Book VIII:
"Application of the Remedy"

Chapter 1: "Private Property in Land Inconsistent
with the Best Use of Land"
Chapter 2: "How Equal Rights to the Land May
Be Asserted and Secured"
Chapter 3: "The Proposition Tried by the Canons of Taxation"
Chapter 4: "Indorsements and Objections"

Chapter 1:
"Private Property in Land Inconsistent with the Best Use of Land"

1. If Book VII dealt with equity and distribution, what does Book VIII deal with?

Efficiency and allocation.

2. What, rather than fee simple title in perpetuity, is necessary for the improvement of land? 397

Security for the improvements.

3. Where are costly buildings erected on leased ground? 399

New York and London are cited, but every city in the world could be added. Baltimore, Honolulu and Irvine are rather extreme cases were leaseholds are the rule rather than the exception. Rockefeller Center is a famous case from New York City. The Rockefellers leased the ground from Columbia University for many decades.

4. Who said "The magic of property turns sand into gold"? 399

Arthur Young, an 18th Century traveler and commentator on Flanders. Young's ideas have been lifted, in our times, by Garrett Hardin who, as we saw earlier, also rephrases Malthus for modern readers.

5. How does George criticize Young? 399

He confused the incidental with the essential. It was not property in land, but security of improvements, that turned Flemish sand into gold.

6. Does fee simple title insure the best use of land? 401

It allows speculation, which often prevents the best use. George might have said much, much more on this key point. He might also have added that "rent-seeking," i.e. the effort to acquire fee simple title, often leads to perverse land uses. The premature development of western waters is a splendid case in point; so is premature broadcasting on submarginal channels.

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Chapter 2:
"How Equal Rights to the Land May Be Asserted and Secured"

1. How does George propose to make land common property? 406

To appropriate rent by taxation.

2. How about other taxes? 406

He would abolish most of them. Hence the slogan "single tax," which came into use later. The slogan greatly oversimplifies the proposal, however.

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Chapter 3:
"The Proposition Tried by the Canons of Taxation"

1. How will the rent tax affect incentives to produce? 408-14, esp. 413

It will not check production, but tend to increase it by destroying speculative rent.
In fragments here and there George makes it clear that the tax is to be on latent rent, which is at any time a fixed amount independent of actual rent paid or realized through use. The base of the tax is to be land value. In short, he is talking about the existing property tax ex personal property and improvements. That is what he means when he says the (administrative) machinery is already in place.

2. Is the tax easy and cheap to collect? 414-16

Land cannot be concealed, it lies out of doors. The existing machinery of assessment and collection need not be expanded, but may be contracted. Just raise the tax rate, and stop assessing improvements and personal property (which is 90% of the assessor's workload anyway).
Dispense with the machinery for collecting all other taxes. Alternatively, if we can't live without the IRS, others have suggested modifying the income tax to exempt wages/salary income, offset capital income taxes by means of investment credits, and raise the rate on what is left: land incomes.
Were it not for George and his allies in Congress we would probably have an income tax today that exempts land income. There were six Georgists in the U.S. House of Representatives in 1894 when the income tax law of that year was passed. Madison and Hamilton had aborted any federal direct tax on land by inserting in the Constitution a requirement that any such tax must be apportioned among the states by population, a provision that assured the opposition of the more populous states. The Georgists succeeded in getting Congress to include land rents in the coverage of the 1894 Act, forcing the U.S. Supreme Court either to reject the Act, or allow the direct taxation of land incomes. The Court chose the former. After 19 years, this led to the 16th Amendment of 1913, which allowed direct taxation of income from all sources, including land. Indeed, the first income tax legislation limited the tax entirely to property income. One of those writing the law was Congressman Henry George, Jr., of Brooklyn.

3. Is the land tax "certain"? 416-18

Probably more so than the other taxes described, but this section is mostly rhetorical and would require support.

4. Is the tax "equal"? 418-21

At last we see a credit to Adam Smith, whose canons these are.
Excise taxes (assuming they are shifted forward) fall unequally on breadwinners with large families, which only a Malthusian would regard as just. There are lots of them, but George has already dealt with their position.
The personal income tax allows an exemption for each child. The exemption used to be high enough to notice, but time has eroded it away.
George's main point is that labor income should not be taxed equally with land income, since labor income is earned and land income is not. The landholder as such takes wealth from the general stock, returning nothing.

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Chapter 4:
"Indorsements and Objections"

1. What prior economists does George cite in favor of taxing land values? 422ff.

Ricardo, McCulloch, Mill, Fawcett, Quesnay and Turgot. He should have added Adam Smith. Later researchers have dug up many lesser writers who anticipated George, and a number of later economists who go a long way with him. Many of those are active today, and are surveyed and cited in M. Gaffney's article, "Two Centuries of Economic Thought on Taxing Land Rents."

2. What is McCulloch's reservation. How does George answer it? 425

It may be hard for assessors to distinguish land from improvements.
See 425-26 for the response.

3. What is the political objection? 426

That those not holding land will vote for extravagances if they are not taxed. E.R.A. Seligman later took up this point and made much of it.
George's answer on 427 is as follows. First he points out that the present system of indirect taxes leads voters to support extravagance because they do not know what they are paying, and there is no class to oppose extravagance. Second, land taxes would force division and increase the number of conscious taxpayers.
The most telling part is his observation on the motivation of good citizens and voters. "... it is the consciousness of feeling that he is an integral part of the community; that its prosperity is his prosperity, and its disgrace is his shame." George's inspirational genius is his ability to articulate the best side of human nature.

4. Why has the land tax not already been adopted, if it is so good? 427

Those on whom it falls cannot shift it. They are conscious of their interest, organized and powerful. Landownership yields them discretionary income with which they dominate politics, control and subvert churches, colleges, and think tanks. Their interests are fixed and stationary, so they form oligarchies that dominate local politics.

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