best tax by which public revenues can be raised is evidently that which
will closest conform to the following conditions:
- That it bear as lightly as possible upon production — so as least
to check the increase of the general fund from which taxes must be paid
and the community maintained. 20
- That it be easily and cheaply collected, and fall as directly as may
be upon the ultimate payers — so as to take from the people as little
as possible in addition to what it yields the government. 21
- That it be certain — so as to give the least opportunity for tyranny
or corruption on the part of officials, and the least temptation to law-breaking
and evasion on the part of the tax-payers. 22
- That it bear equally — so as to give no citizen an advantage or
put any at a disadvantage, as compared with others. 23
19. "Progress and Poverty," book viii. ch.iii.
20. This is the second part of Adam Smith's fourth maxim.
He states it as follows: "Every tax ought to be so contrived as
both to take out and to keep out of the pockets of the people as little
as possible over and above what it brings into the public treasury of
the state. A tax may either take out or keep out of the pockets of the
people a great deal more than it brings into the public treasury in the
four following ways: . . . Secondly, it may obstruct the industry of
the people, and discourage them from applying to certain branches of
business which might give maintenance and employment to great multitudes.
While it obliges the people to pay, it may thus diminish or perhaps destroy
some of the funds which might enable them more easily to do so."
21. This is the first part of Adam Smith's fourth maxim,
in which he condemns a tax that takes out of the pockets of the people
more than it brings into the public treasury.
22. This is Adam Smith's second maxim. He states it as
follows: "The tax which each individual is bound to pay ought to
be certain and not arbitrary. The time of payment, the manner of payment,
the quantity to be paid, ought all to be clear and plain to the contributor
and to every other person. Where it is otherwise, every person subject
to the tax is put more or less in the power of the tax gatherer."
23. This is Adam Smith's first maxim. He states it as
follows: "The subjects of every state ought to contribute towards
the support of the government as nearly as possible in proportion to
their respective abilities, that is to say, in proportion to the revenue
which they respectively enjoy under the protection of the state. The
expense of government to the individuals of a great nation is like the
expense of management to the joint tenants of a great estate, who are
all obliged to contribute in proportion to their respective interests
in the estate. In the observation or neglect of this maxim consists what
is called the equality or inequality of taxation."
In changing this Mr. George says ("Progress
and Poverty," book viii, ch. iii, subd. 4): "Adam Smith
speaks of incomes as enjoyed 'under the protection of the state'; and
this is the ground upon which the equal taxation of all species of
property is commonly insisted upon — that it is equally protected
by the state. The basis of this idea is evidently that the enjoyment
of property is made possible by the state — that there is a value
created and maintained by the community; which is justly called upon
to meet community expenses. Now, of what values is this true? Only
of the value of land. This is a value that does not arise until a community
is formed, and that, unlike other values, grows with the growth of
the community. It only exists as the community exists. Scatter again
the largest community, and land, now so valuable, would have no value
at all. With every increase of population the value of land rises;
with every decrease it falls. This is true of nothing else save of
things which, like the ownership of land, are in their nature monopolies."
Adam Smith's third maxim refers only to conveniency of
payment, and gives countenance to indirect taxation, which is in conflict
with the principle of his fourth maxim. Mr. George properly excludes
it.
a. Interference with Production
Indirect taxes tend to check production and cause scarcity, by obstructing
the processes of production. They fall upon men as they work, as they
do business, as they invest capital productively. 24 But the single
tax, which must be paid and be the same in amount regardless of whether the
payer works or plays, of whether he invests his capital productively or wastes
it, of whether he uses his land for the most productive purposes 25 or in lesser
degree or not at all, removes fiscal penalties from industry and thrift, and
tends to leave production free. It therefore conforms more closely than indirect
taxation to the first maxim quoted above.
24. "Taxation which falls upon the processes of production
interposes an artificial obstacle to the creation of wealth. Taxation
which falls upon labor as it is exerted, wealth as it is used as capital,
land as it is cultivated, will manifestly tend to discourage production
much more powerfully than taxation to the same amount levied upon laborers
whether they work or play, upon wealth whether used productively or unproductively,
or upon land whether cultivated or left waste" — Progress
and Poverty, book viii, ch. iii, subd. I.
25. It is common, besides taxing improvements, as fast
as they are made, to levy higher taxes upon land when put to its best
use than when put to partial use or to no use at all. This is upon the
theory that when his land is used the owner gets full income from it
and can afford to pay high taxes; but that he gets little or no income
when the land is out of use, and so cannot afford to pay much. It is
an absurd but perfectly legitimate illustration of the pretentious doctrine
of taxation according to ability to pay.
Examples are numerous. Improved building lots, and even
those that are only plotted for improvement, are usually taxed more than
contiguous unused and unplotted land which is equally in demand for building
purposes and equally valuable. So coal land, iron land, oil land, and
sugar land are as a rule taxed less as land when opened up for appropriate
use than when lying idle or put to inferior uses, though the land value
be the same. Any serious proposal to put land to its appropriate use
is commonly regarded as a signal for increasing the tax upon it.
b. Cheapness of Collection
Indirect taxes are passed along from first payers to final consumers through
many exchanges, accumulating compound profits as they go, until they take
enormous sums from the people in addition to what the government receives.26
But the single tax takes nothing from the people in excess of the tax. It
therefore conforms more closely than indirect taxation to the second maxim
quoted above.
26. "All taxes upon things of unfixed quantity increase
prices, and in the course of exchange are shifted from seller to buyer,
increasing as they go. If we impose a tax on money loaned, as has been
often attempted, the lender will charge the tax to the borrower, and
the borrower must pay it or not obtain the loan. If the borrower uses
it in his business, he in his turn must get back the tax from his customers,
or his business becomes unprofitable. If we impose a tax upon buildings,
the users of buildings must finally pay it, for the erection of buildings
will cease until building rents become high enough to pay the regular
profit and the tax besides. If we impose a tax upon manufactures or imported
goods, the manufacturer or importer will charge it in a higher price
to the jobber, the jobber to the retailer. and the retailer to the consumer.
Now, the consumer, on whom the tax thus ultimately falls, must not only
pay the amount of the tax, but also a profit on this amount to everyone
who has thus advanced it — for profit on the capital he has advanced
in paying taxes is as much required by each dealer as profit on the capital
he has advanced in paying for goods." — Progress and Poverty,
book viii, ch. iii, subd. 2.
c. Certainty
No other tax, direct or indirect, conforms so closely to the third maxim. "Land
lies out of doors." It cannot be hidden; it cannot be "accidentally" overlooked.
Nor can its value be seriously misstated. Neither under-appraisement nor
over-appraisement to any important degree is possible without the connivance
of the whole community. 27 The land values of a neighborhood are matters
of common knowledge. Any intelligent resident can justly appraise them, and
every other intelligent resident can fairly test the appraisement. Therefore,
the tyranny, corruption, fraud, favoritism, and evasions that are so common
in connection with the taxation of imports, manufactures, incomes, personal
property, and buildings — the values of which, even when the object
itself cannot be hidden, are so distinctly matters of minute special knowledge
that only experts can fairly appraise them — would be out of the question
if the single tax were substituted for existing fiscal methods. 28
27. The under-appraisements so common at present, and
alluded to in note 25, are possible because the community, ignorant of
the just principles of taxation, does connive at them. Under-appraisements
are not secret crimes on the part of assessors; they are distinctly recognized,
but thoughtlessly disregarded when not actually insisted upon, by the
people themselves. And this is due to the dishonest ideas of taxation
that are taught. Let the vicious doctrine that people ought to pay taxes
according to their ability give way to the honest principle that they
should pay in proportion to the benefits they receive, which benefits,
as we have already seen, are measured by the land values they own, and
underappraisement of land would cease. No assessor can befool the community
in respect of the value of the land within his jurisdiction.
And, with the cessation of general under-appraisement,
favoritism in individual appraisements also would cease. General under-appraisement
fosters unfair individual appraisements. If land were generally appraised
at its full value, a particular unfair appraisement would stand out in
such relief that the crime of the assessor would be exposed. But now
if a man's land is appraised at a higher valuation than his neighbor's
equally valuable land, and he complains of the unfairness, he is promptly
and effectually silenced with a warning that his land is worth much more
than it is appraised at, anyhow, and if he makes a fuss his appraisement
will be increased. To complain further of the deficient taxation of his
neighbor is to invite the imposition of a higher tax upon himself.
28. If you wish to test the merits in point of certainty
of the single tax as compared with other taxes, go to a real estate agent
in your community, and, showing him a building lot upon the map, ask
him its value. If he inquires about the improvements, instruct him to
ignore them. He will be able at once to tell you what the lot is worth.
And if you go to twenty other agents their estimates will not materially
vary from his. Yet none of the agents will have left his office. Each
will have inferred the value from the size and location of the lot.
But suppose when you show the map to the first agent you
ask him the value of the land and its improvements. He will tell you
that he cannot give an estimate until he examines the improvements. And
if it is the highly improved property of a rich man he will engage building
experts to assist him. Should you ask him to include the value of the
contents of the buildings, he would need a corps of selected experts,
including artists and liverymen, dealers in furniture and bric-a-brac,
librarians and jewelers. Should you propose that he also include the
value of the occupant's income, the agent would throw up his hands in
despair.
If without the aid of an army of experts the agent should
make an estimate of these miscellaneous values, and twenty others should
do the same, their several estimates would be as wide apart as ignorant
guesses usually are. And the richer the owner of the property the lower
as a proportion would the guesses probably be.
Now turn the real estate agent into an assessor, and is
it not plain that he would appraise the land values with much greater
certainty and cheapness than he could appraise the values of all kinds
of property? With a plot map before him he might fairly make every appraisement
without leaving his desk at the town hall.
And there would be no material difference if the property
in question were a farm instead of a building lot. A competent farmer
or business man in a farming community can, without leaving his own door-yard,
appraise the value of the land of any farm there; whereas it would be
impossible for him to value the improvements, stock, produce, etc., without
at least inspecting them.
d. Equality
In respect of the fourth maxim the single tax bears more equally— that
is to say, more justly — than any other tax. It is the only tax that
falls upon the taxpayer in proportion to the pecuniary benefits he receives
from the public; 29 and its tendency, accelerating with the increase of the
tax, is to leave every one the full fruit of his own productive enterprise
and effort. 30
29 The benefits of government are not the only public
benefits whose value attaches exclusively to land. Communal development
from whatever cause produces the same effect. But as it is under the
protection of government that land-owners are able to maintain ownership
of land and through that to enjoy the pecuniary benefits of advancing
social conditions, government confers upon them as a class not only the
pecuniary benefits of good government but also the pecuniary benefits
of progress in general.
30. "Here are two men of equal incomes — that
of the one derived from the exertion of his labor, that of the other
from the rent of land. Is it just that they should equally contribute
to the expenses of the state? Evidently not. The income of the one represents
wealth he creates and adds to the general wealth of the state; the income
of the other represents merely wealth that he takes from the general
stock, returning nothing." — Progress and Poverty, book
viii, ch. iii, subd. 4.
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