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single tax

 
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n.

A system by which all revenue is derived from a tax on one thing, especially land.


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Britannica Concise Encyclopedia: single tax
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Tax on land values intended as the sole source of government revenues, replacing all existing taxes. Henry George proposed the single tax in his book Progress and Poverty (1879). The plan gained considerable support in subsequent decades but was never implemented. Advocates argued that since land is a fixed resource, the income it yields is a product of the economy's growth and not individual effort, and that it therefore can fairly be taxed to support the government. Critics protested that the single tax would take no account of an individual's ability to pay, since there is no correlation between land ownership and total wealth or income.

For more information on single tax, visit Britannica.com.

US History Encyclopedia: Single Tax
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The single tax is the name of a levy proposed by Henry George in his book Progress and Poverty, published in 1879. In place of all other taxes, George advocated a single tax that would appropriate for government use all rent on land. His proposal was intended as much more than a mere fiscal device; it was set forth as a vehicle for social reform.

On the ground that land was a gift of nature, not a product of human effort, George condemned private ownership of land, which he considered the cause of economic and social ills. Land values, he held, were attributable to social or community factors. The state, therefore, and not the individual, should be the beneficiary of these values and any increases therein. The single tax, George wrote, would do no less than abolish poverty, elevate morals, and "carry civilization to yet nobler heights." George was undoubtedly influenced by his years in California, where he had observed the speculation in land and the rapid rise in land values following the gold rush of 1849. He was not content merely to expound his views in writing. He made his single-tax plan the core of his unsuccessful campaigns for mayor of New York City in 1886 and 1897.

The single-tax program had but limited acceptance in the United States despite vigorous attempts to promote it through political campaigns, legislative action, and general publicity. The single-tax cause was aided by large financial contributions from the philanthropist Joseph Fels. In California in the early twentieth century, the single-tax plan came before the voters on seven occasions; each time it was rejected. Agitation for the single tax, or for a partial application of it, was also carried on in Oregon, Washington, Colorado, Missouri, New York, Pennsylvania, and Texas.

Bibliography

Barker, Charles A. Henry George. New York: Oxford University Press, 1955.

George, Henry. Progress and Poverty. New York: Robert Schalkenbach Foundation, 1979.

 
Columbia Encyclopedia: single tax
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single tax, any levy that serves as the government's only source of revenue. Generally, however, it is understood to mean a tax derived from economic rent and used as the sole source of public receipts. As such, it is based on the doctrine that land and the natural resources are the source of all wealth, and it corresponds substantially to the impôt unique of the 18th-century physiocrats. Basic to the theory is the belief that the land and its wealth belong to all. The most effective advocate of the single tax was Henry George, who held that economic rent tends to enrich the owner at the expense of the community and is thus the cause of poverty; he believed that by appropriating all (or nearly all) economic rent governments could wipe out social distress and even acquire a surplus without recourse to any other taxes. George's theories have had some influence on land taxation in Britain, several of the former dominions, the W United States, and several European nations.

Bibliography

See H. George, Progress and Poverty (1879).

Wikipedia: Georgism
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"Georgist" redirects here. For the Romanian political group, see National Liberal Party-Brătianu.
"Single tax" redirects here. For the monthly newspaper, see The Single Tax.

Georgism, named after Henry George (1839-1897), is a philosophy and economic ideology that holds that everyone owns what they create, but that everything found in nature, most importantly land, belongs equally to all of humanity. The Georgist philosophy is usually associated with the idea of a single tax on land. Georgists argue that a tax on land is efficient, fair and equitable, and can raise enough revenue so that other taxes (which are less efficient) can be reduced or eliminated.[1]

Contents

Main tenets

Henry George
See also: Land value tax

Henry George is best known for his argument that the economic rent from land should be shared equally by society rather than falling into hands of private individuals. The clearest statement of this view is found in Progress and Poverty: "We must make land common property."[2] Although this could be done by nationalizing land and then leasing it out, George preferred taxing unimproved land value, in part because this would be less disruptive and controversial in a country where land titles have already been granted to individuals. With the revenue from this "single tax", three possibilities arise: either the revenue can be used to fund the state or it can be redistributed to citizens as a pension or basic income, or it can be split between the first two options. If the first option were to be chosen, the state could avoid having to tax any other type of income, wealth or transactions. Although introducing a large land value tax would cause the value of land titles to fall significantly, George was uncompromising on the idea of compensation for landowners, seeing the issue as a parallel to the earlier debate about compensating former slave owners.

A supply and demand diagram showing the effects of land value taxation. Note that the burden of the tax falls entirely on the land owner, and there is no deadweight loss.

Georgists also argue that all of the economic rent (i.e., unearned income) collected from natural resources (land, mineral extraction, the broadcast spectrum, tradable emission permits, fishing quotas, airway corridor use, space orbits, etc.) and extraordinary returns from natural monopolies should go to the community rather than a private owner, and that no other taxes or burdensome economic regulations should be levied. In practice, the elimination of all other taxes implies a high land value tax, and a correspondingly sharp drop in the value of land ownership. Adam Smith first argued that there would be no change in land rental prices in his book The Wealth of Nations.[3].

Standard economic theory suggests that a land value tax would be extremely efficient – unlike other taxes, it does not reduce economic productivity.[4] The 1976 Nobel Memorial Prize winner Milton Friedman, agreed that Henry George's land tax is potentially beneficial because unlike other taxes, land taxes do not distort economic activity, and imposes no excess burden on the economy. A replacement of other more distortionary taxes with a land tax would thus improve economic welfare.[5] Additionally, a land value tax would be a tax on wealth, and so would tend to reduce income inequality, which would also improve economic welfare.

The idea of the earth as the common property of humanity has also resonated with modern-day environmentalists, and some have endorsed the idea of ecological tax reform as a replacement for command and control regulation. This would entail substantial taxes or fees for pollution, waste disposal and resource exploitation, or equivalently a cap and trade system where permits are auctioned to the highest bidder. This would also include taxes on the use of land and other natural resources.

Synonyms and variants

Most early advocacy groups described themselves as Single Taxers, and George endorsed this as being an accurate description of the movement's main political goal – the replacement of all taxes with a land value tax. In the modern era, some groups inspired by Henry George place more of an emphasis on environmentalism, while others place more emphasis on his ideas on economics.

As the world became economically more complex, and the government grew to become a larger part of the economy, an abrupt change to a single land value tax became correspondingly more difficult, and so the term "Georgist" has come into vogue. This more general term encompasses the idea of incremental changes towards the elimination of unjust and economically destructive taxes on economic activity, by recovering the economic rent from land for the benefit of the entire society.

Some adherents are not entirely satisfied with the label Georgist. Henry George is now little known and the idea of a single tax on land predates him. Some now use the term "Geoism", with the meaning of "Geo" deliberately ambiguous. "Earth Sharing", "Geoism", "Geonomics" and "Geolibertarianism" (see libertarianism) are also preferred by some Georgists; "Geoanarchism" is another one. These terms reflect a difference of emphasis, and sometimes real differences about how land rent should be spent (citizen's dividend or just replacing other taxes); but all agree that land rent should be recovered from its private recipients.

Influence

Several communities were founded along Georgist principles during the height of the movement's popularity. Two such communities that still exist are Arden, Delaware, which was founded in 1900 by Frank Stephens and Will Price, and Fairhope, Alabama, which was founded in 1894 under the auspices of the Fairhope Single Tax Corporation.

The German protectorate of Jiaozhou Bay (also known as Kiaochow) in China fully implemented Georgist policy. Its sole source of government revenue was the land value tax of six percent which it levied on its territory. The colony existed from 1898 until 1914.

In the UK in 1909, the Liberal Government of the day included a land tax as part of several taxes in the People's Budget aimed at redistributing wealth (including a graded income tax and an increase in inheritance tax). This caused a crisis which led indirectly to reform of the House of Lords. The budget was eventually passed - but without the land tax. George's ideas were also taken up to some degree in Australia, Hong Kong, Singapore, South Africa, South Korea, and Taiwan. In these countries, governments still levy some form of land value tax, albeit with exemptions.[6]

In Denmark, the Georgist Justice Party has previously been represented in Folketinget. It formed part of a centre-left government 1957-60 and was also represented in the European Parliament 1978-79.

In the 2004 Presidential campaign, Ralph Nader mentioned Henry George in his platform.[7]

Also in the U.S., the Lincoln Institute of Land Policy is based on the ideas of Henry George[8]

Hong Kong is perhaps the best example today of a successful implementation of a high land value tax. The Hong Kong government generates more than 35% of its revenue from land taxes.[9] Because of this, it can keep other taxes low or non-existent, and still maintain a budget surplus.

The periodical magazine Land&Liberty, established in 1894, is claimed by The American Journal of Economics and Sociology to be “the longest-lived Georgist project in history”.[10]

Criticism

Although both advocated for workers' rights, Henry George and Karl Marx were antagonists. Marx saw the Single Tax platform as a step backwards from the transition to communism. He argued that, "The whole thing is...simply an attempt, decked out with socialism, to save capitalist domination and indeed to establish it afresh on an even wider basis than its present one."[11] Marx also criticized the way land value tax theory emphasizes the value of land, arguing that, "His fundamental dogma is that everything would be all right if ground rent were paid to the state."[11]

On his part, Henry George predicted that if Marx's ideas were tried the likely result would be a dictatorship.[12] Fred Harrison provides a full treatment of Marxist objections to land value taxation and Henry George in "Gronlund and other Marxists - Part III: nineteenth-century Americas critics", American Journal of Economics and Sociology, (Nov 2003).[13]

More recent critics have claimed that increasing government spending has rendered a land tax insufficient to fully fund government, although the tax revenues would probably have been adequate for limited governments of the type that dominated during the period in which George was active. Also, George has been accused of exaggerating the importance of his "all-devouring rent thesis" in claiming that it is the primary cause of poverty and injustice in society. [14]

Georgism, which today is associated with left-libertarian thought, has endured criticism from those right-libertarians who believe that common land ownership would result in an infringement of the rights of self-ownership and individual property.

Predecessors

Those who expressed similar thoughts before Henry George include:

Famous Georgists

Notes

  1. ^ Land Value Taxation: An Applied Analysis, William J. McCluskey, Riël C. D. Franzsen
  2. ^ George, Henry (1879). "2". Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth. VI. http://www.econlib.org/library/YPDBooks/George/grgPP26.html. Retrieved 2008-05-12. 
  3. ^ The Wealth of Nations Book V, Chapter 2, Article I: Taxes upon the Rent of Houses:
    Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground. More or less can be got for it according as the competitors happen to be richer or poorer, or can afford to gratify their fancy for a particular spot of ground at a greater or smaller expense. In every country the greatest number of rich competitors is in the capital, and it is there accordingly that the highest ground-rents are always to be found. As the wealth of those competitors would in no respect be increased by a tax upon ground-rents, they would not probably be disposed to pay more for the use of the ground. Whether the tax was to be advanced by the inhabitant, or by the owner of the ground, would be of little importance. The more the inhabitant was obliged to pay for the tax, the less he would incline to pay for the ground; so that the final payment of the tax would fall altogether upon the owner of the ground-rent.
  4. ^ Land Value Taxation: An Applied Analysis, William J. McCluskey, Riël C. D. Franzsen
  5. ^ Foldvary, Fred E. "Geo-Rent: A Plea to Public Economists" (April 2005)
  6. ^ Gaffney, M. Mason. "Henry George 100 Years Later". Association for Georgist Studies Board. http://www.georgiststudies.org/george100years.html. Retrieved 2008-05-12. 
  7. ^ http://web.archive.org/web/20040828085138/http://www.votenader.org/issues/index.php?cid=7
  8. ^ http://www.lincolninst.edu/aboutlincoln/
  9. ^ "'Land Tax' and high land prices in Hong Kong". Policy Papers. Hong Kong Democratic Foundation. http://www.hkdf.org/pr.asp?func=show&pr=24. Retrieved 2008-05-12. 
  10. ^ The American Journal of Economics and Sociology, vol. 62, 2003, p. 615
  11. ^ a b Karl Marx - Letter to Friedrich Adolph Sorge in Hoboken
  12. ^ Henry George's Thought [1878822810] - $49.95 : Zen Cart!, The Art of E-commerce
  13. ^ 14 Gronlund and other Marxists - Part III: nineteenth-century Americas critics | American Journal of Economics and Sociology, The | Find Articles at BNET
  14. ^ Critics of Henry George
  15. ^ Are you a Real Libertarian, or a Royal Libertarian ::Furthermore, Locke based his scenario on pre-monetary societies, where a landholder would find that "it was useless, as well as dishonest, to carve himself too much, or take more than he needed." With the introduction of money, Locke noted, all land quickly became appropriated. Why? Because with money, those who can take more land than they have personal use for suddenly have reason to do so, as between them they will have taken all the land, and others will have to pay rent to them. So, with the introduction of money, the Lockean rationale for landed property falls apart, even according to Locke. And while Locke did not propose a remedy specifically for to this problem, he repeatedly stated that all taxes should be on real estate.
  16. ^ Principles of Political Economy Book 5 Chapter 2:
    The ordinary progress of a society which increases in wealth, is at all times tending to augment the incomes of landlords; to give them both a greater amount and a greater proportion of the wealth of the community, independently of any trouble or outlay incurred by themselves. They grow richer, as it were in their sleep, without working, risking, or economizing. What claim have they, on the general principle of social justice, to this accession of riches? In what would they have been wronged if society had, from the beginning, reserved the right of taxing the spontaneous increase of rent, to the highest amount required by financial exigencies?
  17. ^ http://www.wealthandwant.com/docs/Ogilvie_Essay_1782.html An Essay on the Right of Property in Land by William Ogilvie, of Pittensear, Professor of Humanity and Lecturer on Political and Natural History, Antiquities, Criticism, and Rhetoric in the University and King's College of Aberdeen 1782
  18. ^ Agrarian Justice paragraph 12:
    Every proprietor, therefore, of cultivated lands, owes to the community a ground-rent (for I know of no better term to express the idea) for the land which he holds; and it is from this ground-rent that the fund proposed in this plan is to issue.
  19. ^ The Wealth of Nations, Book V, Article I, "Taxes upon the Rent of Houses"
  20. ^ Social Statics Part 2 Chapter 9: The Right to the Use of the Earth
  21. ^ p684, The Story of Civilisation, Volume 1, "Our Oriental Heritage", Will Durant, Simon and Schuster, New York, 1942 (Tenth Printing)
  22. ^ Muse return with new album The Resistance "Sure, he has already launched into a passion­ate soliloquy about Geoism (the land-tax movement inspired by the 19th-century political econo­mist Henry George)".
  23. ^ http://en.wikisource.org/wiki/The_Devil%27s_Dictionary/L The Devil's Dictionary
  24. ^ http://www.wealthandwant.com/docs/Buckley_HG.html William F. Buckley, Jr. Transcript of an interview with Brian Lamb, CSpan Book Notes, April 2-3, 2000
  25. ^ Winston Churchill: Land Price as a Cause of Poverty
  26. ^ Transcript of a speech by Darrow on taxation
  27. ^ Transcript of 1942 interview with Henry Ford in which he says, "The time will come when not an inch of the soil, not a single crop, not even weeds, will be wasted. Then every American family can have a piece of land. We ought to tax all idle land the way Henry George said — tax it heavily, so that its owners would have to make it productive".
  28. ^ People's Budget
  29. ^ The Life of Henry George, Part 3 Chapter X1
  30. ^ Co-founder of the Henry George Club, Australia.
  31. ^ Arcas Cubero, Fernando: El movimiento georgista y los orígenes del Andalucismo : análisis del periódico "El impuesto único" (1911-1923). Málaga : Editorial Confederación Española de Cajas de Ahorros, 1980. ISBN 8450037840
  32. ^ Justice for Mumia Abu-Jamal
  33. ^ Andelson Robert V. (2000), Land-Value Taxation Around the World: Studies in Economic Reform and Social Justice Malden, MA:Blackwell Publishers, Inc. Page 359.
  34. ^ Spence, Alan (1993), Sun Yat Sen -- Revolutionary Land Reformer, Land & Liberty, July-August 1993
  35. ^ .Article on Tolstoy, Proudhon and George. Count Tolstoy once said of George, "People do not argue with the teaching of George, they simply do not know it".
  36. ^ Archimedes[1], an article originally bylined "Twark Main"
  37. ^ "Oregon Biographies: William S. U'Ren" (HTML). Oregon History Project. Portland, Oregon: Oregon Historical Society. 2002. http://www.ohs.org/education/oregonhistory/Oregon-Biographies-William-Uren.cfm. Retrieved 2006-12-29. 
  38. ^ Bill Vickrey - In Memoriam

See also

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Dictionary. The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2007, 2000 by Houghton Mifflin Company. Updated in 2009. Published by Houghton Mifflin Company. All rights reserved.  Read more
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