An economic ideology distinguishes itself from economic theory in being normative rather than just explanatory in its approach. Economic ideologies express perspectives on the way an economy should run and to what end, whereas the aim of economic theories is to create accurate explanatory models to describe how an economy currently functions. However, the two are closely interrelated, as underlying economic ideology influences the methodology and theory employed in analysis. The diverse ideology and methodology of the 74 Nobel laureates in economics speaks to such interrelation.
In economics, land comprises all naturally occurring resources as well as geographic land. Examples include particular geographical locations, mineral deposits, forests, fish stocks, atmospheric quality, geostationary orbits, and portions of the electromagnetic spectrum. Supply of these resources is fixed.
The commons is the cultural and natural resources accessible to all members of a society, including natural materials such as air, water, and a habitable earth. These resources are held in common, not owned privately. Commons can also be understood as natural resources that groups of people manage for individual and collective benefit. Characteristically, this involves a variety of informal norms and values employed for a governance mechanism. Commons can be also defined as a social practice of governing a resource not by state or market but by a community of users that self-governs the resource through institutions that it creates.
In economics, economic rent is any payment to an owner or factor of production in excess of the costs needed to bring that factor into production. In classical economics, economic rent is any payment made or benefit received for non-produced inputs such as location (land) and for assets formed by creating official privilege over natural opportunities. In the moral economy of neoclassical economics, economic rent includes income gained by labor or state beneficiaries of other "contrived" exclusivity, such as labor guilds and unofficial corruption.
Pollution is the introduction of contaminants into the natural environment that cause adverse change. Pollution can take the form of chemical substances or energy, such as noise, heat or light. Pollutants, the components of pollution, can be either foreign substances/energies or naturally occurring contaminants. Pollution is often classed as point source or nonpoint source pollution. In 2015, pollution killed 9 million people in the world.
In property law, a title is a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership. Conveyance of the document may be required in order to transfer ownership in the property to another person. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it. In many cases, possession and title may each be transferred independently of the other. For real property, land registration and recording provide public notice of ownership information.
Adam Smith was a Scottish economist, philosopher and author as well as a moral philosopher, a pioneer of political economy and a key figure during the Scottish Enlightenment, also known as ''The Father of Economics'' or ''The Father of Capitalism''. Smith wrote two classic works, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The latter, often abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work of economics. In his work, Adam Smith introduced his theory of absolute advantage.
David Ricardo was a British political economist, one of the most influential of the classical economists along with Thomas Malthus, Adam Smith and James Mill.
A deadweight loss, also known as excess burden or allocative inefficiency, is a loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved. That can be caused by monopoly pricing in the case of artificial scarcity, an externality, a tax or subsidy, or a binding price ceiling or price floor such as a minimum wage.
Georgist ideas were popular and influential during the late 19th and early 20th century. Political parties, institutions and communities were founded based on Georgist principles during that time. Early devotees of Henry George's economic philosophy were often termed Single Taxers for their political goal of raising public revenue mainly from a land value tax, although Georgists endorsed multiple forms of rent capture (e.g., seigniorage) as legitimate. The term Georgism was invented later, and some prefer the term geoism to distinguish their beliefs from those of Henry George.
Seigniorage, also spelled seignorage or seigneurage, is the difference between the value of money and the cost to produce and distribute it. The term can be applied in two ways:
Henry George is best known for popularizing the argument that government should be funded by a tax on land rent rather than taxes on labor. George believed that although scientific experiments could not be performed in political economy, theories could be tested by comparing different societies with different conditions and by thought experiments about the effects of various factors. Applying this method, he concluded that many of the problems that beset society, such as poverty, inequality, and economic booms and busts, could be attributed to the private ownership of the necessary resource, land. In his most celebrated book, Progress and Poverty, George argues that the appropriation of land for private use contributes to persistent poverty in spite of technological progress, and causes economies to exhibit a tendency toward boom and bust cycles. According to George, people justly own what they create, but that natural opportunities and land belong equally to all.
Henry George was an American political economist and journalist. His writing was immensely popular in the 19th century, and sparked several reform movements of the Progressive Era. His writings also inspired the economic philosophy known as Georgism, based on the belief that people should own the value they produce themselves, but that the economic value derived from land should belong equally to all members of society.
A land/location value tax (LVT), also called a site valuation tax, split rate tax, or site-value rating, is an ad valorem levy on the unimproved value of land. Unlike property taxes, it disregards the value of buildings, personal property and other improvements to real estate. A land value tax is generally favored by economists as it does not cause economic inefficiency, and it tends to reduce inequality.
Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff. Payroll taxes generally fall into two categories: deductions from an employee’s wages, and taxes paid by the employer based on the employee's wages. The first kind are taxes that employers are required to withhold from employees' wages, also known as withholding tax, pay-as-you-earn tax (PAYE), or pay-as-you-go tax (PAYG) and often covering advance payment of income tax, social security contributions, and various insurances. The second kind is a tax that is paid from the employer's own funds and that is directly related to employing a worker. These can consist of fixed charges or be proportionally linked to an employee's pay. The charges paid by the employer usually cover the employer's funding of the social security system, medicare, and other insurance programs. It is sometimes claimed that the economic burden of the payroll tax falls almost entirely on the worker, regardless of whether the tax is remitted by the employer or the employee, as the employers’ share of payroll taxes is passed on to employees in the form of lower wages than would otherwise be paid. Because payroll taxes fall exclusively on wages and not on returns to financial or physical investments, payroll taxes may contribute to underinvestment in human capital such as higher education.
The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return.
—Henry George, Progress and Poverty, Book VIII, Chapter 3
George believed there was an important distinction between common and collective property. Although equal rights to land might be achieved by nationalizing land and then leasing it to private users, George preferred taxing unimproved land value and leaving the control of land mostly in private hands. George's reasoning for leaving land in private control and slowly shifting to land value tax was that it would not penalize existing owners who had improved land and would also be less disruptive and controversial in a country where land titles have already been granted.
Georgists have observed that privately created wealth is socialized via the tax system (e.g., through income and sales tax), while socially created wealth in land values are privatized in the price of land titles and bank mortgages. The opposite would be the case if land rents replaced taxes on labor as the main source of public revenue; socially created wealth would become available for use by the community, while the fruits of labor would remain private. According to Georgists, a land value tax can be considered a user fee instead of a tax, since it is related to the market value of socially created locational advantage, the privilege to exclude others from locations. Assets consisting of commodified privilege can be considered as wealth since they have exchange value, similar to taxi medallions.[failed verification] A land value tax, charging fees for exclusive use of land, as a means of raising public revenue is also a progressive tax tending to reduce economic inequality, since it applies entirely to ownership of valuable land, which is correlated with income, and there is generally no means by which landlords can shift the tax burden onto tenants or laborers.
Standard economic theory suggests that a land value tax would be extremely efficient – unlike other taxes, it does not reduce economic productivity.Milton Friedman described Henry George's tax on unimproved value of land as the "least bad tax", since unlike other taxes, it would not impose an excess burden on economic activity (leading to zero or even negative "deadweight loss"); hence, a replacement of other more distortionary taxes with a land value tax would improve economic welfare. As land value tax can improve the use of land and redirect investment toward productive, non-rent-seeking activities, it could even have a negative deadweight loss that boosts productivity. Because land value tax would apply to foreign land speculators, the Australian Treasury estimated that land value tax was unique in having a negative marginal excess burden, meaning that it would increase long-run living standards.
Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground. More or less can be got for it according as the competitors happen to be richer or poorer, or can afford to gratify their fancy for a particular spot of ground at a greater or smaller expense. In every country the greatest number of rich competitors is in the capital, and it is there accordingly that the highest ground-rents are always to be found. As the wealth of those competitors would in no respect be increased by a tax upon ground-rents, they would not probably be disposed to pay more for the use of the ground. Whether the tax was to be advanced by the inhabitant, or by the owner of the ground, would be of little importance. The more the inhabitant was obliged to pay for the tax, the less he would incline to pay for the ground; so that the final payment of the tax would fall altogether upon the owner of the ground-rent.
Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry. The annual produce of the land and labour of the society, the real wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground-rents and the ordinary rent of land are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them. ... Nothing can be more reasonable than that a fund which owes its existence to the good government of the state should be taxed peculiarly, or should contribute something more than the greater part of other funds, towards the support of that government.
Benjamin Franklin and Winston Churchill made similar distributional and efficient arguments for taxing land rents. They noted that the costs of taxes and the benefits of public spending always eventually apply to and enrich, respectively, the owners of land. Therefore, they believed it would be best to defray public costs and recapture value of public spending by applying public charges directly to owners of land titles, rather than harming public welfare with taxes assessed against beneficial activities such as trade and labor.
Henry George wrote that his plan for a high land value tax would cause people "to contribute to the public, not in proportion to what they produce ... but in proportion to the value of natural [common] opportunities that they hold [monopolize]". He went on to explain that "by taking for public use that value which attaches to land by reason of the growth and improvement of the community", it would, "make the holding of land unprofitable to the mere owner, and profitable only to the user".
A high land value tax would discourage speculators from holding valuable natural opportunities (like urban real estate) unused or only partially used. Henry George claimed this would have many benefits, including the reduction or elimination of tax burdens from poorer neighborhoods and agricultural districts; the elimination of a multiplicity of taxes and expensive obsolete government institutions; the elimination of corruption, fraud, and evasion with respect to the collection of taxes; the enablement of true free trade; the destruction of monopolies; the elevation of wages to the full value of labor; the transformation of labor saving inventions into blessings for all; and the equitable distribution of comfort, leisure, and other advantages that are made possible by an advancing civilization. In this way, the vulnerability that market economies have to credit bubbles and property manias would be reduced.
Sources of economic rent and related policy interventions
Income flow resulting from payments for restricted access to natural opportunities or for contrived privileges over geographic regions is termed economic rent. Georgists argue that economic rent of land, legal privileges, and natural monopolies should accrue to the community, rather than private owners. In economics, "land" is everything that exists in nature independent of human activity. George explicitly included climate, soil, waterways, mineral deposits, laws/forces of nature, public ways, forests, oceans, air, and solar energy in the category of land. While the philosophy of Georgism does not say anything definitive about specific policy interventions needed to address problems posed by various sources of economic rent, the common goal among modern Georgists is to capture and share (or reduce) rent from all sources of natural monopoly and legal privilege.
Henry George shared the goal of modern Georgists to socialize or dismantle rent from all forms of land monopoly and legal privilege. However, George emphasized mainly his preferred policy known as land value tax, which targeted a particular form of unearned income known as ground rent. George emphasized ground-rent because basic locations were more valuable than other monopolies and everybody needed locations to survive, which he contrasted with the less significant streetcar and telegraph monopolies, which George also criticized. George likened the problem to a laborer traveling home who is waylaid by a series of highway robbers along the way, each who demand a small portion of the traveler's wages, and finally at the very end of the road waits a robber who demands all that the traveler has left. George reasoned that it made little difference to challenge the series of small robbers when the final robber remained to demand all that the common laborer had left. George predicted that over time technological advancements would increase the frequency and importance of lesser monopolies, yet he expected that ground rent would remain dominant. George even predicted that ground-rents would rise faster than wages and income to capital, a prediction that modern analysis has shown to be plausible, since the supply of land is fixed.
Common ground rent is still the primary emphasis of Georgists because of its large value and the known diseconomies of misused land. However, there are other sources of rent that are theoretically analogous to ground-rent and are debated topics of Georgists. The following are some sources of economic rent.
Extractable resources (minerals and hydrocarbons)
Privileges that are less location dependent but that still exclude others from natural opportunities (patents)
Where free competition is impossible, such as telegraphs, water, gas, and transportation, George wrote, "[S]uch business becomes a proper social function, which should be controlled and managed by and for the whole people concerned." Georgists were divided by this question of natural monopolies and often favored public ownership only of the rents from common rights-of-way, rather than public ownership of utility companies themselves.
Pollution degrades the value of what Georgists consider to be commons. Because pollution is a negative contribution, a taking from the commons or a cost imposed on others, its value is economic rent, even when the polluter is not receiving an explicit income. Therefore, to the extent that society determines pollution to be harmful, most Georgists propose to limit pollution with taxation or quotas that capture the resulting rents for public use, restoration, or a citizen's dividend.
Georgism is related to the school of ecological economics, since both propose market based restrictions for pollution. The schools are compatible in that they advocate using similar tools as part of a conservation strategy, but they emphasize different aspects. Conservation is the central issue of ecology, whereas economic rent is the central issue of geoism. Ecological economists might price pollution fines more conservatively to prevent inherently unquantifiable damage to the environment, whereas Georgists might emphasize mediation between conflicting interests and human rights.Geolibertarianism, a market oriented branch of geoism, tends to take a direct stance against what it perceives as burdensome regulation and would like to see auctioned pollution quotas or taxes replace most command and control regulation.
Since ecologists are primarily concerned with conservation, they tend to emphasize less the issue of equitably distributing scarcity/pollution rents, whereas Georgists insist that unearned income not accrue to those who hold title to natural assets and pollution privilege. To the extent that geoists recognize the effect of pollution or share conservationist values, they will agree with ecological economists about the need to limit pollution, but geoists will also insist that pollution rents generated from those conservation efforts do not accrue to polluters and are instead used for public purposes or to compensate those who suffer the negative effects of pollution. Ecological economists advocate similar pollution restrictions but, emphasizing conservation first, might be willing to grant private polluters the privilege to capture pollution rents. To the extent that ecological economists share the geoist view of social justice, they would advocate auctioning pollution quotas instead of giving them away for free. This distinction can be seen in the difference between basic cap and trade and the geoist variation, cap and share, a proposal to auction temporary pollution permits, with rents going to the public, instead of giving pollution privilege away for free to existing polluters or selling perpetual permits.
In practice, the elimination of all other taxes implies a very great land value tax, greater than any currently existing land tax. Introducing a land value tax greater than the value of existing taxes would, at an uncertain point, inevitably cause the price of all land titles to decrease. George did not believe landowners should be compensated, and described the issue as being analogous to compensation for former slave owners. Other geoists disagree on the question of compensation; some advocate complete compensation while others endorse only enough compensation required to achieve Georgist reforms. Geoists have also long differed from George as to the degree of rent capture needed. Historically, those who advocated for public rent tax only great enough to replace other taxes were known as endorsers of single tax limited.
Synonyms and variants
Most early advocacy groups described themselves as Single Taxers, and George reluctantly accepted "single tax" as an accurate name for his main political goal—the repeal of all unjust or inefficient taxes, to be replaced with a land value tax (LVT).
Some modern proponents are dissatisfied with the name Georgist. While Henry George was well known throughout his life, he has been largely forgotten by the public and the idea of a single tax of land predates him. Some now prefer the term geoism, with the meaning of geo (from Greek γῆgē "earth, land", as incidentally is in Greek the first compound of the name George (whence Georgism) < (Gr.) Geōrgios < geōrgos "farmer" or geōrgia "agriculture, farming" < gē + ergon "work") deliberately ambiguous. The terms Earth Sharing,geonomics, and geolibertarianism (see Libertarianism) are also used by some Georgists. These terms represent a difference of emphasis, and sometimes real differences about how land rent should be spent (citizen's dividend or just replacing other taxes); but all agree that land rent should be recovered from its private recipients.
Some geoists believe that partially compensating landowners is a politically expedient compromise necessary for achieving reform. For similar reasons, others propose capturing only future land value increases, instead of all land rent.
Though Georgism has historically been considered as a radically progressive or socialist ideology, some libertarians and minarchists take the position that limited social spending should be financed using Georgist concepts of rent value capture, but that not all land rent should be captured. Today, this relatively conservative adaptation is usually considered incompatible with true geolibertarianism, which requires that excess rents be gathered and then distributed back to residents. During Henry George's time, this restrained Georgist philosophy was known as "single tax limited", as opposed to "single tax unlimited". Henry George disagreed with the limited interpretation but accepted its adherents (e.g., Thomas Shearman) as legitimate "single-taxers" [Georgists]. (See Milton Friedman in "Critical reception")
In the UK during 1909, the Liberal Government included a land tax as part of several taxes in the People's Budget intended to redistribute wealth (including a progressively graded income tax and an increase of inheritance tax). This caused a crisis which resulted indirectly in reform of the House of Lords. The budget was passed eventually—but without the land tax. In 1931, the minority Labour Government passed a land value tax as part III of the 1931 Finance act. However, this was repealed in 1934 by the National Government before it could be implemented.
Economists still generally favor a land value tax.Milton Friedman publicly endorsed the Georgist land value tax as the "least bad tax".Joseph Stiglitz stated that: "Not only was Henry George correct that a tax on land is non-distortionary, but in an equilibrium society … tax on land raises just enough revenue to finance the (optimally chosen) level of government expenditure." He dubbed this proposition the Henry George theorem.
Several communities were also initiated with Georgist principles during the height of the philosophy's popularity. Two such communities that still exist are Arden, Delaware, which was founded in 1900 by Frank Stephens and Will Price, and Fairhope, Alabama, which was founded in 1894 under the auspices of the Fairhope Single Tax Corporation. Some established communities in the United States also adopted Georgist tax policies. A Georgist in Houston, Texas, Joseph Jay "J.J." Pastoriza, promoted a Georgist club in that city established in 1890. Years later, in his capacity as a city alderman, he was selected to serve as Houston Tax Commissioner, and promulgated a "Houston Plan of Taxation" in 1912. Improvements to land and merchants' inventories were taxed at 25 percent of appraised value, unimproved land was taxed at 70 percent of appraisal, and personal property was exempt. This Georgist tax continued until 1915, when two courts struck it down as violating the Texas Constitution in 1915. This quashed efforts in several other Texas cities which took steps towards implementing the Houston Plan in 1915: Beaumont, Corpus Christi, Galveston, San Antonio, and Waco.
The German protectorate of the Kiautschou Bay concession in Jiaozhou Bay, China fully implemented Georgist policy. Its sole source of government revenue was the land value tax of six percent which it levied in its territory. The German government had previously had economic problems with its African colonies caused by land speculation. One of the main reasons for using the land value tax in Jiaozhou Bay was to eliminate such speculation, which the policy achieved. The colony existed as a German protectorate from 1898 until 1914, when seized by Japanese and British troops. In 1922 the territory was returned to China.
Georgist ideas were also adopted to some degree in Australia, Hong Kong, Singapore, South Africa, South Korea, and Taiwan. In these countries, governments still levy some type of land value tax, albeit with exemptions. Many municipal governments of the US depend on real property tax as their main source of revenue, although such taxes are not Georgist as they generally include the value of buildings and other improvements. One exception is the town of Altoona, Pennsylvania, which for a time in the 21st century only taxed land value, phasing in the tax in 2002, relying on it entirely for tax revenue from 2011, and ending it 2017; the Financial Times noted that "Altoona is using LVT in a city where neither land nor buildings have much value".
The Henry George Foundation continues to promote the ideas of Henry George in the UK.The IU is an international umbrella organisation that brings together organizations worldwide that seek land value tax reform.
The economist Alfred Marshall believed that George's views in Progress and Poverty were dangerous, even predicting wars, terror, and economic destruction. Specifically, Marshall was upset about the idea of rapid change and the unfairness of not compensating existing landowners. In his lectures on Progress and Poverty, Marshall opposed George's position on compensation while fully endorsing his ultimate remedy. So far as land value tax moderately replaced other taxes and did not cause the price of land to fall, Marshall supported land value taxation on economic and moral grounds, suggesting that a three or four percent tax on land values would fit this condition. After implementing land taxes, governments would purchase future land values at discounted prices and take ownership after 100 years. Marshall asserted that this plan, which he strongly supported, would end the need for a tax collection department of government. For newly formed countries where land was not already private, Marshall advocated implementing George's economic proposal immediately.
Karl Marx considered the Single Tax platform as a regression from the transition to communism and referred to Georgism as "Capitalism’s last ditch". Marx argued that, "The whole thing is ... simply an attempt, decked out with socialism, to save capitalist domination and indeed to establish it afresh on an even wider basis than its present one." Marx also criticized the way land value tax theory emphasizes the value of land, arguing that, "His fundamental dogma is that everything would be all right if ground rent were paid to the state." Georgists such as Fred Harrison (2003) replied to these Marxist objections.
Richard T. Ely, known as the "Father of Land Economics", agreed with the economic arguments for Georgism but believed that correcting the problem the way Henry George wanted (without compensation) was unjust to existing landowners. In explaining his position, Ely wrote that "If we have all made a mistake, should one party to the transaction alone bear the cost of the common blunder?"
John R. Commons supported Georgist economics, but opposed what he perceived as an environmentally and politically reckless tendency for advocates to rely on a one-size-fits-all approach to tax reform, specifically, the "single tax" framing. Commons concluded The Distribution of Wealth, with an estimate that "perhaps 95% of the total values represented by these millionnaire [sic] fortunes is due to those investments classed as land values and natural monopolies and to competitive industries aided by such monopolies", and that "tax reform should seek to remove all burdens from capital and labour and impose them on monopolies". However, he criticized Georgists for failing to see that Henry George's anti-monopoly ideas must be implemented with a variety of policy tools. He wrote, "Trees do not grow into the sky—they would perish in a high wind; and a single truth, like a single tax, ends in its own destruction." Commons uses the natural soil fertility and value of forests as an example of this destruction, arguing that a tax on the in situ value of those depletable natural resources can result in overuse or over-extraction. Instead, Commons recommends an income tax based approach to forests similar to a modern Georgist severance tax.
Other contemporaries such as Austrian economist Frank Fetter and neoclassical economist John Bates Clark argued that it was impractical to maintain the traditional distinction between land and capital, and used this as a basis to attack Georgism. Mark Blaug, a specialist in the history of economic thought, credits Fetter and Clark with influencing mainstream economists to abandon the idea "that land is a unique factor of production and hence that there is any special need for a special theory of ground rent" claiming that "this is in fact the basis of all the attacks on Henry George by contemporary economists and certainly the fundamental reason why professional economists increasingly ignored him".
Robert Solow endorsed the theory of Georgism, but is wary of the perceived injustice of expropriation. Solow stated that taxing away expected land rents "would have no semblance of fairness"; however, Georgism would be good to introduce where location values were not already privatized or if the transition could be phased in slowly.
Milton Friedman agreed that "the Henry George argument" is "the least bad" means of raising needed public revenue. However, Friedman viewed Georgism as partially immoral, due to a difference of opinion about the validity of vested property rights in land. Georgists agree with Friedman that land titles should remain private. However, they believe that the private capture of unimproved land-rents is inherently unjust, drawing comparisons to slavery.
George has also been accused of exaggerating the importance of his "all-devouring rent thesis" in claiming that it is the primary cause of poverty and injustice in society. George argued that the rent of land increased faster than wages for labor because the supply of land is fixed. Modern economists, including Ottmar Edenhofer have demonstrated that George's assertion is plausible but was more likely to be true during George's time than now.
An early criticism of Georgism was that it would generate too much public revenue and result in unwanted growth of government, but later critics argued that it would not generate enough income to cover government spending. Joseph Schumpeter concluded his analysis of Georgism by stating that, "It is not economically unsound, except that it involves an unwarranted optimism concerning the yield of such a tax." Economists who study land conclude that Schumpeter's criticism is unwarranted because the rental yield from land is likely much greater than what modern critics such as Paul Krugman suppose. Krugman agrees that land value taxation is the best means of raising public revenue but asserts that increased spending has rendered land rent insufficient to fully fund government. Georgists have responded by citing studies and analyses implying that land values of nations like the US, UK, and Australia are more than sufficient to fund all levels of government.
Austrian economist Friedrich Hayek credited early enthusiasm for Henry George with developing his interest in economics. Later, Hayek said that the theory of Georgism would be very strong if assessment challenges did not result in unfair outcomes, but he believed that they would.
After studying Progress and Poverty, Tyler Cowen concluded, "George had some good economic arguments, but [. . .] was politically naive. At the margin we should move in George’s direction, but ultimately landowners have to be part of the building coalitions rather than pure victims."
A tax is a compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund various public expenditures. A failure to pay, along with evasion of or resistance to taxation, is punishable by law. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent. The first known taxation took place in Ancient Egypt around 3000–2800 BC.
William Spencer Vickrey was a Canadian-born professor of economics and Nobel Laureate. Vickrey was awarded the 1996 Nobel Memorial Prize in Economic Sciences with James Mirrlees for their research into the economic theory of incentives under asymmetric information, becoming the only Nobel laureate born in British Columbia.
Classical economics or classical political economy is a school of thought in economics that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. Its main thinkers are held to be Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Robert Malthus, and John Stuart Mill. These economists produced a theory of market economies as largely self-regulating systems, governed by natural laws of production and exchange.
Rent-seeking is a concept in public choice theory as well as in economics, that involves seeking to increase one's share of existing wealth without creating new wealth. Rent-seeking results in reduced economic efficiency through misallocation of resources, reduced wealth-creation, lost government revenue, heightened income inequality, and potential national decline.
Geolibertarianism is a political and economic ideology which integrates libertarianism with Georgism. It is a moderate, softly propertarian strain of left-libertarian thought, often associated with radical centrism.
A single tax is a system of taxation based mainly or exclusively on one tax, typically chosen for its special properties, often being a tax on land value. The idea of a single tax on land values was proposed independently by John Locke and Baruch Spinoza in the 17th century. The French physiocrats later coined the term impôt unique because of the unique characteristics of land and rent.
Harold Hotelling was an American mathematical statistician and an influential economic theorist, known for Hotelling's law, Hotelling's lemma, and Hotelling's rule in economics, as well as Hotelling's T-squared distribution in statistics. He also developed and named the principal component analysis method widely used in finance, statistics and computer science.
John Rogers Commons was an American institutional economist, Georgist, progressive and labor historian at the University of Wisconsin–Madison.
Mason Gaffney is an American economist and a major critic of Neoclassical economics from a Georgist point of view. He earned his B.A. in 1948 from Reed College in Portland, Oregon. Gaffney first read Henry George's masterwork Progress and Poverty as a high school junior. After serving in the southwest Pacific during World War II, this interest led him in 1956 to get a Ph.D. in Economics at the University of California, Berkeley. There he addressed his teachers' skepticism about Georgism with a dissertation entitled "Land Speculation as an Obstacle to Ideal Allocation of Land." Gaffney has been Professor of Economics at the University of California, Riverside since 1976.
Fred Emanuel Foldvary is a lecturer in economics at San Jose State University, California, and a research fellow at The Independent Institute. He previously taught at Santa Clara University and other colleges. He is also a commentator and senior editor for the online journal The Progress Report and an associate editor of the online journal Econ Journal Watch. He serves on the board of directors for the Robert Schalkenbach Foundation. He lives in the San Francisco Bay Area in California.
The law of rent was formulated by David Ricardo around 1809, and presented in its most developed form in his magnum opus, On the Principles of Political Economy and Taxation. This is the origin of the term Ricardian rent. Ricardo's formulation of the law was the first clear exposition of the source and magnitude of rent, and is among the most important and firmly established principles of economics.
The Henry George theorem, named for 19th century U.S. political economist and activist Henry George, states that under certain conditions, aggregate spending by government on public goods will increase aggregate rent based on land value more than that amount, with the benefit of the last marginal investment equaling its cost. This general relationship, first noted by the French physiocrats in the 18th century, is one basis for advocating the collection of a tax based on land rents to help defray the cost of public investment that helps create land values. Henry George popularized this method of raising public revenue in his works, which launched the 'single tax' movement.
Land value taxation has a long history in the United States dating back from Physiocrat influence on Thomas Jefferson and Benjamin Franklin. It is most famously associated with Henry George and his book Progress and Poverty (1879), which argued that because the supply of land is fixed and its location value is created by communities and public works, the economic rent of land is the most logical source of public revenue. and which had considerable impact on turn-of-the-century reform movements in America and elsewhere. Every single state in the United States has some form of property tax on real estate and hence, in part, a tax on land value. However, Pennsylvania in particular has seen local attempts to rely more heavily on the taxation of land value.
Land&Liberty is a quarterly magazine of popular political economics: its focus is the relationship between land and natural resource rights and 21st century economic policy. Published in the UK it covers international affairs and events from a global perspective.
Prosper Australia is a non-profit association incorporated in the State of Victoria, Australia dedicated to reforming taxes onto land as articulated by Adam Smith, the Physiocrats, John Stuart Mill, and most notably by Henry George in Progress and Poverty.
Harry Gunnison Brown was a Georgist economist teaching at Yale in the early 20th century. Paul Samuelson named Brown in a list of "American saints in economics" that included only 6 other economists born after 1860.
The Robert Schalkenbach Foundation is an American non-profit educational organization and publisher dedicated to the social and economic philosophy of Henry George.
1 2 Heavey, Jerome F. (July 2003). "Comments on Warren Samuels' "Why the Georgist movement has not succeeded"". American Journal of Economics and Sociology. 62 (3): 593–99. doi:10.1111/1536-7150.00230. JSTOR3487813. human beings have an inalienable right to the product of their own labor
1 2 Binswanger-Mkhize, Hans P; Bourguignon, Camille; Brink, Rogier van den (2009). Agricultural Land Redistribution: Toward Greater Consensus. World Bank. A land tax is considered a progressive tax in that wealthy landowners normally should be paying relatively more than poorer landowners and tenants. Conversely, a tax on buildings can be said to be regressive, falling heavily on tenants who generally are poorer than the landlords
↑ Niman, Neil B. "Henry George and the Intellectual Foundations of the Open Source Movement"(PDF). Robert Schalkenbach Foundation. Retrieved 16 June 2014. "A modern counterpart to the nineteenth century focus on land can be found in the twentieth century concern with the establishment of intellectual property rights that fence off a portion of the creative commons in order to construct temporary monopolies."
↑ Fox, Stephen R. The American Conservation Movement: John Muir and His Legacy. Madison, WI: U of Wisconsin, 1985.
1 2 3 Daly, Herman E., and Joshua C. Farley. Ecological Economics: Principles and Applications. Washington: Island, 2004.
↑ Backhaus, Jurgen, and J. J. Krabbe. "Henry George's Contribution to Modern Environmental Policy: Part I, Theoretical Postulates." American Journal of Economics and Sociology 50.4 (1991): 485-501. Weborn 14 Aug. 2014.
↑ Steven, Cord, "How Much Revenue would a Full Land Value Tax Yield? Analysis of Census and Federal Reserve Data". American Journal of Economics and Sociology 44 (3) (July 1985), pp. 279–293
↑ Steven Cord, "Land Rent is 20% of U.S. National Income for 1986", Incentive Taxation, July/August 1991, pp. 1–2.
↑ Miles, Mike. 1990. "What Is the Value of all U.S. Real Estate?" Real Estate Review 20 (2)(Summer): 69–75.
↑ Nicolaus Tideman and Florenz Plassman, "Taxed Out of Work and Wealth: The Costs of Taxing Labor and Capital", in The Losses of Nations: Deadweight Politics versus Public Rent Dividends (London: Othila Press, 1988), pp. 146–174.
↑ Andelson, Robert V. (January 2000). "On Separating the Landowner's Earned and Unearned Increment: A Georgist Rejoinder to F. A. Hayek". American Journal of Economics and Sociology. 59 (1): 109–17. doi:10.1111/1536-7150.00016. Hayek wrote, "It was a lay enthusiasm for Henry George which led me to economics."
↑ Brown, H. G. "A Defense of the Single Tax Principle." The Annals of the American Academy of Political and Social Science 183.1 (1936): 63–69. Quote: "The truth is that I recognize the fundamental justice and common sense of the single-tax idea. But that any other tax than a tax on land values is always and everywhere wrong, regardless of public needs or the nature of this other tax, I do not maintain."
↑ Harter, Lafayette G. John R. Commons, His Assault on Laissez-faire. Corvallis: Oregon State UP, 1962. pp. 21, 32, 36, 38.
↑ "Two Centuries of Economic Thought on Taxation of Land Rents." In Richard Lindholm and Arthur Lynn, Jr., (eds.), Land Value Taxation in Thought and Practice. Madison: Univ. of Wisconsin Press, 1982, pp. 151–96.
↑ Brue, Stanley; Randy, Grant (2012). The Evolution of Economic Thought (Supplemental Biography of John Rogers Commons for chapter 19 of the online edition of The Evolution of Economic Thought ed.). Cengage Learning. "After reading Henry George's Progress and Poverty," Commons "became a single-taxer."
↑ Edenhofer, Ottmar (2013). "Hypergeorgism: When is Rent Taxation as a Remedy for Insufficient Capital Accumulation Socially Optimal?". SSRN2232659. Extending and modifying the tenet of georgism, we propose that this insight be called hypergeorgism." "From a historical perspective, our result may be closer to Henry George’s original thinking than georgism or the neoclassical Henry George Theorems.Cite journal requires |journal= (help)
↑ Edenhofer, Ottmar (2013-06-25). "Financing Public Capital Through Land Rent Taxation: A Macroeconomic Henry George Theorem". SSRN2284745.Cite journal requires |journal= (help)
↑ Quotes from Nobel Prize Winners Herbert Simon stated in 1978: "Assuming that a tax increase is necessary, it is clearly preferable to impose the additional cost on land by increasing the land tax, rather than to increase the wage tax – the two alternatives open to the City (of Pittsburgh). It is the use and occupancy of property that creates the need for the municipal services that appear as the largest item in the budget – fire and police protection, waste removal, and public works. The average increase in tax bills of city residents will be about twice as great with wage tax increase than with a land tax increase."
↑ Stiglitz, Joseph (2 December 2010). "Working Paper No. 6: Principles and Guidelines for Deficit Reduction"(PDF). Next New Deal The Blog of the Roosevelt Institute. The Roosevelt Institute. p.5. Archived from the original(PDF) on 6 December 2010. Retrieved 22 February 2017. One of the general principles of taxation is that one should tax factors that are inelastic in supply, since there are no adverse supply side effects. Land does not disappear when it is taxed. Henry George, a great progressive of the late nineteenth century, argued, partly on this basis, for a land tax.
↑ Vickrey, William. "The Corporate Income Tax in the U.S. Tax System, 73 TAX NOTES 597, 603 (1996). Quote: "Removing almost all business taxes, including property taxes on improvements, excepting only taxes reflecting the marginal social cost of public services rendered to specific activities, and replacing them with taxes on site values, would substantially improve the economic efficiency of the jurisdiction."
↑ Barker, Charles A., 1955. Henry George. New York: Oxford University Press
↑ Boast, Richard (2008). Buying the land, selling the land: governments and Maori land in the North Island 1865–1921. Wellington N.Z: Victoria University Press, Victoria University of Wellington. ISBN9780864735614.
↑ Daunton, M. J. State and market in Victorian Britain: war, welfare and capitalism. Woodbridge, UK Rochester, NY: Boydell Press, 2008. Quote: "In the election of 1890 he campaigned for radical land reform, arguing for a tax on the 'unearned increment', and advocated the programme of Henry George as a means of 'bursting up the great estates'."
↑ Stevens, Elizabeth Lesly. "A Tax Policy With San Francisco Roots". July 30, 2011 https://www.nytimes.com/2011/07/31/us/31bcstevens.html Quote: "But Mr. Brown was certainly in good company as a Georgist. Devotees over the years have included Leo Tolstoy, Winston Churchill, Sun Yat-Sen, and the inventor of the board game that would become Monopoly."
↑ Murdoch, Walter. Alfred Deakin: a sketch. Melbourne, Vic: Bookman, 1999. 
↑ Bastian, Peter (2009). Andrew Fisher: An Underestimated Man. Sydney, N.S.W: UNSW Press. pp.28–30. ISBN978-1742230047.
↑ [George, Henry, Jr. The Life of Henry George. New York: Doubleday & McClure, 1900.]
↑ Post, Louis Freeland (April 12, 1912). "Sun Yat Sen's Economic Program for China". The Public. 15: 349. Retrieved 8 November 2016. land tax as the only means of supporting the government is an infinitely just, reasonable, and equitably distributed tax, and on it we will found our new system
↑ Howe, Frederic C. The Confessions of a Reformer. Kent, OH: Kent State UP, 1988.
↑ Arcas Cubero, Fernando: El movimiento georgista y los orígenes del Andalucismo: análisis del periódico "El impuesto único" (1911–1923). Málaga: Editorial Confederación Española de Cajas de Ahorros, 1980. ISBN84-500-3784-0
↑ Bryson, Phillip (2011). The economics of Henry George: history's rehabilitation of America's greatest early economist. New York: Palgrave Macmillan. p.145.
↑ Moore, Robert (1974). Pit-men, preachers & politics the effects of Methodism in a Durham mining community. Cambridge: Cambridge University Press. p.61.
↑ Barton, Stephen E. (2016). "Berkeley Mayor J. Stitt Wilson: Christian Socialist, Georgist, Feminist". American Journal of Economics and Sociology. 75 (1): 193–216. doi:10.1111/ajes.12132. ISSN0002-9246.
↑ "Some Suggestions for Reform of Taxation", Proceedings, 14th Annual Convention, League of California Municipalities, Santa Barbara, California, October 25, 1911, pp. 152–71. J. Stitt Wilson, "Report from California", The Single Tax Review, V.17, No.1, January–February 1917, pp. 50–52
↑ Stewart, John, 1931- (2001). Standing for justice: a biography of Andrew MacLaren, MP. London: Shepheard-Walwyn. ISBN0856831948. OCLC49362105.CS1 maint: multiple names: authors list (link)
↑ Jorgensen, Emil Oliver. The next Step toward Real Democracy: One Hundred Reasons Why America Should Abolish, as Speedily as Possible, All Taxation upon the Fruits of Industry, and Raise the Public Revenue by a Single Tax on Land Values Only. Chicago, IL: Chicago Singletax Club, 1920.
↑ Young, Arthur Nichols (1916). Single tax Movement in the United States. S.l: Hardpress Ltd.
↑ Thompson, John (1987). Reformers and war: American progressive publicists and the First World War. Cambridge Cambridgeshire New York: Cambridge University Press.
↑ Powderly, Terence Vincent (1889). Thirty Years of Labor. 1859–1889. Excelsior publishing house. Retrieved 8 December 2014. "It would be far easier to levy a "single tax," basing it upon land values." "It is because […] a single land tax would prove to be the very essence of equity, that l advocate it.
↑ Harrison, F. (May–June 1989). "Aldous Huxley on 'the Land Question'Archived 2014-12-13 at the Wayback Machine ". Land & Liberty. "Huxley redeems himself when he concedes that, if he were to rewrite the book, he would offer a third option, one which he characterised as 'the possibility of sanity.' In a few bold strokes he outlines the elements of this model: 'In this community economics would be decentralist and Henry Georgian, politics Kropotkinesque and co-operative.'"
↑ Kunstler, James Howard (1998). "Chapter 7". Home from Nowhere: Remaking Our Everyday World For the 21st Century. Simon and Schuster. ISBN9780684837376.
↑ Lora, Ronald; Longton, William Henry, eds. (1999). The Conservative Press in Twentieth-century America. Greenwood Publishing, Inc. p. 310. "Thus, the Freeman was to speak for the great tradition of classical liberalism, which [Albert Jay Nock and Francis Nielson] were afraid was being lost, and for the economics of Henry George, which both men shared."
↑ Buckley, William F. Jr. "FIRING LINE: Has New York Let Us Down?"(PDF). PBS, Robert Schalkenbach Foundation. Archived from the original(PDF) on 2015-09-24. Retrieved 6 November 2014. Buckley says, "The location problem is, of course, easily solved by any Georgist, and I am one."
↑ Perry, Jeffrey (2009). Hubert Harrison the voice of Harlem radicalism, 1883–1918. New York: Columbia University Press. ISBN978-0231139113.
↑ Lawson, R (2006). A commonwealth of hope: the New Deal response to crisis. Baltimore: Johns Hopkins University Press. ISBN978-0801884061.
↑ Mowry, George (1958). The era of Theodore Roosevelt and the birth of modern America, 1900–1912. New York: Harper & Row. ISBN978-0061330223. I conceded the voice of ultimate wisdom and saw in Henry George the apostle of a new gospel.
↑ Riis, Jacob A. "The Unemployed: a Problem". (In Peters, John P., Labor and Capital, a chapter on "Socialism and the Single Tax", pp. 425-431. New York, 1902. 12°. Questions of the day, no. 98.)
↑ Burrows, Edwin (1999). Gotham: a history of New York City to 1898. New York: Oxford University Press. p.1183. ISBN978-0195140491.
↑ Schor, Esther (2006). Emma Lazarus. Random House. ISBN9780805242751. Author of "The New Colossus", on the Statue of Liberty, and the poem "Progress and Poverty", named after George's book, of which she said, “The life and thought of no one capable of understanding it can be quite the same after reading it.”
↑ Peseroff, Joyce (March–April 2007). "Emma Lazarus". Tikkun. 22 (2). Retrieved 20 December 2014. Lazarus "supported Henry George's single tax".
↑ Carlson, Allan. The New Agrarian Mind: The Movement Toward Decentralist Thought in Twentieth-Century America Transaction Publishers, 2004 (p. 51).
↑ Silagi, M., & Faulkner, S. (1993). Henry George and Europe: Early Efforts to Organize Germany's Land Reformers Failed, but the Pioneers Won a National Demonstration. The American Journal of Economics and Sociology, 52(1), 119–27. Retrieved from https://www.jstor.org/stable/3487644 Quote: "The meeting was chaired by the materialist philosopher Ludwig Biichner. He was an admirer of Henry George and had been won over to the [land reform] movement by Fliirscheim."
↑ Vallentyne, Peter. Left-libertarianism: A Primer. In Vallentyne, Peter; Steiner, Hillel (2000). "Left-libertarianism and Its Critics: The Contemporary Debate". Houndmills, Basingstoke, Hampshire: Palgrave Publishers Ltd. "Georgist libertarians—such as eponymous George (1879, 1892), Steiner (1977, 1980, 1981, 1992, 1994), and Tideman (1991, 1997, 1998)—hold that agents may appropriate unappropriated natural resources as long as they pay for the competitive value of the rights they claim."
↑ Elazar, Daniel (February 4, 1955). "Earth Is the Lord's". Newspapers.com. The Wisconsin Jewish Chronicle. Retrieved 23 November 2014.
↑ Wilhelm, Donald (September 5, 1942). "Henry Ford Talks About War and Your Future". Liberty Magazine. Retrieved 23 November 2014. Henry Ford says, "[...] every American family can have a piece of land. We ought to tax all idle land the way Henry George said — tax it heavily, so that its owners would have to make it productive"