The Tax To End All Taxes

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Yet interest in the ideas Henry George expounded has been rising in recent years. That interest spans the range from his method of taxing land to his philosophical view of humanity’s relation to nature. Many economists and urban experts, though they do not often invoke his name, now believe he was right about taxing land rather than the improvements on the land. Shifting the property tax (which now taxes both equally) all or mostly onto the land itself would benefit both the decaying city and the vanishing countryside. The tax would act on the landowner as both stick and carrot. In and around the cities, where vast amounts of potentially valuable land are vacant or underused, a high tax on land value would force the landowner to put it to its most economic use, while less or no tax on buildings would reduce or remove the present penalty he pays for improving the property. This is land that, being strategically located in terms of transportation, should be used intensively: that’s why a city grew up there in the first place. Since there is only so much demand for factories and stores and homes, the more intensive use of the best-located land would reduce the pressure on outlying areas. Thus, in the country, the land tax would discourage the phenomenon of sprawl, so costly in land and energy and money, and save some of the acres now disappearing under the suburban bulldozer. Some, not all: people have to live and work somewhere, so the most desirable land now farmed (and often in fact held for speculation) would go to other, more intensive uses. Rut because the high tax on the most valuable land would encourage thrifty use of it, much larger amounts of land would be saved for open space or agriculture.

 

The patterns of land use, which in large measure shape our lives, would become more varied—more intensive use here, more open space there—in place of the even spread of the usual suburb. Less land would be used, and other great savings would result: fewer highways, fewer utility lines, less fuel spent on auto travel, less air pollution. This sort of human settlement lends itself to mass transit—an obvious goal of any rational energy-saving policy—and a variant of George’s land tax would provide the means to pay for it. Any new transportation line causes an increase in land value along its routes that often exceeds the cost of its construction. This windfall is completely unearned by the property owners who receive it; this is, in fact, a dramatic case of community-created land value. A Georgist would look to that windfall, not to taxes imposed on the general public, as the best and fairest source of money to pay for new transportation lines.

In less strictly economic terms, George’s vision of assuring both freedom and fairness in access to natural resources is particularly appealingtoday. Any reader of Progress and Poverty can figure out how George would answer the pressing questions ofourtimcs. Instead of trying to prevent pollution by regulation, he would tax polluters heavily enough to motivate them to clean up their messes. He would allow private enterprise to mine minerals and oil and other fossil fuels, but he would tax away that part of the profit due to exclusive access to the gifts of nature. Doubtless he would apply the same principle in the developing debate over mining the ocean floor, taxing in this case for the benefit of all humanity—an attractive alternative to mining for the benefit only of multinational monopolies or authoritarian governments or incompetent international agencies. Ucyond that, George’s view of the world around us as a trust to be preserved rather than a conquest to be looted is in harmony with our growing awareness of the limits of nature. In this most profound sense—that we are all tenants on this earth, and owe rent for how we use and misuse it—Henry George speaks to the present and the future quite as eloquently as he did to the past.