The Single Tax and Economists

Robert Bruce Brinsmade

[Reprinted from The Bulletin of the American Economic Association, April, 1911. A paper presented at the twenty-third annual meeting of the American Economic Association, St. Louis, Missouri, December, 1910]

I wish first to pay a tribute to the frank and very able paper of Professor Davenport. I only wish that his paper, along with the supplemental criticisms of Professors Carver and Robinson, could be published in every trade-union paper of the United States, for I feel sure it would do much to counteract, in trade-union circles, the distrust of professional economists as helpers in the great movement for social reform and industrial equity. Professor Davenport, however, is evidently unfamiliar with the practical proposals of the single-taxers in his inference that they consider chiefly agricultural land values. Such a rendering, I believe, has no basis even in Progress and Poverty, and if one reads Natural Taxation and the A. B. C. of Taxation, the works respectively of T. G. Shearman and C. B. Fillebrown, the practical textbooks of the reform, the mistake is yet more evident.

Single-taxers propose to raise revenue from land value alone, but as they include in their term "land" not only farms but forests, mineral deposits, town sites, and public utility franchises (for the use of land and waterways and resources), I believe they cover all the sources of Professor Carver's "findings" (or legitimate unearned increments ) except patents. The practical method of assessment of these various types of land value is suggested in my article entitled "Natural Taxation of Mining and Timber Land", published in Conservation for May, 1909, and in the Miming World for November 20, 1909.

The gains from monopolistic patent rights can be justified as both a return to the inventor for his brain work and as an inducement for him to record, for the benefit of society, his discovery, which, if kept secret, might otherwise die with him. On this basis undoubtedly our patent law has been abused, but it can be easily amended at any time to make it conform to practical justice. Land rent, however, on the other hand inevitably arises in any competitive society, and the only question before the social reformer is, who shall be allowed to absorb it? Shall it all go to society or shall individual land holders get the whole or part of it? If one had heard today only the paper of Professor Adams and its criticism, he would have thought that taxation was a mere matter of fiscal adjustment. When one considers, however, that our present national and local governments spend about two billion dollars annually or at least one tenth of our total wealth production, it may be seen that taxation has become probably the chief factor in deciding how wealth shall be distributed among the different classes of society. Professor Davenport thinks that a direct land-value tax might be a social danger, but could anything be more demoralizing than our present indirect national taxation? In the many communities in which I have resided, the idea of the average voter of the chief purpose of a federal congressman is that he should act as a sluiceway to divert the stream of national expenditure into his local community. Would there be such a pressure on a congressman for public buildings, river and harbor works, pensions, etc., if his constituents understood that they were paying for them? Now, most voters think that a national grant is like money from home or a legacy from grandmother.

How the single tax would alter for the better the development of our natural resources can only be appreciated by a practical producer. For fifteen years I have been in practice as a mining engineer in many countries. I have been everywhere astounded that our laws still permit land-gamblers to hold up would-be developers to an extent now feasible in few foreign states. The conservation movement is but the first step toward the restoration of our land to the people. The long tolerance of present taxation absurdities by our producers is due to their ignorance of economic science. When the significance of Professor Davenport's paper becomes once known generally, there will be some fur flying among speculators, monopolists, and their dupes and lackeys.

As to Professor Robinson's idea that society has a right only to the future unearned increment, I wish to dissent. It is probably true that it would be impractical to recover the land rent paid in the past, but the recovery of that to be paid in the future (which is capitalized as the present selling value of land) is quite a different matter.

The abolition of the private appropriation of economic rent is analogous to that of chattel slavery. The latter was abolished in Brazil, without money payments to slave owners, by the device of gradual emancipation during a generation. In the same way, Mr. Fillebrown proposes to increase the land value tax 1 per cent annually for thirty years, while decreasing other taxes proportionately. This would suffice to throw the whole burden of government upon land values, raising the 20 per cent of rent now absorbed by taxation to the 50 per cent required for the whole expense of government. This would still leave 50 per cent in the hands of the land holders, which might be considered partly as a commission for rent collection, partly as a bonus for the risk of land development, partly as a margin covering incorrect assessment, and partly as a reserve available for society, through additional taxation, in case of sudden emergencies like earthquakes, famine, pestilence, or war. It is probable that all rent, beyond that needed to cover the actual requirements of the last paragraph, will gradually be absorbed by the future single tax society to cover the increased expenses of a developing social integration.