Understanding Economics

Lesson 9: The Effects of George's Remedy

Please read chapters 34 - 37 and complete Henry George's Remedy.

1. How does the contrast between New Hampshire and New Mexico demonstrate the soundness of George's remedy?           | Supplement |

2. What is the connection between the "Resource Curse" and the overall problem of poverty?           | Supplement |

3. Give some examples of           | Text | Supplement |

a) indirect taxes
b) regressive taxes

4. Rate the following kinds of tax according to the canons of taxation

a) income tax
b) sales tax
c) conventional property tax
d) land value tax

5. Compare George's proposal to the modern theory of "broad-based" taxation.           | Supplement |

6. Which of the following is not an effect of taxes on production?           | Text |

a. Decrease of land rent.
b. More unemployment.
c. Decrease in the general rate of wages.
d. Increased complexity of government.
e. Taxes on production cause all of those things.
7. Unlike other taxes, a tax on land values cannot be shifted to the user of land because           | Text |

a. users of land already pay all that they can afford.
b. the supply of land is fixed.
c. the margin of production remains unchanged.
d. All of the above.
e. None of the above; it can be shifted.
8. Removing taxes on production           | Text |

a. is more important that collecting rent for revenue, because of the heavy tax burden on industry.
b. would increase rent.
c. would increase the return to capital goods.
d. would lead to a trade surplus.
9. What would be the effect on production if           | Text |

a) taxes on wages and interest were abolished?
b) land rents were publicly collected?

10. How do we know that the full public collection of land rent would raise the returns to labor and capital?

11. If the full rental value of land were taken in taxation, what would happen to           | Supplement |

a) the selling price of land?
b) the rental value of land?

12. If land values were the source of public revenue, what would be the effect on           | Text | Supplement |

a) working farmers?
b) urban apartment dwellers?

13. Compare George's remedy with the "enterprise zones" proposed to alleviate urban decay and stagnation.           | Supplement |

14. Under the Georgist remedy,

a. inflation could be controlled without increasing unemployment.
b. interest rates would be set by the market, not by central banks.
c. employers would compete to hire scarce workers.
d. All of the above.
e. a and b, but not c.