Americans Clamoring for Something,
But What?

Edward J. Dodson

[An unpublished essay, November, 2009]

Across the United States there are, at best, a few dozen people actively and regularly engaging local elected officials on how to change the way government raises its revenue based on the proposals traced back to Henry George. And yet, the prospects for adoption of a two-rate form of property taxation are better today than has been the case for several decades. The credit goes to the hard work by Josh Vincent under the auspices of the Center for the Study of Economics, in conjunction with key supporters in Pennsylvania, Maryland, Virginia, New York and Connecticut.

Part of Josh's challenge has been to keep the Pennsylvania cities cultivated by Steve Cord during his many years as head of the Center from shifting the burden of taxation back onto property improvements. This is always a possibility when changes in officeholders occur. The positive effects of the two-rate tax structure are not always apparent because the effective rate of taxation on land values remains low. In Pennsylvania (as in most states) three levels of government tax real property: counties, school districts and municipalities. Although some twenty municipalities have adopted a two-rate tax structure, only two school districts and no counties have followed suit. Because in the United States schools are (to a significant extent) funded by local property taxation, getting school districts to adopt a plan to gradually increase the rate of taxation on land values is a key strategy for demonstrating the power of our tax reform model.

When I talk with my local officials and others in New Jersey about the merits of "land value taxation," I point to the record of its use in the capital city of Pennsylvania, Harrisburg. Despite being the state capital, Harrisburg was suffering from disinvestment, urban blight, the loss of businesses and residents and ills typical of many U.S. urban centers. Then, beginning in the late 1970s, the mayors and city councils began an aggressive campaign to rebuild the downtown area. Moving to a two-rate form of property taxation was an integral part of this campaign. And (despite the failure of the county and school district to make the same changes), land owners began to invest in new construction. People and businesses returned. Harrisburg is today a thriving, vital community with a lively center, new restaurants and entertainment options. The connection between these changes and Harrisburg's special way it raises its revenue is not self-evident. However, analysts not associated with any "Georgist" organization are taking note.

While there is reason for optimism, the real question is whether the process of getting new cities or school districts or counties, one or two at a time, will achieve a critical mass for systemic change before the weight of our existing economic policies and practices brings on a deep and prolonged collapse. Knowing this is a real possibility, activists here do all we can to reach a broad audience with our perspectives on the causes of generational poverty, the boom-to-bust business cycle, and the links between land monopoly and destructive stewardship of our planet's resources.

Looking at the big picture, I am not optimistic that we are positioned to effect change in the face of the entrenched political and economic power we face. That said, we have no alternative but to keep trying, to find new avenues for conveying our ideas, to harness our resources - financial and people - more effectively.