The air we breathe is naturally occurring, necessary for life, and available to everyone,
regardless of race, gender, social class, politics, or country of
origin. Nobody should have to pay to breathe air, because nobody invented air. Sounds reasonable,
right? So why can’t the same be said for land?
Land, like the air, is natural, necessary for life, available to everyone, and invented
by nobody. So why do you pay to live on it? Assuming you do pay,
given YouTube’s demographics and the current housing market you probably pay rent to a
landlord instead of owning your own home. But anyway, seeing as though
land is just as natural as air, why should people be allowed to wall some of it off and
charge you to live on it? It’d be like owning a patch of air.
This is the philosophy of Henry George, an American economist who lived from 1839 to
1897. Henry George saw that a lot of people were
getting really rich off of extracting value from the land, whether it be through being
a landlord or from mining. Surely, as nobody invented land, it should
equally belong to all members of society, like the air we breathe. If you want to live
on the land, wall it off,
and call it your home, you would expect the rest of society to respect that. Therefore,
you should pay a tax on the value of the land you are trying to claim
to pay for that protection from society. Because other people now don’t have access to the
land, and should be compensated for it. Land in the big cities is
worth a lot, and landowners there will be taxed more, but land in the middle of nowhere
is worth very little, so farmers won’t be affected all too much.
Henry George believed a land value tax should be implemented on all land across the United
States and replace all other taxes; like income tax or tariffs on
imports. After the wealth was used to fund the government, whatever was left from that
tax is to be shared back out to society in the form of a citizen’s
dividend. This solves four problems he believed was
hindering progress and keeping people in poverty; 1. Income Taxes
People would no longer need to give away what they have worked hard to earn to pay for the
work of the government. Only the rich landowners would pay for
services. 2. Landlords.
As the Land Value Tax is based on what tenants are willing to pay and not raised or lowered
at the landlord’s will, the position of “landlord” will
eventually fade from existence. People will be allowed to move freely from place to place
without the possibility of rising rents impeding on someone’s
decision to move. Georgists also support the socialisation of public transport like railroads,
allowing free movement of people. 3. Debt
Whatever is left of the land value tax revenue after the government is fully funded should
be split up and given back to the people, equally. This means
those poorer in society benefit more from this citizen’s dividend.
4. Inefficiency Landowners who simply sit on land without
using it will be forced to pay the land value tax, and as they aren’t making money off
of this land, they will be
an insensitive to sell the land to whoever is willing to buy it to make better use of
it.
Every single major economist, from Smith to Mill, from Keynes to Friedman, believed that
land value tax was the most efficient and fair form of taxation. All
these economists observed that taxing people’s income or labour deterred them from earning
more or working harder. However, taxing land value did not deter
people from owning and improving land. This land value tax also extends to the oceans
and the air, so polluters also have to pay for destroying people’s collective property.
The value of the area
you have polluted determines how much you have to pay. How would you determine that
value? Land value tax is a progressive tax, based on the unimproved value
of the land. Businesses are regularly assessed of their value by the government anyway, why
not do the same for land? Land value inspector could be a good
job for all those parasit- uh, landlords you just put out of business.
Georgism was immensely popular in the late 1800s and early 1900s, with Henry George’s
manifesto, Progress and Poverty, being the best selling book of the
era. Every single progressive leader in the USA until the 1940s was influenced by the
book.
Despite containing the idea of socialising all the land and abolishing landlords, Georgism
is firmly based in Liberalism, where a free market exists and a
government to enforce rights. Henry George rejected the label “socialist”.
Today, Georgism is worked on and contributed to by liberal, libertarian, conservative,
socialist, and anarchist economists and philosophers. All sides,
joining forces, to create one centrist liberal economic and philosophical system.
Beautiful.
Since the 1940s, Georgism has been mostly dormant aside from a mention in an episode
of the Andy Griffith Show. But, since the financial crash and the
annihilation of the housing market, ideas like Land Value Tax and Universal Income,
have all come back into the public view in an attempt to solve the
crisis. Most modern Georgists don’t think a land
value tax should completely replace every form of tax revenue, that would be impossible.
Instead, ideas vary from
using it to replace property tax, VAT, or income tax, it all depends on how progressive
the tax is.
This theorising is all well and good, but are there any examples of this land value
tax at work? Well, yes! Unlike other radical solutions, Georgism has been
tried and is successful. In Singapore, probably the most famous case,
all of the land is owned by the government and those with valuable land pay up to 16%
of that value in tax. In
fact, land is so efficiently used in Singapore that homelessness is virtually nonexistent
and most “homeless” people sleep rough to avoid the morning
traffic, which is a whole other issue. Denmark has a 3% tax on all land worth over
three hundred and forty three thousand dollars, which seems low but still encourages efficient
use of the land. Detroit in the 1890s had a land value tax,
which is what originally enticed Henry Ford to build his motor car factory there.
Lastly, Taiwan, headed by the Georgist Kuomintang party from 1928 to 2000, still uses land value
tax today. Very important when you have such limited space.
So, there you have it. Georgism is the philosophy where all land belongs equally to society,
and those who want to claim ownership it should be expected to
pay the rest of the community to respect that domain. What is earned is kept while what
is unearned is shared.