The Debate Over Collection of Rents
in Lieu of Taxes
[Reprinted from Land and Freedom, May-June,
What can Stoughton Cooley and George White and Oscar Geiger and Edwin
I. S. Hardinge mean by their insistence that rent is no part of price
and cannot be passed on in the cost of living? Do they mean to say
that, under the Georgist system, no one would contribute to the
maintenance of schools, and police and fire service, the post office
and other public service except those who hold land? Is that their
conception of the system for which George lived and died? Do they
think that the justice which inspired him with such devotion? Is that
their idea of civic responsibility? Is that an ideal that is likely to
fire the souls of men as the soul of Henry George was fired? It is
And yet, if rent cannot be passed on, if rent is no part of price,
that is exactly what would result from taking the rent in lieu of
taxes as we purpose doing.
What then? Was George wrong? And must we Georgists admit that we have
been following a phantom? And is our revenue system that we have so
boastfully called scientific a delusion and a snare like all the
others? And is the world to be left desolate after all and without
even the hope of finding a scientific revenue system?
Is it possible to reconcile the two statements that rent is passed on
and that one's debt to society (which would be paid in rent) cannot be
If these two statements can be reconciled, this reconciliation will
not only clear away the confusion resulting from the debate that has
arisen over the "straw man" in this case and which threatens
to set these leaders at loggerheads.
We have heard ever since we were children that, while all dogs are
quadrupeds, all quadrupeds are not dogs.
What is needed here is more alert observation than we have been
exercising, that we may see more clearly than we have in the past
that, while rent can be passed on and become a part of price, and that
this must be so if justice is to be done, all rent cannot be passed
on; that the rent that represents any given man's debt to society
cannot be passed on and written into the cost of another man's living.
It is true that Merchant John Doe's rent would be taken in lieu of
taxes. All of it would be a debt owing to society. But whether
Merchant John Doe himself owes that much to society is quite another
It is not clear how any one could seriously believe that John Doe
personally owes society that much and that none of his
non-land-holding customers owe society anything for the protection
they receive from our fire and police departments, for the schools
provided them, for the health and sanitation service rendered them,
and for the thousand and one other benefits they enjoy at so much cost
To be consistent, Georgists must agree that rent (but not all rent)
is passed on, does become a part of price, and is an item in the cost
of living of us all. This must be so, or ours is not a democratic
system, not a just system.
But saying this is not saying that Merchant John Doe can pass all his
rent on to his patrons; for that would be permitting him to evade his
own just debt to society. Just as his patrons must pay in their
purchases at his store their part of the cost of their protection
while in the store shopping, and on the street going and coming, and
for the guarding of their cars wbi'" *bey are left parked on the
street, so must he pay his ^i.. of the cost of protecting his person
while he is in the store and his part of the cost of guarding his
store at^ night when he is at home asleep as well as during shopping
Now, the only possible way these separate and distinct obligations
can be apportioned is by a division the rent into two parts, one of
which he can pass on to his patrons in the cost of a their purchases,
and another part which he cannot evade but must pay himself.
It is readily granted that such an apportionment is beyond our human
capacity. The man or men do not live who could even divide that rent
between John Doe and his patrons, to say nothing of apportioning the
patron portion among the hundreds or thousands who shop in his store.
Here is where the efficacy on natural law comes in, and the sublime
beauty of the Georgist system; for, in a fair market, all this would
be automatically adjusted, accurate and with exact justice.
In his attack upon what he mistakenly supposed Jorgensen to have
said, Edwin I. S. Hardinge says very truthfully that the expenditure
of labor and capital is the cost of production; and George White,
another of Jorgensen's critics, says truthfully that rent measures the
advantage which attaches to a location because the cost of production
there is less than it would be at an inferior location.
If now these advantages are the result of railways, docks, ship
canals, markets, sewers, garbage systems, highways and other things
that cost us an expenditure of labor and capital, why is not the added
rent we pay because of these things as much an item of cost as our
expenses were before the installation of these facilities? Why is not
the labor and capital expended in the provision of these facilities a
What, after all, is our rent but our wages and interest in process of
collection and transmittal to us in service dividends? And if labor
and capital expended constitute a cost item, why are we not to count
as a cost the labor and capital expended on river and harbor
improvements, railways, docks, highways and the like that give to
certain places their advantage over others in the matter of production
and so create rent?
And if rent paid on account of these improvements is our wages and
interest in process of collection for us and transmittal to us in
service dividends on our citizenship, why is not that rent an item of
cost and a part of the cost of living of those who pay it, especially
as it is paid certain of the processes of that production involved in
their livings, notably upon the transportation involved?
How can this rent be anything but a cost and a part of price?
And why should Georgists be disturbed that this is so? Or reluctant
to admit it?
Could anything show more clearly and convincingly the true scientific
character of our proposed revenue system than this fact that the
collection of rent in lieu of taxes would not only provide amply for
the public need without taxing either Labor or Capital; but it would
also collect for each of us our share of the wages and interest owing
to us by reason of our contribution to the public welfare and to
public progress, whether these contributions be made commercially,
industrially or professionally, and that it could likewise collect
promptly and in full from each of us the full amount that each of us
owes society for what society has done for us?
Not only so; but all this would be done automatically, with unerring
accuracy, so that each would get all he paid for and pay for all he
by Oscar H. Geiger that appeared in the same issue of Land and