[01] When it is first proposed to put all
taxes upon the value of land, and thus confiscate rent, all landholders
are likely to take the alarm, and there will not be wanting appeals
to the fears of small farm and homestead owners, who will be told
that this is a proposition to rob them of their hard-earned property.
But a moment's reflection will show that this proposition should
commend itself to all whose interests as landholders do not largely
exceed their interests as laborers or capitalists, or both. And
further consideration will show that though the large landholders
may lose relatively, yet even in their case there will be an absolute
gain. For, the increase in production will be so great that labor
and capital will gain very much more than will be lost to private
landownership, while in these gains, and in the greater ones involved
in a more healthy social condition, the whole community, including
the landowners themselves, will share.
[02] In a preceding chapter I have gone
over the question of what is due to the present landholders, and
have shown that they have no claim to compensation. But there
is still another ground on which we may dismiss all idea of compensation.
They will not really be injured.
[03] It is manifest, of course, that the
change I propose will greatly benefit all those who live by wages,
whether of hand or of head -- laborers, operatives, mechanics,
clerks, professional men of all sorts. It is manifest, also, that
it will benefit all those who live partly by wages and partly
by the earnings of their capital -- storekeepers, merchants, manufacturers,
employing or undertaking producers and exchangers of all sorts
from the peddler or drayman to the railroad or steamship owner
-- and it is likewise manifest that it will increase the incomes
of those whose incomes are drawn from the earnings of capital,
or from investments other than in lands, save perhaps the holders
of government bonds or other securities bearing fixed rates of
interest, which will probably depreciate in selling value, owing
to the rise in the general rate of interest, though the income
from them will remain the same.
[04] Take, now, the case of the homestead
owner -- the mechanic, storekeeper, or professional man who has
secured himself a house and lot, where he lives, and which he
contemplates with satisfaction as a place from which his family
cannot be ejected in case of his death. He will not be injured;
on the contrary, he will be the gainer. The selling value of his
lot will diminish -- theoretically it will entirely disappear.
But its usefulness to him will not disappear. It will serve his
purpose as well as ever. While, as the value of all other lots
will diminish or disappear in the same ratio, he retains the same
security of always having a lot that he had before. That is to
say, he is a loser only as the man who has bought himself a pair
of boots may be said to be a loser by a subsequent fall in the
price of boots. His boots will be just as useful to him, and the
next pair of boots he can get cheaper. So, to the homestead owner,
his lot will be as useful, and should he look forward to getting
a larger lot, or having his children, as they grow up, get homesteads
of their own, he will, even in the matter of lots, be the gainer.
And in the present, other things considered, he will be much the
gainer. For though he will have more taxes to pay upon his land,
he will be released from taxes upon his house and improvements,
upon his furniture and personal property, upon all that he and
his family eat, drink and wear, while his earnings will be largely
increased by the rise of wages, the constant employment, and the
increased briskness of trade. His only loss will be, if he wants
to sell his lot without getting another, and this will be a small
loss compared with the great gain.
[05] And so with the farmer. I speak not
now of the farmers who never touch the handles of a plow, who
cultivate thousands of acres and enjoy incomes like those of the
rich Southern planters before the war; but of the working farmers
who constitute such a large class in the United States -- men
who own small farms, which they cultivate with the aid of their
boys, and perhaps some hired help, and who in Europe would be
called peasant proprietors. Paradoxical as it may appear to these
men until they understand the full bearings of the proposition,
of all classes above that of the mere laborer they have most to
gain by placing all taxes upon the value of land. That they do
not now get as good a living as their hard work ought to give
them, they generally feel, though they may not be able to trace
the cause. The fact is that taxation, as now levied, falls on
them with peculiar severity. They are taxed on all their improvements
-- houses, barns, fences, crops, stock. The personal property
which they have cannot be as readily concealed or undervalued
as can the more valuable kinds which are concentrated in the cities.
They are not only taxed on personal property and improvements,
which the owners of unused land escape, but their land is generally
taxed at a higher rate than land held on speculation, simply because
it is improved. But further than this, all taxes imposed on commodities,
and especially the taxes which, like our protective duties, are
imposed with a view of raising the prices of commodities, fall
on the farmer without mitigation. For in a country like the United
States, which exports agricultural produce, the farmer cannot
be protected. Whoever gains, he must lose. Some years ago the
Free Trade League of New York published a broadside containing
cuts of various articles of necessity marked with the duties imposed
by the tariff, and which read something in this wise: "The farmer
rises in the morning and draws on his pantaloons taxed 40 per
cent. and his boots taxed 30 per cent., striking a light with
a match taxed 200 per cent.," and so on, following him through
the day and through life, until, killed by taxation, he is lowered
into the grave with a rope taxed 45 per cent. This is but a graphic
illustration of the manner in which such taxes ultimately fall.
The farmer would be a great gainer by the substitution of a single
tax upon the value of land for all these taxes, for the taxation
of land values would fall with greatest weight, not upon the agricultural
districts, where land values are comparatively small, but upon
the towns and cities where land values are high; whereas taxes
upon personal property and improvements fall as heavily in the
country as in the city. And in sparsely settled districts there
would be hardly any taxes at all for the farmer to pay. For taxes,
being levied upon the value of the bare land, would fall as heavily
upon unimproved as upon improved land. Acre for acre, the improved
and cultivated farm, with its buildings, fences, orchard, crops,
and stock, could be taxed no more than unused land of equal quality.
The result would be that speculative values would be kept down,
and that cultivated and improved farms would have no taxes to
pay until the country around them had been well settled. In fact,
paradoxical as it may at first seem to them, the effect of putting
all taxation upon the value of land would be to relieve the harder
working farmers of all taxation.
[06] But the great gain of the working
farmer can be seen only when the effect upon the distribution
of population is considered. The destruction of speculative land
values would tend to diffuse population where it is too dense
and to concentrate it where it is too sparse; to substitute for
the tenement house, homes surrounded by gardens, and fully to
settle agricultural districts before people were driven far from
neighbors to look for land. The people of the cities would thus
get more of the pure air and sunshine of the country, the people
of the country more of the economies and social life of the city.
If, as is doubtless the case, the application of machinery tends
to large fields, agricultural population will assume the primitive
form and cluster in villages. The life of the average farmer is
now unnecessarily dreary. He is not only compelled to work early
and late, but he is cut off by the sparseness of population from
the conveniences, and amusements, the educational facilities,
and the social and intellectual opportunities that come with the
closer contact of man with man. He would be far better off in
all these respects, and his labor would be far more productive,
if he and those around him held no more land than they wanted
to use.1 While
his children, as they grew up, would neither be so impelled to
seek the excitement of a city nor would they be driven so far
away to seek farms of their own. Their means of living would be
in their own hands, and at home.
[07] In short, the working farmer is both
a laborer and a capitalist, as well as a landowner, and it is
by his labor and capital that his living is made. His loss would
be nominal; his gain would be real and great.
[08] In varying degrees is this true of
all landholders. Many landholders are laborers of one sort or
another. And it would be hard to find a landowner not a laborer,
who is not also a capitalist -- while the general rule is, that
the larger the landowner the greater the capitalist. So true is
this that in common thought the characters are confounded. Thus
to put all taxes on the value of land, while it would be largely
to reduce all great fortunes, would in no case leave the rich
man penniless. The Duke of Westminster, who owns a considerable
part of the site of London, is probably the richest landowner
in the world. To take all his ground rents by taxation would largely
reduce his enormous income, but would still leave him his buildings
and all the income from them, and doubtless much personal property
in various other shapes. He would still have all he could by any
possibility enjoy, and a much better state of society in which
to enjoy it.
[09] So would the Astors of New York remain
very rich. And so, I think, it will be seen throughout -- this
measure would make no one poorer but such as could be made a great
deal poorer without being really hurt. It would cut down great
fortunes, but it would impoverish no one.
[10] Wealth would not only be enormously
increased; it would be equally distributed. I do not mean that
each individual would get the same amount of wealth. That would
not be equal distribution, so long as different individuals have
different powers and different desires. But I mean that wealth
would be distributed in accordance with the degree in which the
industry, skill, knowledge, or prudence of each contributed to
the common stock. The great cause which concentrates wealth in
the hands of those who do not produce, and takes it from the hands
of those who do, would be gone. The inequalities that continued
to exist would be those of nature, not the artificial inequalities
produced by the denial of natural law. The nonproducer would no
longer roll in luxury while the producer got but the barest necessities
of animal existence.
[11] The monopoly of the land gone, there
need be no fear of large fortunes. For then the riches of any
individual must consist of wealth, properly so-called -- of wealth,
which is the product of labor, and which constantly tends to dissipation,
for national debts, I imagine, would not long survive the abolition
of the system from which they spring. All fear of great fortunes
might be dismissed, for when every one gets what he fairly earns,
no one can get more than he fairly earns. How many men are there
who fairly earn a million dollars?
Documentary
Movie