Joseph Stiglitz, from an interview with Greg Palast (online at http://www.gregpalast.com/the-globalizer-who-came-in-from-the-cold):
So then I turned on Stiglitz. OK, Mr Smart-Guy Professor, how would you
help developing nations? Stiglitz proposed radical land reform, an attack
at the heart of “landlordism,” on the usurious rents charged
by the propertied oligarchies worldwide, typically 50% of a tenant’s
crops. So I had to ask the professor: as you were top economist at the World
Bank, why didn’t the Bank follow your advice?
“If you challenge [land ownership], that would be a change in the
power of the elites. That’s not high on their agenda.” Apparently
I took away from my talks with the professor that the solution to world
poverty and crisis is simple: remove the bloodsuckers.
Thomas Flavin, writing in The
Now, it is quite true that all taxes of whatever nature are paid out of
the products of labor. But must they be for that reason a tax on labor products.
Let us see.
I suppose you won't deny that a unit of labor applies to different kinds
of land will give very different results. Suppose that a unit of labor produces
on A's land 4, on B's 3, on C's 2 and on D's 1. A's land is the most, and
D's is the least, productive land in use in the community to which they belong.
B's and C's represent intermediate grades. Suppose each occupies the best
land that was open to him when he entered into possession. Now, B, and C,
and D have just as good a right to the use of the best land as A had.
Manifestly then, if this be the whole story, there cannot be equality of
opportunity where a unit of labor produces such different results, all other
things being equal except the land.
How is this equality to be secured? There is but one possible way. Each
must surrender for the common use of all, himself included, whatever advantages
accrues to him from the possession of land superior to that which falls to
the lot of him who occupies the poorest.
In the case stated, what the unit of labor produces for D, is what it should
produce for A, B and C, if these are not to have an advantage of natural
opportunity over D.
Hence equity is secured when A pays 3, B, 2 and C, 1 into a common fund
for the common use of all — to be expended, say in digging a well,
making a road or bridge, building a school, or other public utility.
Is it not manifest that here the tax which A, B and C pay into a common
fund, and from which D is exempt, is not a tax on their labor products (though
paid out of them) but a tax on the superior advantage which they enjoy over
D, and to which D has just as good a right as any of them.
The result of this arrangement is that each takes up as much of the best
land open to him as he can put to gainful use, and what he cannot so use
he leaves open for the next. Moreover, he is at no disadvantage with the
rest who have come in ahead of him, for they provide for him, in proportion
to their respective advantages, those public utilities which invariably arise
wherever men live in communities. Of course he will in turn hold to those
who come later the same relation that those who came earlier held to him.
Suppose now that taxes had been levied on labor products instead of land;
all that any land-holder would have to do to avoid the tax is to produce
little or nothing. He could just squat on his land, neither using it himself
nor letting others use it, but he would not stop at this, for he would grab
to the last acre all that he could possibly get hold of. Each of the others
would do the same in turn, with the sure result that by and by, E, F and
G would find no land left for them on which they might make a living.
So they would have to hire their labor to those who had already monopolized
the land, or else buy or rent a piece of land from them. Behold now the devil
of landlordism getting his hoof on God's handiwork! Exit justice, freedom,
social peace and plenty. Enter robbery, slavery, social discontent, consuming
grief, riotous but unearned wealth, degrading pauperism, crime breeding,
want, the beggar's whine, and the tyrant's iron heel.
And how did it all come about? By the simple expedient of taxing labor products
in order that precious landlordism might laugh and grow fat on the bovine
stupidity of the community that contributes its own land values toward its
And yet men vacuously ask, "What difference does it make?"
O tempora! O mores! To be as plain as is necessary, it makes this four-fold
- First, it robs the community of its land values;
- second, it robs labor of its wages in the name of taxation;
- third, it sustains and fosters landlordism, a most conspicuously damnable
- fourth, it exhibits willing workers in enforced idleness; beholding their
families in want on the one hand, and unused land that would yield them
abundance on the other.
This last is a difference that cries to heaven for vengeance, and if it
does not always cry in vain, will W. C. Brann be able to draw his robe close
around him and with a good conscience exclaim, "It's none of my fault;
I am not my brother's keeper."
Robert H. Browne: Abraham Lincoln
and the Men of His Time
“Christ knew better than we that 'No man having put his hand to the
plow and looking back is fit for the kingdom of God;' nor is many man doing
his duty who shrinks and is faithless to his fellow-men. Now a word more
about Abolitionists and new ideas in Government, whatever they may be: We
are all called Abolitionists now who desire any restriction of slavery or
believe that the system is wrong, as I have declared for years. We are called
so, not to help out a peaceful solution, but in derision, to abase us, and
enable the defamers to make successful combinations against us. I never was
much annoyed by these, less now than ever. I favor the best plan to restrict
the extension of slavery peacefully, and fully believe that we must reach
some plan that will do it, and provide for some method of final extinction
of the evil, before we can have permanent peace on the subject. On other
questions there is ample room for reform when the time comes; but now it
would be folly to think that we could undertake more than we have on hand. But
when slavery is over with and settled, men should never rest content while
oppressions, wrongs, and iniquities are in force against them.
“The land, the earth that God gave to man for his home, his sustenance,
and support, should never be the possession of any man, corporation, society,
or unfriendly Government, any more than the air or the water, if as much.
An individual company or enterprise requiring land should hold no more in
their own right than is needed for their home and sustenance, and never more
than they have in actual use in the prudent management of their legitimate
business, and this much should not be permitted when it creates an exclusive
monopoly. All that is not so used should be held for the free use of every
family to make homesteads, and to hold them as long as they are so occupied.
“A reform like this will be worked out some time in the future.
The idle talk of foolish men, that is so common now, on 'Abolitionists,
agitators, and disturbers of the peace,' will find its way against it,
with whatever force it may possess, and as strongly promoted and carried
on as it can be by land monopolists, grasping landlords, and the titled
and untitled senseless enemies of mankind everywhere.” ... read
Henry George: The Condition
of Labor — An
Open Letter to Pope Leo XIII in response to Rerum Novarum (1891)
Your use, in so many passages of your Encyclical, of the inclusive term “property” or “private” property,
of which in morals nothing can be either affirmed or denied, makes your
meaning, if we take isolated sentences, in many places ambiguous. But
reading it as a whole, there can be no doubt of your intention that private
property in land shall be understood when you speak merely of private
property. With this interpretation, I find that the reasons you urge
for private property in land are eight. Let us consider them in order
of presentation. You urge:
1. That what is bought with rightful property is rightful property.
(RN, paragraph 5) ...
2. That private property in land proceeds from man’s gift of reason.
(RN, paragraphs 6-7.) ...
3. That private property in land deprives no one of the use of land.
(RN, paragraph 8.) ...
4. That Industry expended on land gives ownership in the land itself.
(RN, paragraphs 9-10.) ...
5. That private property in land has the support of the common opinion
of mankind, and has conduced to peace and tranquillity, and that it is
sanctioned by Divine Law. (RN, paragraph 11.) ...
6. That fathers should provide for their children and that private property
in land is necessary to enable them to do so. (RN, paragraphs 14-17.)
7. That the private ownership of land stimulates industry, increases
wealth, and attaches men to the soil and to their country. (RN, paragraph
8. That the right to possess private property in land is from nature,
not from man; that the state has no right to abolish it, and that to
take the value of landownership in taxation would be unjust and cruel
to the private owner. (RN, paragraph 51.) ...
4. That Industry expended on land gives ownership in
the land itself. (9-10.)
Your Holiness next contends that industry expended on land gives a right
to ownership of the land, and that the improvement of land creates benefits
indistinguishable and inseparable from the land itself.
This contention, if valid, could only justify the ownership of land
by those who expend industry on it. It would not justify private property
in land as it exists. On the contrary, it would justify a gigantic no-rent
declaration that would take land from those who now legally own it, the
landlords, and turn it over to the tenants and laborers. And if it also
be that improvements cannot be distinguished and separated from the land
itself, how could the landlords claim consideration even for improvements
they had made?
But your Holiness cannot mean what your words imply. What you really
mean, I take it, is that the original justification and title of landownership
is in the expenditure of labor on it. But neither can this justify private
property in land as it exists. For is it not all but universally true
that existing land titles do not come from use, but from force or fraud?
Take Italy! Is it not true that the greater part of the land of Italy
is held by those who so far from ever having expended industry on it
have been mere appropriators of the industry of those who have? Is this
not also true of Great Britain and of other countries? Even in the United
States, where the forces of concentration have not yet had time fully
to operate and there has been some attempt to give land to users, it
is probably true today that the greater part of the land is held by those
who neither use it nor propose to use it themselves, but merely hold
it to compel others to pay them for permission to use it.
And if industry give ownership to land what are the limits of this ownership?
If a man may acquire the ownership of several square miles of land by
grazing sheep on it, does this give to him and his heirs the ownership
of the same land when it is found to contain rich mines, or when by the
growth of population and the progress of society it is needed for farming,
for gardening, for the close occupation of a great city? Is it on the
rights given by the industry of those who first used it for grazing cows
or growing potatoes that you would found the title to the land now covered
by the city of New York and having a value of thousands of millions of
But your contention is not valid. Industry expended on land gives ownership
in the fruits of that industry, but not in the land itself, just as industry
expended on the ocean would give a right of ownership to the fish taken
by it, but not a right of ownership in the ocean. Nor yet is it true
that private ownership of land is necessary to secure the fruits of labor
on land; nor does the improvement of land create benefits indistinguishable
and inseparable from the land itself. That secure possession is necessary
to the use and improvement of land I have already explained, but that
ownership is not necessary is shown by the fact that in all civilized
countries land owned by one person is cultivated and improved by other
persons. Most of the cultivated land in the British Islands, as in Italy
and other countries, is cultivated not by owners but by tenants. And
so the costliest buildings are erected by those who are not owners of
the land, but who have from the owner a mere right of possession for
a time on condition of certain payments. Nearly the whole of London has
been built in this way, and in New York, Chicago, Denver, San Francisco,
Sydney and Melbourne, as well as in continental cities, the owners of
many of the largest edifices will be found to be different persons from
the owners of the ground. So far from the value of improvements being
inseparable from the value of land, it is in individual transactions
constantly separated. For instance, one-half of the land on which the
immense Grand Pacific Hotel in Chicago stands was recently separately
sold, and in Ceylon it is a not infrequent occurrence for one person
to own a fruit-tree and another to own the ground in which it is implanted.
There is, indeed, no improvement of land, whether it be clearing, plowing,
manuring, cultivating, the digging of cellars, the opening of wells or
the building of houses, that so long as its usefulness continues does
not have a value clearly distinguishable from the value of the land.
For land having such improvements will always sell or rent for more than
similar land without them.
If, therefore, the state levy a tax equal to what the land irrespective
of improvement would bring, it will take the benefits of mere ownership,
but will leave the full benefits of use and improvement, which the prevailing
system does not do. And since the holder, who would still in form continue
to be the owner, could at any time give or sell both possession and improvements,
subject to future assessment by the state on the value of the land alone,
he will be perfectly free to retain or dispose of the full amount of
property that the exertion of his labor or the investment of his capital
has attached to or stored up in the land.
Thus, what we propose would secure, as it is impossible in any other
way to secure, what you properly say is just and right — ”that
the results of labor should belong to him who has labored.” But
private property in land — to allow the holder without adequate
payment to the state to take for himself the benefit of the value that
attaches to land with social growth and improvement — does take
the results of labor from him who has labored, does turn over the fruits
of one man’s labor to be enjoyed by another. For labor, as the
active factor, is the producer of all wealth. Mere ownership produces
nothing. A man might own a world, but so sure is the decree that “by
the sweat of thy brow shalt thou eat bread,” that without labor
he could not get a meal or provide himself a garment. Hence, when the
owners of land, by virtue of their ownership and without laboring themselves,
get the products of labor in abundance, these things must come from the
labor of others, must be the fruits of others’ sweat, taken from
those who have a right to them and enjoyed by those who have no right
The only utility of private ownership of land as distinguished from
possession is the evil utility of giving to the owner products of labor
he does not earn. For until land will yield to its owner some return
beyond that of the labor and capital he expends on it — that is
to say, until by sale or rental he can without expenditure of labor obtain
from it products of labor, ownership amounts to no more than security
of possession, and has no value. Its importance and value begin only
when, either in the present or prospectively, it will yield a revenue — that
is to say, will enable the owner as owner to obtain products of labor
without exertion on his part, and thus to enjoy the results of others’ labor.
What largely keeps men from realizing the robbery involved in
private property in land is that in the most striking cases the robbery
of individuals, but of the community. For, as I have before explained,
it is impossible for rent in the economic sense — that value which
attaches to land by reason of social growth and improvement — to
go to the user. It can go only to the owner or to the community. Thus
those who pay enormous rents for the use of land in such centers as London
or New York are not individually injured. Individually they get a return
for what they pay, and must feel that they have no better right to the
use of such peculiarly advantageous localities without paying for it
than have thousands of others. And so, not thinking or not caring for
the interests of the community, they make no objection to the system.
It recently came to light in New York that a man having no title whatever
had been for years collecting rents on a piece of land that the growth
of the city had made very valuable. Those who paid these rents had never
stopped to ask whether he had any right to them. They felt that they
had no right to land that so many others would like to have, without
paying for it, and did not think of, or did not care for, the rights
of all. ... read the whole letter
Louis Post: Outlines of Louis F.
with Illustrative Notes and Charts (1894)
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
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
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,
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
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
"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
Q62. If the ownership of land is immoral is it not the duty of individuals
who see its immorality to refrain from profiting by it?
A. No. The immorality is institutional, not individual. Every member of a community
has a right to land and an interest in the rent of land. Under the single tax
both rights would be conserved. But under existing social institutions the only
way of securing either is to own land and profit by it. To refrain from doing
so would have no reformatory effect. It is one of the eccentricities of narrow
minds to believe or profess to believe that institutional wrongs and individual
wrongs are upon the same plane and must be cured in the same way — by individual
reformation. But individuals cannot change institutions by refraining from profiting
by them, any more than they could dredge a creek by refraining from swimming
in it. Institutional wrongs must be remedied by institutional reforms. ... read the book
Charles B. Fillebrown: A
of Natural Taxation, from Principles of
Natural Taxation (1917)
Q22. What is privilege?
A. Strictly defined, privilege is, according to the Century Dictionary, "a
special and exclusive power conferred by law on particular persons or classes
of persons and ordinarily in derogation of the common right."
Q23. What is today the popular conception of privilege?
A. That it is the law-given power of one man to profit at another man's expense.
Q24. What are the principal forms of privilege?
A. The appropriation by individuals, or by public service corporations, of
the net rent of land created by the growth and activity of the community
without payment for the same. Also, the less important privileges connected
with patents, tariff, and the currency.
Q25. Where in does privilege differ from capital?
A. Capital is a material thing, a product of labor, stored-up wages; an instrument
of production paid for in human labor, and destined to wear out. Capital
is the natural ally of labor, and is harmless except as allied to privilege.
Privilege is none of these, but is an intangible statutory power, an unpaid-for
and perpetual lien upon the future labor of this and succeeding generations.
Capital is paid for and ephemeral. Privilege is unpaid for and eternal. A
man accumulated in his profession $5,000 capital, which he invested in land
in Canada. Ten years later he sold the same land for $200,000. Here is an
instance of $5,000 capital allied with $195,000 privilege. This illustrates
that privilege and not capital is the real enemy of labor.
Q26. How may franchises be treated?
A. Franchise privileges may be abated, or gradually abolished by lower rates,
or by taxation, or by both, in the interest of the community.
Q27. Why should privilege be especially taxed?
A. Because such payment is fairly due from grantee to the grantor of privilege
and also because a tax upon privilege can never be a burden upon industry
or commerce, nor can it ever operate to reduce the wages of labor or increase
prices to the consumer.
Q28. How are landlords privileged?
A. Because, in so far as their land tax is an "old" tax,
it is a burdenless tax, and because their buildings' tax is shifted upon their
most landlords who let land and also the tenement houses and business blocks
thereon avoid all share in the tax burden.
Q29. How does privilege affect the distribution of wealth?
A. Wealth as produced is now distributed substantially in but two channels,
privilege and wages. The abolition of privilege would leave but the one proper
channel, viz., wages of capital, hand, and brain.
Q28. How are landlords privileged?
A. Because, in so far as their land tax is an "old" tax, it
is a burdenless tax, and because their buildings' tax is shifted upon
their tenants; most landlords who let land and also the tenement houses
and business blocks thereon avoid all share in the tax burden.
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