The Farmer and the Land Value Tax

Herbert S. Bigelow III

[Reprinted from Twentieth Century Magazine, April 1911]

RECALLING the illustration of a month ago, we imagine a valley where the inhabitants propose, by their social arrangements, to establish equality of opportunity -- that is, to sanction no inequality which is not based upon merit.

Beginning as farmers, they see that if opportunities are to be equal, each must be allowed an equal share of the land of the valley.

If, with the same advantages as to soil, one fanner accumulates more than another, it will be because he is a better farmer. Such inequality is based on merit. It is the essence of liberty that such inequality should be permitted. Its inhibition would be intolerable slavery.

But if one man is given a river-bottom farm and another a side-hill, if one has ten thousand acres and another ten acres, and many have none at all, social differences will arise which cannot be due to merit. Society would then suffer from the injustice of the land laws under which the opportunities of the valley were distributed.

If these farmers fail to find a way to equalize the advantages of soil and location, the inequalities of their agricultural state will take root and yield a fearful crop of curses in the more populous and complex society which will develop.

On one man's quarter section a city may appear. Beneath the surface of another homestead anthracite may be found. The age of steam arrives and the owner of anthracite may find himself in command of a nation's fuel supply. The new age gives birth to mighty cities and the old farm may become acres of diamonds.

If the farmer on the river bottom has an unfair advantage over the farmer on the side of the hill, consider the advantages of those farmers from whose potato patches men dig coal or in whose corn fields they raise sky-scrapers.

The inequality of opportunity between the farmer on Fifth Avenue and the farmer in Arkansas is the same inequality between the river-bottom and the hill-side farms, exaggerated by the advance of civilization.

Now the men of this valley find that it is quite out of the question to make or maintain an equal division of the farm land. Even if it were feasible to secure to each man the same amount of land, these equal shares could not have the same quality of soil nor be equally favored as to location. Moreover, if these opportunities could possibly be equalized by a gerrymander of the territory, the equality would be immediately upset by social changes.

But these farmers discover that the price of land is the measure of the advantage that the farmer on that land has over the farmer who has no farm. They therefore see that the collection from each man each year of an amount equal to five per cent on the value of his land, exclusive of his improvements, and the use of this fund for the payment of public burdens, thus avoiding the necessity of taxation, is the only possible way of equalizing opportunities. They see that by this method each man may be compelled to yield to the public whatever advantage his location gives him, and that since the return of this advantage to the community will be ample for the community's needs, each man may be permitted to enjoy the full fruit of his own industry and will be required to surrender no part of it in taxes to the state.

Moreover, they see not only that the advantages of agricultural locations may be nicely equalized by this method, but that it will work to a certainty in any state of society, insuring always and under all conditions equality of opportunity in the use of the earth.

Our conception of property rights must be modified if our civilization is to endure. What a man makes he may safely be allowed to keep or sell as he chooses. Rut we must come to see that land is different. Possession of the land should be made conditional upon its economic use. There is no way to accomplish this but to make land values the exclusive subject of taxation.

An official of the United States Steel Corporation claimed before a committee of Congress that his people owned sixty thousand acres of one coal field, and that in view of the fact that they had a monopoly of it, its value was sixty thousand dollars an acre.

If premiums of location were treated as public property and these people were required to pay the annual value, it would amount, at five per cent, on their own valuation, to $18,000,000 a year. Would they have been able to agree to pay Mr. Carnegie his $16,500,000 a year if their monopoly power had been taxed out of existence? The taxation of monopoly is the life of trade. Steel would have been cheaper. Industry would have remained more democratic. And we should have had our libraries just the same; only they would have been public libraries and monuments of social justice and civic self-respect.

A land syndicate in the West boasts that it can drive cattle from Arizona to Oregon and camp every night on its own land. The children of San Francisco's slums would discover a continent to the east of them, and the hope of homes would make the nation young again, if that big land syndicate and all little ones everywhere were required to pay to the community for holding land out of use what others are willing to pay for using it.

Here is the law that Henry George discovered. Taxation is not necessary until men come together in communities; but the presence of the community creates a social value, the value of the land, a value that grows with the community's growth, keeping pace with the growing need of public revenue.

As Henry George would say, the accumulating land value of a community is just as clearly God's provision for the growing needs of that community as the milk in the mother's breast is God's provision for the babe in her arms.

Could we hope for the health of the babe if we were to snatch it from its mother's breast? As there is a God in heaven, we shall never have social health until we learn to do justly and to love mercy and to keep the laws of social well-being.

For the ordinances of Jehovah are true and righteous altogether. More to be desired are thev than gold, yea, than much fine gold. Moreover, by them is thy servant warned: In keeping of them there is great reward.