Henry George and the single tax

[AntiLempa]

I was wondering if anyone is familiar with Henry George and his single tax theory. I recently started a correspondence course on his book Progress and Poverty and was amazed by some of the people that complimented his work. John Dewey, Hellen Keller, and FDR all complimented him s theories. I have also read criticisms of his work by Karl Marx and Milton Friedman.

There are quite a few institutions that are either based off of his work or dedicated to him. I was wondering not only what people thought of his work, but also why they have those thoughts.

This speech will give you an idea of his theories http://www.cooperativeindividualism.org/george_ode_to_liberty.html

[papau]

1. So what is the single tax proposed by Henry George ?

the link gives no details.

[AntiLempa]

2. not exactly sure

I'm not exactly sure. I just started the course and was looking for a heads up.

[papau]

5. Sorry about playing with the topic - here's link - explanation -suggestion

http://www.henrygeorge.org/denigris.htm

In Progress and Poverty, George stated that the consequences of dire economic policies were moral issues rather than purely economic issues. So he posed moral questions: '"Why should a man benefit merely from the act of ownership, when he may render no services to the community in exchange?" and "What gives the wealthy the right to become rich -- not for service rendered to the community, but from the good fortune to have advantageously situated land?" He believed that economic problems stemmed from the unavailability of land for those who needed access to it. The injustices of rent robbed the working man of his wages and wild speculation in land led to poverty. He therefore suggested a single tax on land, to absorb all rents, with no tax whatsoever on wages or interest. (See figure 3) A single tax would eventually lead to the ownership of land as common property, rather than as individual property. He believed that the single tax would raise wages, increase earnings of capital, abolish poverty, give employment, and relieve the other economic ills, through a massive redistribution of wealth. He also proposed that businesses which were in their nature monopolies, such as transportation (the railroads) and communications (the telegraph), be government owned and regulated, for the benefit of all.


The USSR forbade private land ownership - and farming went to hell in a handbasket. Greed does motivate - and is therefore needed - but of course it needs to be regulated. Indeed a lack of value to destroying land is the reason the environment is so hard to protect.

Meanwhile why not a single rate income tax replacing our two income taxes - Social Security "payroll tax" and the IRS "FIT - Federal income tax".

A simple design with a per person deductible of say 10000 and a child deductible of 5000 and a up to 10000 deductible for home interest would set the rate in the high 30's, low 40's - and the deductibles would graduate it so the poor paid zero and lower middle class paid near zero. And the GOP always says it wants a single rate federal income tax :-)

:toast:

good luck with your studies

:-)

[TreasonousBastard]

4. Dig deeper...

http://www.cooperativeindividualism.org/shapiro_aaron_on_private_property_in_land.html

if that's broken:

http://tinyurl.com/mner

I vaguely remember this from skool daze and rambling readings, and it's all very interesting, but a bit utopian. Probably highly impractical now, too.

Personally, I like the idea of restricting land ownership, and eliminating it from private property. Private peoperty can be anything permitted on the land, or capital, or anything else, but the land itself could be in common. To various extents, such as village greens, parks, the seas, etc., this has been done. Some places do it more than others, and many primitive societies have no concept of individual onership of land. Some places had the king or local royalty owning all the land, with everyone else a tenant.

It would, of course, be impossible to get something like that passed, though. People are pretty adamant about owning dirt, for whatever reason, and certainly don't want to be the only taxpayers if they own that dirt. It would amount to confiscation, and that really pisses people off.

Even if it could get passed, I'm not sure how effective it would be. This was proposed during an industrial and agricultural society that used lots of land, and one could fairly easily see the economic value of a piece of farmland or a factory or railroad. Now, we have office parks, and the economic activity generated in, say, the Sears Tower is likely far more than the couple of acres it sits on could generate in appropriate tax revenue.

[dofus]

3. Try this link.

http://www.henrygeorge.org/denigris.htm

Also a google search of Henry George + single tax will give you quite a few hits.

Interesting theory. Not entirely sure it would work. George developed this economic theory in the late 19th century, around the time Karl Marx was developing his economic ideas.

Anyway, read the article and decide for yourself.

[AntiLempa]

6. I'm reading the book.

I'm currently studying George. I was wondering what other people's opinions were and trying to spark a conversation.

[happyslug]

7. Pittsburgh used his single tax system for years

It was abolished last year when the County was re-assessed and people complained of excessive increase in assessments. Please note Pittsburgh had a “dual tax” system based on George’s ideas not a true “single tax” system. The “dual system” had two real estate tax rates, a high tax rate on land and a much lower tax rate on “improvements” i.e. buildings, homes etc.

The reason for the dual tax system was that the high tax on land was not enough to bring in tax revenues for operation of the city, thus the city adopted a dual system. A high tax on the value of the land, and a much lower tax rate on the Buildings themselves. To show you why this was adopted look at the following example. Some homes in Pittsburgh had a land value of $5000 while the house was valued at $80,000 (total $85.000). In that example you can set a 100% tax rate on land value (which would bring in $5000) while a 6.25% tax on the Building (which would also bring in $5000). Different rates, but same revenue for the City. The numbers and percentage I am using are for example purposes only, the tax rates on both land and buildings were much lower than these numbers used in this example. I use these numbers to better show HOW the dual system worked.

The Georgian tax system did seem to discourage land speculation (i.e. people did not just buy and hold vacate land or you paid high taxes whether the land was in use or not). The problem started when the County was re-assessed. The company who did the reassessment kept pricing lands without buildings at lower levels than lands with buildings. The Company claimed that land with a building on it was worth more than land without any building. If you accept that position as valid (and I do NOT), than you can NOT implement a Georgian tax system (for you can not separate the value of the land from the buildings on the land).

Now Pittsburgh abolished this last year after almost ten years of litigation regarding assessments in Allegheny County. The problem started about eight years ago when the GOP won control of the County Commissioners. Once in Power the GOP "froze" assessments as part of a policy to transfer tax from "Homes" to "Income". The State did not co-operate (by passing a local income tax law) so a few years later people sued about the failure to re-assessed. The Court order annual re-assessment (and ruled that given modern computers it was possible to re-assess every year which is how it is done now).

At the time of the new assessments a lot of people received new (and higher) tax bills based on the values determined by the re-assessment. These people complained. I have to admit the local politicians did try to explain the fact that while assessments went up, total taxes would drop (with increased assessments the local governments could cut the tax rate and still have the same level of total revenue). The problem is the GOP kept saying that the re-assessments would increase people’s taxes. The litigation over the assessments lasted for almost three years and people were upset about the possibility of huge tax increases.

At that point the dual tax system of Pittsburgh hit the news. People where challenging their Land assessments compared to vacate land near their property. The Company doing the re-assessments than testify in court that, in their opinion, it was impossible to assess lands independent of the buildings on the land. The Court had a problem with this but before the court could rule on this issue the Democrats in Pittsburgh buckled under this pressure and changed the assessment to one on land and buildings.

Since that time the reassessment has been out of the news. Big Business, which owned the most valuable land, saw their taxes drop. What I mean by this is that the new taxes on both land and buildings together was lower than the combination of the old taxes on the land (which had a high tax rate) and the buildings (which had a low tax rate). Since that change the City of Pittsburgh finance has gone down hill (but no one wants to blame the abolishment of the Georgian tax system).

Business does not like the Georgian tax system, remember the old saying “Locations, Location, Location” is the key to a successful business. Given Location is so important, land value of such choice locations were much higher than the value of the buildings on those locations. In effect the change from high tax on land to the present tax system lowered the taxes on these choice locations (While increasing the taxes on less valuable lands such as people’s homes). Thus the biggest impediment to the implementation of a Georgian Tax system has always been business who taxes goes up in such a system while taxes on people’s homes goes down.

[AntiLempa]

8. so it was a success

So it sounds like the dual tax system based on the Georgian System worked. I think I'm going to do some research and figure out if any other cities (in the US or international) have used Georgian based tax systems.

Thanks for all the info.