Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: [v. 93, no. 2394: Articles]: January 31, 1914

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REAL* ESTATE BUILDERS AND NEW YORK, JANUARY 31, 1914 iiiiiii^^ 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 lllllllllllliilllllllllllllllilllilllilillllllllllill^ aiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiBiiiii 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