Still surprised at how many Georgists believe Henry George was advocating a property tax on the current market or rental value of land just because he sometimes loosely used the words “land value,” such as when he said “[We shall] abolish all taxation save that upon land values.” Here, just from Progress and Poverty (1879) alone, not to mention his many other works, I’d like to list several places where George shows that he associates the words “land values” with “economic rent” or the unearned increase in land value. He’s not talking about the land owner’s cost basis in the land parcel, nor about the overall current market land value, but only about the part of current market value which may be economic rent or unearned gain, or in other words, the part of land value that the landowner “earned in his sleep.” As I’ve mentioned before, people wanting to learn about Georgism would be a lot less confused if we used the phrase “economic rent tax” (ERT) instead of “land value tax” (LVT). This would also make it easier for people to understand that George also wanted to tax economic rents or unearned gains from capital and labor, in addition to economic rents from land. Anyway, the following numbers refer to book, chapter and paragraph in Progress and Poverty, and I added emphasis in caps. econlib.org/library/YPDBooks/George/grgPP.html 3.2.4 “Thus RENT or LAND VALUE does not arise from the productiveness or utility of land. It in no wise represents any help or advantage given to production, but simply the power of securing a part of the results of production.” 3.8.8 “And the facts agree with the inference. Though neither wages nor interest anywhere increase as material progress goes on, yet the invariable accompaniment and mark of material progress is the INCREASE OF RENT—the RISE of LAND VALUES. 3.8.12 “In short, the value of land depending wholly upon the power which its ownership gives of appropriating wealth created by labor, the INCREASE of LAND VALUES is always at the expense of the value of labor. And, hence, that the increase of productive power does not increase wages, is because it does INCREASE the VALUE OF LAND. RENT swallows up the whole GAIN and pauperism accompanies progress. 4.3.22 “And, as is well known, the RISE in RENT or LAND VALUES corresponds with the reduction in the charges.” 4.4.3 “That cause is the confident expectation of the future ENHANCEMENT of LAND VALUES, which arises in all progressive countries from the steady INCREASE of RENT, and which leads to speculation, or the holding of land for a higher price than it would then otherwise bring.” 5.1.24 “And that obstacle, it is clear, is the speculative advance in RENT, or the VALUE OF LAND, which produces the same effects as (in fact, it is) a lock-out of labor and capital by land owners.” 5.1.41 “There is one thing which, it may seem, I have overlooked, in attributing these industrial depressions to the speculative advance of RENT or LAND VALUES as a main and primary cause.” 5.1.46 The manner in which the sufficient cause to which I have traced them explains the main features of these industrial depressions is in striking contrast with the contradictory and self-contradictory attempts which have been made to explain them on the current theories of the distribution of wealth. That a speculative advance in RENT or LAND VALUES invariably precedes each of these seasons of industrial depression is everywhere clear. That they bear to each other the relations of cause and effect, is obvious to whosoever considers the necessary relations between land and labor. 5.2.28 RENT; the VALUE OF LAND. Go, get yourself a piece of ground, and hold possession. 8.2.17 “Now, insomuch as the taxation of RENT, or LAND VALUES, must necessarily be increased just as we abolish other taxes, we may put the proposition into practical form by proposing—To abolish all taxation save that upon LAND VALUES.” 8.3.9 “But all other monopolies are trivial in extent as compared with the monopoly of land. And the VALUE OF LAND expressing a monopoly, pure and simple, is in every respect fitted for taxation. That is to say, while the value of a railroad or telegraph line, the price of gas or of a patent medicine, may express the price of monopoly, it also expresses the exertion of labor and capital; but the VALUE OF LAND, or ECONOMIC RENT, as we have seen, is in no part made up from these factors, and expresses nothing but the advantage of appropriation. Taxes levied upon the VALUE OF LAND cannot check production in the slightest degree, until they exceed RENT, or the VALUE OF LAND taken annually for unlike taxes upon commodities, or exchange, or capital, or any of the tools or processes of production, they do not bear upon production. The VALUE OF LAND does not express the reward of production, as does the value of crops, of cattle, of buildings, or any of the things which are styled personal property and improvements. It expresses the exchange value of monopoly. It is not in any case the creation of the individual who owns the land; it is created by the growth of the community. Hence the community can take it all without in any way lessening the incentive to improvement or in the slightest degree lessening the production of wealth. Taxes may be imposed upon the VALUE OF LAND until all rent is taken by the State, without reducing the wages of labor or the reward of capital one iota; without increasing the price of a single commodity, or making production in any way more difficult.” 8.4.1 “The grounds from which we have drawn the conclusion that the tax on LAND VALUES or RENT is the best method of raising public revenues have been admitted expressly or tacitly by all economists of standing, since the determination of the nature and law of rent.” 8.4.9 The only objection to the tax on RENT or LAND VALUES which is to be met with in standard politico-economic works is one which concedes its advantages—for it is, that from the difficulty of separation, we might, in taxing the rent of land, tax something else. McCulloch, for instance, declares taxes on the rent of land to be impolitic and unjust because the return received for the natural and inherent powers of the soil cannot be clearly distinguished from the return received from improvements and meliorations, which might thus be discouraged. 9.1.7 “For the more that labor and capital produce, the greater grows the common wealth in which all may share. And in the [LAND] VALUE or RENT OF LAND is this general gain expressed in a definite and concrete form. Here is a fund which the state may take while leaving to labor and capital their full reward. With increased activity of production this would commensurately increase.” 9.1.8 “And to shift the burden of taxation from production and exchange to the [LAND] VALUE or RENT OF LAND would not merely be to give new stimulus to the production of wealth; it would be to open new opportunities. For under this system no one would care to hold land unless to use it, and land now withheld from use would everywhere be thrown open to improvement.”
Posted on: Fri, 26 Dec 2014 01:59:48 +0000
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