“Ah Love! could you and I with Him conspire To grasp this sorry Scheme of Things entire, Would not we shatter it to bits—and then Re-mold it nearer to the Heart’s Desire!”
Ann Althouse posts a righteous takedown of Herman Cain and his so-called 9-9-9 tax plan here.
There has never been a saner and simpler proposal for tax reform than the “single tax” on the unimproved value of land proposed by Henry George. The honest progressive and the honest capitalist alike would find in it, if they looked, a facilitator of their respective instincts. Most importantly, in stark contrast to the abomination that is “our” politician-created tax “code,” the “single tax” has its sure foundation in Justice, as illuminated by, among others, Thomas Paine.
Combine the “single tax” with Thomas Jefferson’s “ward system” and you have my political philosophy in a nutshell.
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John,
I read the article by George, and I quite readily agree that it’s a much better system than what the government imposes now (and, for that matter what Cain proposes). But I have to ask, why stop at land if the basis for the tax is the distinction between unearned value and that value which arises from one’s improvement of the land? There are three factors of production—land, labor, and capital. And while I don’t know about how to separate out the “natural” or unearned value from capital (I’m not claiming it’s impossible, however), I think that one’s God-given talents are analogous to the “unearned increment from land values.”
Take Michael Jordan for example. Doubtless he worked hard to improve on his natural gifts, and a Georgist would rightly protest taxing his labor. But what about taxing him only to the extent of his unimproved body, skills, competitiveness and the like?
1Ryan,
First of all, I feel like a total bum for failing to congratulate you on your passing the bar. So a belated Congratulations! is in order.
I think it’s a valid criticism of the “single tax” to point out that determining the unimproved value of land as distinct from the improvements thereon is not quite as simple as determining the sum of 2+2, and that this determination would presumably need to be made by human appraisers. For example, imagine that a company invests a huge amount of capital to build an amusement park in an undeveloped area thirty minutes from the outskirts of a city. This leads to the development of other businesses and housing on the outskirts of the amusement park and a large increase in population in the area. Now the land on which the amusement park sits is enormously valuable even apart from the roller coasters etc. which sit on it. But since the land on which the amusement park sits was formerly of little value, isn’t the capital used to build the amusement park responsible for the large increase in the land’s value, and wouldn’t taxing the land value created by that capital in a sense be taxing that capital, contrary to Georgist principles? I’m not terribly troubled by this ambiguity. The contribution of a land holder to the defense of a territory should arguably be related to the value of his holdings, including the capital thereon, since not only the value of the land but the capital thereon creates an incentive for invasion. So I’m not terribly concerned if some part of capital is indirectly taxed through the “single tax.” The Articles of Confederation based the contribution of each colony on the total value of their respective real estate, improvements included.
The difficulty of distinguishing earned from unearned value is magnified ten-fold if we were to try to distinguish between an individual’s God-given talents and what he does with those talents, and style the latter earned and the former unearned. Furthermore, God in his wisdom has given people unequal natural gifts, and it’s not for us to take from others what God has given them. The same can’t be said for land.
2John,
Thanks for the well wishes. I’m glad to have that experience in the rearview mirror.
As for Georgism, I have to admit, I find it intriguing—even more so when combined with Jefferson’s ward system. Actually, I think the ward system (which sounds a lot like Michael Rozeff’s panarchy) would be essential for a single tax regime, for it would more likely keep closed the door to statism by making the wards compete for citizens.
Still, the ward system worries me a little because the political class—that is, those that have the power to tax, taken collectively—has a knack for finding ways to expand its jurisdiction. It’s for this reason that I’m partial to Hans Hoppe’s notion of a private law society. Under his conception, security is provided on a subscription basis instead of on a jurisdictional basis. This takes a so-called “public good” like security and moves it into the private sphere, thereby eliminating the need for taxation. I have to think that by taking away the two hallmarks of Statism—taxation and jurisdiction—freedom would flourish.
3I’m not sure that even under conditions of “anarchy,” or a state of nature, that we could get away from the need for territorial defense, security, and “government.” A single landlord, or landholder, is in a sense a “government,” claiming jurisdiction over a particular territory, and having the need to secure his claim. By what right would he maintain his claim? I’d suggest that Georgism might form the conditions for establishing the justice of his claim vis-a-vis other landholders and would-be landholders in the immediate area, as well as the fund by which the people in that area might defend their claims relative to each other and relative to external threats. The need for so-called “national defense” is to my mind the strongest objection to anarchism (though I’d clarify it’s not so much the need to defend the “nation” as it is to defend a would-be anarchic territory from existing nations). The anarchic impulse, and the impulse of the ward system, is to devolve the authority and responsibility for such defense to smaller and smaller areas, ultimately vesting it in the individual landholders themselves, who would likely find it advisable to confederate with others for their mutual defense, keeping their confederacies as small as is consistent with the needs of territorial defense (recognizing that the larger the confederacy and the more concentrated its power the larger the threat to the freedoms of its constituents). As I see it, these base-line confederacies formed strictly for territorial defense could co-exist with the kinds of associations and private law systems envisioned by Rozeff’s panarchy.
I have to credit “Our Enemy, the State,” by Albert Jay Nock, who considered himself an anarchist, for selling me on both Georgism and Jefferson’s “ward system.”
4Talent can be cultivated, like land, but it belongs to the possessor. Divine right, apparently. Talent reminds me of all those words laying unread in all the books in all the libraries and even in the rest of the book one might be reading. Just sitting there, waiting, unused. Why? That talent belongs to all those people all over the world too busy paying the rent all their lives (for the land to which they have just as much right as anyone).
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