The Twice-Single Tax

The following essay by Dr. Fred Foldvary was originally published in The Progress Report, and is reprinted by permission. The books mentioned are available from the Robert Schalkenbach Foundation.
A tax on land rent and only on land rent was advocated by the American economist Henry George. In his most important book Progress and Poverty, and then other books Social Problems, Protection or Free Trade and The Science of Political Economy, Henry George explained how taxes on productive activity hurt the economy, whereas a tax on land rent actually helps the economy while providing revenue. Taxing rent helps by preventing the speculation on real estate that then prices it out of reach for new investment, which results in a depression.

George also explained that the tax on land rent is different from other taxes in that it is a payment for the services attached to territory, whereas taxes on income, sales, and goods have little relationship to government services. The taxation of land rent is a tax in form, but not in substance. Since George advocated eliminating taxation in substance, people called it the "single tax" and George said that was an good name for it. The "single tax" movement became popular in the latter 1800s.

So why is the title above the "twice-single" tax? Because a tax on land rent is "single" in another way. Consider what happens if government builds a subway. Land values rise downtown because there will be more commerce, and land values rise in the suburbs because it is now much easier to commute to downtown. So people are paying higher rent or mortgage payments in order to be located where the subway is. But they also paid for the subway in the first place with taxes, since it was financed mostly from taxes that come from their wages. Folks pay twice for the subway, first through taxes, and then through rent. If the tax is the rent, then people only have to pay once.

Therefore, the single tax is single in being a single payment for government services, rather than the double payment that takes place when wages and profits are taxed. A tax only on rent is a twice-single tax, single in terms of there being only one type of tax and single in being only one payment for government services.

Aside from removing a burden to growth and enterprise, there is another benefit from the rent tax in being single. With only one tax, people can tell just how much they are paying for government. With today's 101 different taxes, many of them indirect and hidden, nobody knows how much they are paying for government. Very few people add up all the sales taxes they pay, and few have any clue as to how much more they pay for goods when taxes on businesses are passed on to the consumers. This creates what economists call "fiscal illusion." Taxes are a lot higher than most people think.

Since land can take several forms, the "single" tax is really a single family of taxes, all based on the same principle. For example, some lands are valuable because they are located in the city, the value coming from commerce. Farm lands are valuable because of the fertility, including the climate, as well as their proximity to convenient transportation. The value of mineral lands comes from the value of the natural materials in the ground. But the rents from all these lands have the same characteristic in having a value which is not created by the land "owner" -- and so it is unable to run away when taxed.

In my experience in teaching and talking about taxes and land, most people are in favor of shifting to the single tax once they learn about it. We can blame the greed of those owning a lot of land for blocking the tax shift, but the majority, who would benefit from the shift, are not agitating for it, because of ignorance and apathy. Education is the key to adopting the single tax, making it known to enough people so that once again a single-tax movement can become a popular political force that would not be easy to ignore.

Fred Foldvary -- July 4, 1998


What Folks Have Been Saying



Yes, but: the neighborhood I live in is getting better, finally, after years of danger and garbage that I've had to deal with. And you know what? My property value has gone up. Now you people say it's perfectly fair to take that away from me. Am I convinced? NOT!
Max Schmoo <
max@saxfone.com>
Brooklyn, - Thursday, September 03, 1998 at 10:11:17 (EDT)
I WOULD LIKE TO KNOW OF THE EFFECTS ON SOUTH AFRICAN MARKETS
A.RAND <G95R5235@CAMPUS.RU.AC.ZA>
GRAHAMSTOWN, SOUTH AFRICA - Saturday, September 05, 1998 at 19:39:02 (EDT)
ACCORDING TO THE FEDERAL RESERVE BOARD GOLD IS NO LONGER THE STRENGTH OF OUR DOLLAR. THEY CONTROL THE GOLD AND HAVE PUMPED WORTHLESS PAPER MONEY IN THE MARKET PLACE WHICH IS SUBJECT TO CHANGE IN VALUE MAINLY TO TWO THINGS i. e. (1) BY THE DETERMINATION OF A PERSON CALLED ALAN GREENSPAN WH O CONTROLLS THE INTEREST RATE AT HIS DISCRESSION BECAUSE THE GOVERNMENT OWES MONEY TO THE FEDERAL RESERVE WHICH IS NOT OWNED BY OUR GOVERNMENT BUT BY WORLD BANKERS WHO MAKE THEIR FORTUNES BY LENDING TO DIFFERENT NATIONS. WITH THIS IN MIND AND A COMMON IDEA OF USING A 1964 SILVER DIME TO SEE HOW MUCH A DOLLAR IS WORTH IN TODAYS MARKET YOU FIND MOST SELLS FOR ONE DOLLAR. SO IN REALITY WHY DOESNT THE TAX PEOPLE WITH SUCH INTELLEGENCE AS THIS AND CUT TAXES 90% THUS THE ECONOMY COULD SORE AND YOUNG PEOPLE COULD PURCHASE HOMES , EDUCATE CHILDREN AND HAVE A BOOM BACK IN OUR COUNTRY RATHER THAN ENCOURAGING MANUFACTURES TO GO OVERSEAS AND EXPLOIT THE FOREIGNERS AT THE EXPENSE OF PERSONAL GREED AND THE BREAKING OF UNIONS ETC WHICH WILL RECYCLE ITSELF IN MORE SWEAT SHOPS LIKE IT WAS IN THE BEGINNING OF THE INDUSTRIAL AGE. THIS WHOLE THING IS ABOUT MONEY MANIPULATORS. THEIR AGENDA IS POWER ACCOMPLISHED BY GREED AND ON THE BLOOD SWEAT AND TEARS OF THE WORKERS. READ THE HISTORY OF CECIL RHODES THE SO CALLED SCHOLAR WHO WENT INTO AFRICA AND EXPLOITED THE PEOPLE THERE AND KILLED THEM IN ORDER TO GET THE PEOPLE THERE TO WORK FOR NOTHING SO HE COULD PROFIT BY THE RICH RAW MATERIALS THERE. TAXES ARE LOOKED ON AS A NECESSARY EVIL AND OUR ELECTED OFFICALS WHO ARE SUPPOSE TO BE OUR SERVANTS BECOME OUR MASTERS PERMOTING THEIR OWN PERSONAL AGENDAS SUCH AS THEY ARE BE IT EVIL OR SELF INDULGENCIES. MORALS, ETHICS AND PRIDE IN OUR COUNTRY HAS DECLINED AT THE MOST ALARMING RATE SINCE THE 60'S. OUR SCHOOLS NEVER GRADUATED A STUDENT WHO COULD NEITHER READ OR WRITE. A COLLEGE HAD CRITERIA TO BE MET SUCH AS AN ENTERANCE EXAMINATION BEFORE GETTING INTO COLLEGE. THIS WAS LOWERED AND SUBSEQUENTLY DONE AWAY WITH. DRUGS, RACE PROBLEMS, COPS IN THE HALLS OF OUR SCHOOLS. IS THIS WHAT TAX MONEY IS FOR? MAY THE GOD OF ALL GRACE HAVE MERCY ON US AS A NATION AND AS INDIVIDUALS AND GIVE US PRIDE TO BE AMERICANS AGAIN REGARDLESS OF OUR RACE.
JAMES R. GREENE <jrgreene@naxs.com>
PENNINGTON GAP, VA LEE - Sunday, September 06, 1998 at 15:08:33 (EDT)
Jeez, guys. Calm down. Lowercase is more friendly!
Lindy
the country, usa - Tuesday, September 08, 1998 at 19:45:12 (EDT)
lvt would let everyone enjoy life max...money would be worth more
.
- Wednesday, September 09, 1998 at 16:11:41 (EDT)
Greetings! I am not keen as to who the government will be able to exact rent. I live downtown in the small Pennsylvania city. I pay around $500.00 per month on rent. I surmise that if If the government introduces a tax on rent does that mean that everymonth I will sent my rent money to the government as oppose to the landlord. How would the government ensure then that the best property gets the highest taxes? The only thing that comes to my mind is that this will be determined by bidding. The best properties will be have the highest rent because there will be a higher number of indidividuals willing to pay the government its asking price and thus that price will be bid up just like it occurs now. Nevertheless, I am afraid that rent revenues will be unable to match the current receipts of the government. The government will have to be drastically streamlined. Oldthinker Oldthinker unbellyfeel Ingsoc
Oldthinker <oldthinker@hotmail.com>
Pennsylvania, PA USA - Thursday, September 10, 1998 at 21:40:12 (EDT)
Well, Oldth., you must realize that the "rent" you pay each month is not what economists mean by "economic rent". You owe the building owner a payment for use of the building, and also a payment for access to land. These are often lumped together, but economically they are very different. The fund that Geoists say belongs to the community is the *complete* rental value of *land*, apart from buildings and other improvements.

And this course will show you what we can say with theoretical certainty (at least) about the potential of the land value tax to raise revenue!
Lindy Davies
- Friday, September 11, 1998 at 08:03:15 (EDT)


IF THERE IS ANYMORE INFO ON HENRY GEORGES UTOPIAN THOUGHT IT WOULD BE VERY HELPFUL TO ME AND MY GROUP. WE ARE SEARCHING FOR INFO ON LATE NINETEENTH CENTURY THOUGHT ON UTOPIANISM......PLEASE HELP IF YOU CAN.....THANK YOU
Ashley <EMSWHEEL@AOL.COM>
INDIAN HEAD, MD USA - Thursday, September 17, 1998 at 13:21:14 (EDT)
I am not sure if I support any of the taxes today, I know that if we don't have a flat tax, we're hurting ourselves ( middle class) The flat tax would save us more so we could put our money where WE need it.
bluejay <JKendall9@juno.com>
usa - Thursday, September 17, 1998 at 18:40:28 (EDT)
But a flat tax would simply penalize everyone equally, bluej! Read the essay again -- Prof. Foldvary is proposing a way of collecting revenue that does not *penalize* anyone -- it simply collects the value of benefits received by the holders of land! What could be more fair, or less of a burden? Why not find out about it?
Lindy Davies <teacher@henrygeorge.org>
Maine, USA - Friday, September 18, 1998 at 10:36:15 (EDT)
could you be more specific? my feeling is that a flat tax would benefit everyone inversely to wealth, conversely to poverty, and perversely to self-esteem?
.
- Friday, September 25, 1998 at 14:53:59 (EDT)
Yea Fred! The above is so beautiful, thank you... RS
Roger <fms@slip.net>
mill valley, ca - Thursday, October 08, 1998 at 18:04:40 (EDT)
Want to find some answers?


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