What is the Single Tax?

Judson Grenell

[This article from a pamphlet by Mr. Grenell condensed and only slightly amended by the editor of the REVIEW is an admirable, and seemingly faultless statement of our principles, couched in language and reasoning that seem to us the essence of simplicity. lb, Grenell is a resident of Detroit - hence the many local instances, with which the argument is fortified. A short biographical sketch of the writer appears elsewhere in this issue.-Editor Single Tax Review. Reprinted from the Single Tax Review, 1909]

The Single Tax is a proposition to raise all revenue for needed governmental expenses from land values only.

• It is not a tax on wealth.
• It is not a tax on production.
• It is not a tax on the industrious.
• It is not a tax on the enterprising.
• It will not take wealth from those who have honestly acquired it, for the purpose of dividing it among those who have neither the desire nor the capacity to become financially independent.
• It taxes the products of neither the creative genius nor the humble plodder.
• It is in full accord with the moral law.

WHAT ARE LAND VALUES?

V. lien two persons desire the same plot of ground, land value arises. If three persons desire it, this value is increased. If scores of thousands cast longing eyes upon it, the value begins to run into the hundreds of thousands of dollars per acre.

WHY DO SO MANY DESIRE THE SAME PIECE OF GROUND?

Because of the fact that the returns from it will be greater than from the same area located elsewhere. Less labor will bring a larger reward. Its best use may be obtained through the medium of a factory, office building, department store or residence site. Its value will be determined by its location as compared with other available sites.

The quarter acre of land on which the Majestic building, Detroit Mich., is erected is assessed for $600,000; it has a market value of at least $1,000,000, or at the rate of $4,000,000 an acre.

Six miles away, land can be bought for $1,000 an acre.

What the Majestic building in Detroit would be worth on the cheaper lot is apparent to the most unthinking. Few lawyers, doctors, capitalists, merchants, bankers or promoters would pay rent for its accommodations. It would not be in the center of a densely populated area. Ten thousand people would not daily use its elevators as they do now.

WHAT PROPORTION OF LAND VALUE IS DUE TO THE OWNER OF THE LAND?

The land owner contributes to the value of the land in just the same proportion as every other member of the community; neither more nor less. If he is an absentee owner, he contributes nothing.

The Astor family is a striking example of absentee landlordism. Millions of dollars are annually sent from New York to London for the benefit of the Astors, without New Yorkers receiving anything in return. It is one of those drains that help to explain why the exports from the United States are so many millions more than the imports.

Land value, to sum it up, is a communal creation, to which each individual in the community has contributed, and therefore each individual is entitled to recognition in its distribution.

HOW CAN LAND VALUES BE EQUITABLY DISTRIBUTED?

Co-operation is a vital factor in civilization. When any considerable number of people begin to live close together, new problems arise of which those living in thinly populated areas can have but a faint idea. There is a necessity for co-operation in supplying water, building sewers, paving streets, lighting the public thoroughfares, protection against fire and the guarding of life and property.

Should each individual attempt to do all these things for himself, by digging his own well, guarding his own property, etc., the expense would in great measure consume much of the benefits derived from a community life. In a word, it is healthier, better and cheaper to do these things collectively than separately.

Here, then, is, on the other hand, community values - land values - due to a compact or congested population; and community expenses, also due to the fact that many people are living close together in a restricted area. To these community values and to these community expenses, each individual has contributed, be he rich or poor, high or low.

It is not only economically sound, but it is ethically unassailable, for the community to appropriate these social values - land values - for these social necessities. No one is robbed, no one is oppressed, no one is discouraged by a tax on land values.

WHAT WOULD BE THE EFFECT ON INDUSTRY OF THE SINGLE TAX?

The Single Tax would stimulate every branch of industry except the industry of holding vacant land out of use; this would be killed.

Land values are very different from labor values. Tax land values and land becomes cheaper. Tax the products of labor and they become dearer. The tax is added to the cost of production, and is paid by the consumer. Houses and goods, like dogs and saloons, can be taxed out of existence. When windows in France were taxed, houses were built without them.

Whether taxed or untaxed, land area can neither be increased nor decreased. The earth is just the same size as it was when Adam and Eve walked in the Garden of Eden. It will be the same size when the human race has disappeared. Increase the tax to the full annual value of the land, and its serviceable value to man will not be changed in the least. But its selling value will be nil. The tax will absorb the rent, and so long as the land value tax is not increased above its annual rental value, industry will be stimulated to the fullest extent to use the opportunity presented.

HOW WOULD INDUSTRY BE STIMULATED?

In the first place capital would no longer be needed to purchase sites for business activities. "Money and credit, free from all taxes, would crowd into the industrial field." Land being practically free, except for the annual tax, which under the Single Tax would not exceed the value created by the community, no one need be idle from compulsion, for he could always employ himself if no other employer desired his services.

In fact, no one would work for less than he could earn working for himself, and immediately the employer and the employee would be placed on an equality in bargaining. Whatever new land has been opened to labor, wages have increased. All would not desire to be farmers, but enough would be to immediately relieve the market for laborers.

More people could afford to have houses of their own. They could more readily find means to build, once the incubus of tying up a third or more of their capital in a site was taken off their shoulders. The industry of building would immediately stimulate all other industries, from the miner digging iron to be turned into hardware, to the lumberman in the wilds of Canada or the swamps of Louisiana turning trees into timber.

Consumption would keep even pace with production, for the wages of the laborer would be the full fruits of his toil. Overproduction would be impossible, for the power to buy and the capacity to consume would be as great as the opportunity to produce.

Cities would grow naturally, but compactly, being neither congested by high prices for building sites, nor diluted with great stretches of vacant land (which are opportunities for employment kept out of use), with residence streets scattered over a wide area, and increasing beyond the legitimate need the cost of supplying water, sewers, police, light and fire protection.