Academic journal article The American Journal of Economics and Sociology


Academic journal article The American Journal of Economics and Sociology


Article excerpt


Scope and Definitions

THE PREFACE TO the first edition of Land-Value Taxation Around the World (1955) opened with a descriptive statement that was repeated in the Introduction to the second (1997), and is equally applicable here: "This book deals with the efforts made by various peoples to take for public purposes their geographically and socially produced land values."

Taking land values for public purposes is an object of which the American political economist and social philosopher, Henry George (1839-1897), is universally acknowledged to have been the most famous, eloquent, and thoroughgoing exponent. In his best-known work, Progress and Poverty (1879), and in numerous other books, articles, and speeches, he called for the public capture of nearly all land value (i.e., economic rent), and the proportionate abolition of taxes on the products of private labor and capital.

Advocates of land-value taxation range from those at one extreme, who view it as the sovereign path to social justice, to those at the other, who see it merely as one of several useful fiscal tools to garner local revenue and/or stimulate desirable development. Between these two extremes--whole-hog "single-taxers" and limited land-value taxers--may be located a diverse spectrum of opinion including those who regard themselves as Georgist in a general sense, but who do not view "singleness" as precluding certain other levies such as users' charges to supplement the public appropriation of land values. However, even "Georgists of the looser observance" would agree that land-value taxes should be set-off against taxes on the rewards of productive effort instead of being simply piled on top of them. Any land-value taxer unwilling to accept that proviso would not be a Georgist but, at most, a "fellow-traveler."

Land-value taxation is understood in all three editions to encompass more than a literal construction of the term would indicate, for the public capture of "geographically and socially produced land values" sometimes takes other forms with respect to method. Since "land" in economics is a synonym for Nature, severance taxes [1] on extractive resources may (under certain circumstances and either singly or in combination) be an appropriate mechanism for such capture. Where land is publicly held, its rent may flow directly into public coffers without passing in the form of taxes through the hands of private owners. Some attention will be paid to both of these alternative approaches in this volume, but the primary focus will be on land-value taxation in the narrower sense, i.e., on site-value rating.

Severance taxes of one type or another are so widespread that anything like a full survey of them would enlarge this work unduly. They are, however, treated to some extent in several chapters, most notably with respect to oil in the chapter on Abu Dhabi, with respect to timber in the chapter on Finland, and with respect to a variety of natural resources in the chapter on Canada.

Public ownership of land in an overall framework of capitalism is a distinctive characteristic of Hong Kong and Singapore, and leasehold rent a major segment of their public revenue. This is described in detail in the chapter by Professor Phang.

Obviously, some economic rent is appropriated by public authority in all countries through other means--most notably income, estate, and "capital gains" taxes. But (with a few exceptions such as South Korea's differential levy on "capital gains") in most such cases it is lumped together with other returns in such a way as to defy separate identification, and hence cannot be dealt with in these pages. One should note, however, that land tends to enjoy so many special tax advantages that there is reason to believe that the land-based portion of public revenue from these sources is much smaller than might otherwise be supposed.

Efforts to capture land values for the public through legislation not specifically designated for that purpose have generally proven ineffectual in the long run. …

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