EVOCATIONS OF HENRY GEORGE’S SINGLE TAX
“It would require no less than the fingers of the two hands to enumerate those who, from Plato down, rank with Henry George among the world’s social philosophers…. No man, no graduate of a higher educational institution, has a right to regard himself as an educated man in social thought unless he has some first-hand acquaintance with the theoretical contribution of this great American thinker.” John Dewey, educator and philosopher.
“What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power. This same tendency, operating with increasing force, is observable in our civilization today, showing itself in every progressive community, and with greater intensity the more progressive the community. Wages and interest tend constantly to fall, rent to rise, the rich become very much richer, the poor to become more helpless and hopeless, and the middle class to be swept away.” Henry George (1839-1897).
Arthur Rybeck, Jr., president of Mountaineers United for Sane Taxation, advocates a two-rate tax structure in a column in the January 31 edition of the Gazette. Here is a pertinent paragraph: “Columbia University economics professor emeritus Lowell Harriss notes that when a community builds a bridge or improves fire protection, nearby property values rise. When society thirsts for more energy, the value of coal, gas and oils sites rise. What could be fairer, Harriss asks, than to recycle values created by society back to society via a land tax? If they are not recaptured, government must get revenue from production—highly taxing wages and profits.
“Land speculator and land hoarders object to shifting taxes onto land values. It blocks their reaping windfall gains created by public improvements and adjacent businesses.”
Henry George would applaud Rybeck and Harriss; for they are advocating in modified form what George proposed in his monumental classic, “Progress and Poverty,” published in 1879 and acclaimed as one of the greatest gospels of social justice.
If I had acquired ten acres at a crossroad fifty years ago, I would have a monopoly of sorts, for there is no other ten acres just like it. If the state decided to build a highway and an interchange adjoining my ten acres, the value of it would skyrocket. I could lease it for a rent that for one month probably would be higher than I originally paid for the property or I could sell it for a hundred times what I paid for it and pay only a capital gain tax of 15%. I have added no value to the property. The state added the value by building the highway. But I am enriched for doing nothing.
Labor and capital produce wealth. But they must have land on which to do it. If the land is owned by someone else, he can charge rent and the rent will go up as the value created by labor and capital increases. The renter does little but reckon his income.
George knew that state ownership of land would never be tolerated, so he proposed that the state confiscate all unearned increment of land values as a single tax: “What I, therefore, propose, as the simple yet sovereign remedy, which will raise wages, increase the earnings of capital, extirpate pauperism, abolish poverty, give remunerative employment to whoever wishes it, afford free scope to human powers, lessen crime, elevate morals, and taste, and intelligence, purify government and carry civilization to yet nobler heights, is—to appropriate rent by taxation.”
Rybeck: “Yet speculators simply follow current rules of the game—rules imposing high risks and high taxes for enterprise but little risks or costs for reaping what others sow. Looking for villains?”
The villains are those who make the laws. The tax code allows a taxpayer who makes a million by selling real estate for which he paid a thousand, and sat on his behind, to be taxed on the difference at the rate of 15% or less and then taxes an individual who earns a million in wages 30% or so. And also the villains are those who speculate instead of work, who buy and sell with a view to buying cheap and selling dear— as a career. They live from the value, created by labor and capital, that they appropriate either by rent or sale. They never create anything and they devise their real estate to their heirs who continue to live on rent and often live high on it. Few allege that such an arrangement corrupts heirs but many allege that welfare corrupts the poor.
I suspect that not one of the members of the current WV legislature has read “Progress and Poverty” and few have even heard of the book or Henry George. I also guess that George Bush never read the book or heard of it and I am certain as I am alive that he would not agree with Henry George’s social remedy, nor would any other conservative. Henry George has been a prophet without honor in his own country. His economic truth if enacted into law would be too much economic justice for a capitalist country to stomach.
Further, I suspect that Dr. Rybeck will learn that even his modest two-tax proposal for economic justice is too much justice for the legislature to enact. In fact, I suspect there will be talk of sinister socialism and even of evil communism in the back rooms. Who wants to reduce the chances of buying cheap and selling dear or collecting rent, the value of which has increased enormously owing to a bridge or a highway? It’s un-American to even consider such a proposal.