.

According to friend and foe alike: it just won't work. It is rather heartbreaking to exhaust yourself presenting arguments for the socialization of rent and then to be told that -- it just doesn't work out. And the unfortunate part of it all is that people aren't using that statement as a subterfuge. The experiments advertised as partial applications of the "Single Tax" definitely warrant the statement. Examples of the failure of land value taxation as a social instrument -- Pittsburgh, Vancouver, Fairhope. Arden -- place the advocates of the George theory decidedly on the defensive. Speculation and its economic consequences have not been eliminated in these places. If Henry George's philosophy is to toe judged by these experiments, then it must indeed be only a fanciful theory.

But, Henry George's philosophy is not land value taxation -- any more than it is just free trade between nations. It is the doctrine of human freedom, based upon economic criteria. And he implemented this doctrine with a practical means for securing economic freedom. The means:

The appropriation by society of the full rental value of land and the abolition of all taxes on production.

That is the proposition by which George must stand or fall, and the only fair method of testing it is to apply it in full. Thus, when I attempted to study the advertised experiments of the "Single Tax," some strange things came to light, and it became apparent that there is a valid reason for their failure to produce the social benefits George promised us.

Let us look at Johannesburg, Union of South Africa, for example. Recently I came across a book that fairly cooed in its praise of the results of land value taxation as applied in that city. The book is City Government: The Johannesburg Experiment, by John P. R. Maud. Mr. Maud is obviously quite friendly to the fiscal policy of Johannesburg.

This is a city of 438,000 population, metropolis of the Transvaal, center of transportation and commerce, surrounded by rich agricultural and mining districts. For some years it has been operating under a system of land value taxation.

As might he suspected, there are two economic groups in that city: landowners and producers. And, as also might be suspected, the landowners are none too anxious to help land value taxation along. So that despite the fact that the City Council has exempted improvements from taxation and has placed a tax on land values, the landowners are laboring under no immediate handicap. The rate of land value taxation is $.14 in $5 (about 3%) on land, and the council reserves the right to impose taxes on improvements whenever it sees fit. It is obvious that the reservation of the right to tax improvements is something for the landowners to fight for if and when there is any threat of an increase of taxes on land values. Also, it can easily be employed as a bludgeon to beat down any budgetary increase which might call for greater tax revenue. The 3% rate has been in effect since 1916 with the exception of two years, during which it was raised to $.20 in $5. But the rise was short lived and immediately afterward was reduced to $.14. Thus for two years the demands of the inhabitants called for more social services and the budget had to be expanded. In turn this required more tax revenue and the tax rate on land value was upped. How the landowners let anyone slip this over on them is not explained in the book.

Now when the tax rate was reduced again to 3%, one of two things happened: Either the .budget was reduced, or the greater revenue was raised in some other manner. I don't know; but in either case could the producers win?

In fact. Mr. Maud (who does not claim to be a follower of George, if indeed he has any knowledge of the philosophy) is delighted to report that land value taxation, far from providing all social demands and replacing industrial taxes, is deliberately kept at a minimum; that public improvements are neglected and that that part of the budget not satisfied by land value taxation is met by other forms of taxation!

"But there are other reasons (for the smallness of the tax)," states Mr. Maud, "of perhaps greater importance. First the council has not Developed welfare services as the English town councils have done. It has therefore escaped the necessity of increasing its demands upon the ratepayers to the same extent as the English councils Not only are water, electricity, gas transport, the rent of municipal houses, the hiring of rooms in the town hall, the use of swimming baths, and the services of the abattoir, live stock and produce markets all paid for in this way, but sanitary and sewerage services also." (Emphasis mine.)

No wonder the "Single Tax" doesn't work! Wherever George's proposal to socialize rent has been bastardized into land value taxation, the landlords have seen to it that social services have been kept at a minimum, and that other forms of taxation were imposed on production.

New York can hardly be considered a "Single Tax" city. Let's compare the fiscal picture of that city with that of Johanneaburg, There appears to be a fair basis for comparison, and the figures are interesting. Our starting point is the tax rate, for in both cities it is approximately 3%.

…	Johannesburg	New York City
Population	438,000	7,000,000
Income from LVT	$3,000,000	$240,000,000
Budget	$19,000,000	$600,000,000
Revenue from Production Taxes	$16,000,000	$360,000,000

During the last few years there has been a very wide adoption of sales taxes. There have been two main reasons for this. One reason has been the desire to provide relief for the unemployed and distressed during years of depression. The other has been the desire to lighten the taxes on property, especially real estate.

In this latter connection, we must absolutely not forget that real estate is NOT just one thing but is TWO things. It includes land AND improvements. The improvements are due to the labor and thrift of individuals. The land is a result of geological forces; and the value of the land is chiefly a by-product of community growth and development. Whatever may be said in favor of relieving from taxes the owners of houses, barns, fences, fruit trees, stores and factories, which cannot come into existence except through labor, the same arguments cannot be used in favor of relieving community-produced land value of taxation and thereby allowing private individuals to appropriate this community-produced location value to their own pockets.

Are we to adopt a tax system -- the sales tax -- that is a heavy burden on the poor, merely in order that such community-produced location value may be appropriated by private individuals?

Sales taxes drive a wedge between prices to consumers, on the one hand, and the outlays of producing companies for such expenses as wages, on the other. When such taxes are levied, either prices to consumers must rise or the expenses of production, such as wages, must fall. If the expenses of production are lowered, as by reduction of wages (the largest production expense), there is clearly a tax burden on wage earners. Probably the idea that the widespread adoption of taxes on production and sales actually reduces the money put into workers' pay envelopes scarcely ever occurs to any wage earner. Yet this must be the case. Production and sales taxes may be fairly spoken of, therefore, as taxes that are levied directly on the pay envelope. If a considerable .part of the price paid by consumers is taken by the state in taxation, there must obviously be less of the price remaining to pay the workers; the workers must obviously not be worth so much to the companies that employ them; and they must either accept lower wages or suffer a large degree of unemployment.

But if, instead of any measurable fall in the expenses of production, there should be a rise in prices to consumers -- and unless the one result occurs the other must occur -- this also would be a burden on wage earners. What real difference does it make to the worker whether the number of dollars in his pay envelope is measurably reduced or, the number of dollars in his pay envelope approximately the same, prices rise so that each dollar buys less? In either case, his wages measured in the necessities and comforts of life are definitely reduced. Besides this clear burden, there is, in the case of sales taxes, an additional nuisance burden to both merchants and consumers.

One of the arguments advanced for sales taxes is to provide relief for the poor and unemployed. Relief for the poor by burdening other poor! The subtraction from the wages of some workers to provide relief for others may, and probably often does, put some of the workers who are thus taxed, into a position where they, too, need relief, though they may often fail to get it.

Why is the community-produced location value of land so sacred a source of private income that we must be forever trying to relieve the recipients of. this income from taxation and resorting, for schools, police, courts, roads, and aid for 'the poor, to taxation not only on thrift and enterprise' but on wage earners' incomes and on the pitiful1 incomes of the very poorest of them? From the figures we discover that New York, the non-"Single Tax" City, accounts for 40% of its budget by land value taxation, whereas only 16% of the budget comes from land values in the "Single Tax" city of Johannesburg. Not only that, but the land value revenue in New York is 80 times as great as that of Johannesburg. Its population is only 16 times that of the South African city!

No wonder "it" doesn't work! From the figures it must be obvious that New York might be considered more of a "Single Tax" city than Johannesburg. Yet New York Is hardly the ideal that Henry George advocated. It, too, suffers somewhat from land speculation and its attendant social evils.

Obviously when the same tax rate produces such relative differences in returns between New York and Johannesburg, land value taxation does not in itself contain any social promise. The reason is that a tax on land values amounting to anything less than 100% of the rent defeats the very purpose which George had in mind. The 100% land value tax has a double duty: firstly, to eliminate preemptive privileges in land which, through speculation, reduce wages and interest, and therefore stifle production, and, secondly, to make unnecessary any levies on the production of capital and labor.

In Johannesburg, speculation is rife. Industry is taxed. Social' services are at a minimum. Monopolies bloom. Poverty is rampant. Land value taxation, there has proved that land value taxation is not what .George advocated.