.
[An undated essay,
apparently published by the author, sometime between 1968 and his
death in 1970]
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The abolition of poverty has, more and more become a goal of the
American people, a goal that will not be achieved until there is a more
just distribution of wealth.
This is our country and despite its shortcomings we are loyal,
patriotic and even sentimental toward our country and our flag, although
few of us have ever given a thought to the fact that, if this is our
country, we own it. It is not only our country in patriotism and
sentiment, but, following a logical sequence to be presented later, it
is reasonable to claim that it is our property, and therefore reasonable
to claim that every one of us, at birth or immigration, might be
provided with a Certificate attesting that he is the owner of One Share
of that great corporation: THE UNITED STATES OF AMERICA.
At first it would appear that such a Certificate would be valueless,
and under present conditions, that would be true, but further study and
analysis might suggest a procedure that would give it substantial value,
though it would also indicate the need of an equally substantial change
in our system of taxation and distribution of wealth. It is only when a
man is equally an owner of the country, that he would feel no stigma of
charity or dole if a Dividend were to be paid to him as the holder of
his Stockholders Certificate.
There are only two sources of wealth: Human Effort and the "God
given" Bounties of Nature. It seems singularly unjust to take the
earnings of an industrious and useful man (and of his capital) as we do
through the income tax, to give them to the needy.
From the man of wealth, using his brain to determine the wisdom of an
investment, to the common laborer, spitting on his hands preparatory to
grasping a shovel, human effort should be rewarded in full.
But the God-given bounties of nature present a very different set of
circumstances. The Bounties of Nature consist of the Air, the Land, all
minerals and fossil fuels, gravity, and the natural products of forest
and field.
Granting that this is our country, it should follow that its natural
wealth is our common property, but, assuming that this is true (if only
for the purpose of further study), it would be manifestly impossible to
divide the bounties of nature, as such, in equal parts, among us all.
Yet, if it was conceded that it is our property, some form of full
distribution would be required, and the following system is therefore
submitted for consideration.
It might first be recognized that it is the people, as a whole, who
create (solely by their presence) the value of all nature's
bounties. This is conspicuously the case in the valuation of the land.
Strictly speaking, we do not buy the land, we buy the location.
The value of all urban land is fixed by its location, and that, in the
case of business sites, means easy contact with the greatest number of
people, so that, finally, land value is location value, and location
value is, in turn, people value. A value created solely by the
presence of people.
Many enlightened and intelligent men and women contend that this value,
publicly created, should be the source of the public revenue. As all
taxation can be shown to be arbitrary, unscientific and punitive, its
abolition, as a part of this plan, would release us from an onerous
burden. Taxation would be replaced by the governmental collection of the
wealth which nature has provided for us all. After paying all legitimate
city, county, state and national expenses, isn't it reasonable to
suggest that an established dividend could then be paid to every
Stockholder, forming a Basic Income on which he could rely. This
dividend, as his share of the commonly created wealth, would at once,
give tangible value to his Certificate.
It is evident that the dividend could not be large, but it is only dire
and involuntary poverty that we would seek to abolish, leaving so much
to be desired that all capable Basic Income recipients would seek
employment, go into business, trade in the Stock market or otherwise
make use of the boundless opportunities of Useful Free Enterprise.
The Basic Income could commence at birth, but be retained by the
government until the Stockholder had arrived at a prescribed age, to
avoid dissipation by evil or incompetent parents, and also to avoid the
bearing of children for gain. A portion could be allotted by a
disinterested authority to cover the cost of a child's education in the
public schools.
This Dividend, or Basic Income, would not be subject to garnish or
lien, could not form any part of a contract or agreement, would not be
transferrable and each certificate would become valueless upon the death
of the Stockholder. If a recipient were to be an inmate of an
institution, his Basic Income could be applied to the cost of his
maintenance.
Actually, it would seem to the writer that a far more equal
distribution of our country's wealth could be achieved by adoption of
the principle advocated by Henry George in his great book, PROGRESS AND
POVERTY in which he proposes a 100% "taxation" of the rental
value of the land and the abolition of all other taxes, a proposal that
soon became known as the Single Tax.
Like the Alligator Pear (The Avocado now) which has nothing to do with
alligators or pears, the Guinea Pig which does not come from Guinea and
is not a pig, and the pineapple, the title of the Single Tax is a
misnomer, as it is not necessarily the single source of public revenue
nor is it, strictly speaking, a tax. It is a recognition of the
reasonable conviction that, as the people create the value of the land,
that creation is their property, and should be the source of the public
revenue.
While the principle here presented is suggestive of the public becoming
a landlord, it might be worth considering that that is the most
practical role for it to fill. We are all familiar with ineptitude of
government in business and with the small amount of ability that is
required on the part of the landlord. As a Sir Daniel Hall once said, "If
the State does not fill its true position as a landlord, it will find
itself more and more in the position of industrialist", and this is
a position where politics takes precedence over efficiency.
It will be apparent to the reader that this plan comes "perilously"
close to the advocacy of the Nationalization of the land. But there is
no fallacy as strongly fixed in the average mind as that regarding the
ownership of land. In one sense and to a certain degree, the land is
already nationalized. In the sense that it "revests", not to a
former occupant, but to the people, and to the degree that the "owner"
not only pays a portion of the rental value to the public, but that
failure to pay it, in the form of taxes, results in the loss of
ownership. This is made very plain in the edict of Supreme Court
Justice, Samuel Freeman Miller, (1862 to 1890) who adjudged "The
reserved right of the people to take the full annual value of the land,
must be considered a condition of every deed." The sharp and vital
difference between our present system and that which is here proposed,
is that now the holder of the title to a parcel of land, can collect the
sometimes tremendous difference between the full rental value, and that
part now taken by the government, whereas under the proposed plan, the
government would collect the full rental value, but would not tax
improvements (homes, factories, hotels and the like), inventories or
incomes.
Abolition of poverty would surely be a guaranty of the abolition of a
very large part of the brooding envy toward those with income, the
disheartening effect of refusals on applying for jobs, frustrations
often resulting in lawlessness and defiance of authorities.
The barest income, with the knowledge that he need not depend on
employment or even the need of seeking employment, would keep most men
within the pale of obedience to the law.
Evidence that this is not a chimerical Will-o-the-wisp is given by the
State of Alberta, Canada. Alberta, having retained the mineral and
fossil fuel rights, when allotting the land, has paid for its schools,
highways and other government expenses, and, on two occasions, has paid
a dividend to each of its citizens. While the dividends were small
($17.50 and $20.00) they and the other expenses were paid out of oil
royalties alone.
As long ago as the days of Adam Smith, a great economist, it was agreed
that land is not capital, though there is a great amount of what should
be capital now invested in land. Land and Capital are directly opposite
in their effects. This is best illustrated by the fact that: Of Capital,
the value fixes the yield. Of Land, the yield fixes the value.
Furnishing capital is a service. Collecting land rental (privately) is a
Privilege. It is a legislation-created privilege, usually commencing
with seizure, appropriation or conquest. Capital creates more capital.
Land does not create more land.
Under the plan here proposed, let us consider the situation of a man or
a company, occupying an area of land. He has paid his land rental to the
government collector, whom we can continue to call the Tax Collector.
Having paid his fellow-owners the full rental value, he becomes the sole
and exclusive owner and occupant of the area. Provision can be made in
the law that he can bequeath it to his heirs, and that, when he sells
the improvements, the purchaser will succeed to the right to occupy the
area, assuming the payment of the rental value. There would be no
occasion for the state to seek the highest bidder, as it would be its
duty, and in the interest of the public, to be certain that the full
value was established and collected. As to the fairness of this
procedure, it has long been common knowledge that, while everyone
presumably benefits by the government maintenance of fire, police,
judicial and other departments, every convenience and necessity service
contributes to the value of the land only, and not to the value of the
improvements.
The payer of the full rental value, unlike the taxpayer of today, can
enter "value received" after his payment, as there would be no
tax on improvements, inventories or income. Improvements could be sold
for an undisclosed "valuable consideration" and there would
always be improvements, as the holding of vacant land would be expensive
and unprofitable, as it would be paying the full rental value, and
therefore yield no income. The right to assume the payment of rental
might develop some value, but it would never be large if the government
and public were vigilant and saw to it that the full rental was kept at
its highest.
In short: The proposal is that the "tax" collector collect
the full rental value of all the land (the Single Tax), pay all
legitimate governmental expenses, then pay a dividend to every
inhabitant of our country, out of the surplus.
Those to whom the thought of the recipient of a Basic Income, not
having to even seek employment, is abhorrent, might be reminded that
there are a very large number of people already doing so, with no better
right to it than the poorest of the poor.
Naturally, so radical a change would require a period of several years
and would encounter bitter resistance, but until it is done, poverty
will never be abolished.
SAYINGS OF GREAT MEN
TOM PAINE: "Men did not make the earth ... It is the value of the
improvement only, and not the earth itself, that is individual property
- Every proprietor owes to the community a ground rent for the land
which he holds."
THOMAS JEFFERSON: "The earth is given as a common stock for men to
labor and live on."
JOHN STUART MILL: "Landlords grow richer in their sleep without
working, risking or economizing. The increase in the value of land,
arising as it does from the efforts of an entire community, should
belong to the community and not to the individual who might hold title."
HERBERT SPENCER: "Equity does not permit property in land ... The
world is God's bequest to mankind. All men are joint heirs to it."
LEO TOLSTOI: "Solving the land question means the solving of all
social questions .. . Possession of land by people who do not use it is
immoral - just like the possession of slaves." "
Some day this will be the general thinking . . . Some day"
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