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REAL* ESTATE
BUILDERS
AND
NEW YORK, JANUARY 31, 1914
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THE SINGLE-TAX THEORY DISSECTED
The Right of Private Ownership in Land as a Product of Labor —
Land in the City Not a Natural Product — Land Values Would Shrink.
By CYRUS C. MILLER
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THE Salant-Schaap bill (named after
its last sponsors) is, we are told,
about to be submitted again to the Leg¬
islature of the State of New York. It
is expected to contain the same pro¬
visions as its predecessor, the Sullivan-
Shortt bill, which was defeated in 1911.
These bills are known as the "half-tax"
bills because they aim to divide the tax
on buildings and other improvements
into two parts, one to be levied on the
improvements and the other to be add¬
ed to the present tax on land. This will
result in a "half tax" on buildings and
an extra tax on land.
The bill sets forth that ten per cent,
of the tax on buildings shall be taken
off each year for five years and added
to the la;nd tax. It should be under¬
stood that the plan is a half way station
to the Henry George single tax, by
which all taxes (instead of half) are to
be taken from buildings and placed on
land. The principles applying to both
half tax and single tax are the same.
The single-tax theory is that land and
air and water are natural products and
belong to mankind in general, so no in¬
dividual should have exclusive owner¬
ship of them; while buildings and other
improvements- are the products of la¬
bor and should be the exclusive prop¬
erty of the persons who create them.
To carry out this theory the single-tax¬
ers propose to leave the land in the pos¬
session of its owners but to levy upon
it a tax equal to its producing power,
so that the possessors of the land can¬
not have its income, which will be di¬
vided among the community to meet
the burdens of government. I believe
this to be a fair statement of their
plans.
A Henry George Theory.
Perhaps some quotations from "The
Condition of Labor," by Henry George,
will not be amiss:
"Being created individuals with in¬
dividual wants and powers, men are
individually entitled (subject of course
to the moral obligations that arise
from such relations as that of the
family) to the use of their own pow¬
ers, and the enjoyment of the results.
There thus arises, anterior to human
law, and deriving its validity from
the law of God, a right of private
ownership in things produced by la¬
bor, a right that the possessor may
transfer, but of which to deprive him
of without his will is theft. This
right of property originating in the
right of the individual to himself, is
the only full and complete right of
property. It attaches to things pro¬
duced by labor, but cannot attach to
things created by God. * * * We pro¬
pose leaving land in the private pos¬
session of individuals, with full lib¬
erty on their part to give, sell or bC'
HON. CYRUS C. MILLER.
queath it, simply to levy on it for pub¬
lic use a tax that shall equal the an¬
nual value of the land itself, irre¬
spective of the use made of it or the
improvements on it."
Land As a Labor Product.
It is to be seen that the whole theory
is based upon the idea that land is not
the product of labor. If it be shown
that ina civilized community land is a
product of labor, the theory falls to the
ground.
Let us examine this idea in detail. No
one will question that land, air and wa¬
ter in a new community are natural
products common to everyone, but like
every other natural product, they are
converted easily into products of labor.
My friend the fruit grower buys com¬
pressed air in cylinders from a concern
which takes this natural product and
compresses it. He uses it as a motive
power to spray his trees. In my office
we use bottled water which we buy
from some one who collects this nat¬
ural product, bottles it and sells it to us.
Miners take gold and precious stones,
and coal, and oil out of the earth, and
after they have treated them by various
forms of human labor either in manu¬
facture or transportation, exchange
them for other products of human labor.
When our forefathers stepped upon
Plymouth Rock they found before them
an' unbroken forest, a natural product.
It had no selling value. They chopped
down the trees, pulled the stumps, blast¬
ed or picked ofi the rocks and stones,
filled the ravines, built roads and con¬
verted the land into a product of hu¬
man labor. Anyone could do it who
would. Now it is proposed to lay a tax
on that land which shall be equal to its
producing power, because they say the
community is entitled to the income and
not the individual who expended his
labor on it, or his successor. Perhaps
it will be said that land in the cities is
not farming land and the same reason¬
ing will not apply.
In the beginning of the city, land was
free to all. Some men worked on the
land and converted it into farms, others
invested their capital in merchandise, all
helped to build up the city. The man
who made bricks which were the prod¬
uct of his labor, sold some and bought
land with his profits. He wanted the
land, others wanted his bricks. Out of
his savings he paid taxes on the land
to carry on the government and assess¬
ments to build streets and sewers and
lay pavements and prepare the land for
the time it would be needed for build¬
ings. The bricks were the primary
product of his labor, but the land no
less represented his labor, and was the
product of it in the wider sense. While
he held the land he had to go without
interest on his original capital, the taxes,
and the assessments.
Land as a Savings Bank.
All of these items went into the land
as they would into a savings bank, some
day to be returned, he hoped. Finally,
a demand came for his land, as it had
for his bricks, and he sold it, sometimes
with a profit, sometimes without. The
community encouraged him to put his
savings into land. What can be said
of an attempt to take them away? It
may be said again that it is not the in¬
tention to take away the land from his
possession. This is true, but it is also
true that the plan is to take away its
selling value by taxing away its income
or its potential power to produce an in¬
come.
A lot is worth a sum upon which it
will produce a fair return after the
taxes have been paid. A fair return is,
let us say, S per cent. It is worth $1,000
if it will produce $50 (S per cent, in¬
come) and the taxes say, 2 per cent., or
$20, which is $70 in all. If the taxes are
raised to 3 per cent, the income will be
reduced to $40 and the lot will be worth
only $800 to sell. If the taxes are in¬
creased to 4 per cent, the income will
be $30, and the selling value $600; and
finally, if the tax is increased to 7 per
cent, the entire income will be taken
and the lot will have no selling value
at all.
Who will pay $1,000 for a lot if he
cannot sell it again for the same amount,
or if he cannot gain an income from it
on that sum? If the income is taken
away the selling value of the lot is lost.
This means that thousands and' thou¬
sands of small owners who now have
their savings in a home or tenement
upon which there is a mortgage, and
whosg equity only equals the selling