Doug Mackenzie wrote:
>I do not agree with Georgist arguments for the single
>tax, but the idea that the single tax is unworkable
>because government is necessarily 'too big', is not
>supported by any established facts. Modern governments
>are arguably too large, and could possibly be
>downsized to fit with the single tax, assuming that
>the single tax is itself desirable.
I think it clear that the LVT would not fund all
the government we have today. It is less clear
that this is a disadvantage. If gov't were on a
fixed and more or less knowable revenue stream,
it might be an improvement worth the tax itself.
The rental value of all the land in the US is an
enormous sum of money, even if smaller than the
current spending of local, state, and national
gov't. However, this doesn't mean that any
essential gov't service needs to be cut back. The
road network, for example, can be funded by user
fees, and likely ought to be. the retirement
accounts ought to be true accounts, not spent for
the ordinary expenses of gov't. Disaster relief
can be funded by a surtax on insurance premiums
used to build a national emergency fund. And
while the ordinary expenses of defense should be
funded from ordinary taxes, actual wars (being,
one hopes, extraordinary events) ought to be
funded by extraordinary taxes, such as luxury or
consumption taxes. Would we still have the same
appetite for Iraq if we actually had to pay for
it, rather than pass the cost on to our children
and grandchildren? What if to declare war were
simultaneously, and by the same act, to raise
taxes? Would we be more pacific? Would we not
reserve the use of force for those times when our freedom really is at stake?
Many things cited as a disadvantage of the LVT
strike me as an advantage. Nevertheless, I
believe there are practical problems with the
LVT, the major one being the computation of the
tax. While it may be true that in a pure free
market, it may be easy enough to figure the value
of any given parcel of land, this is not true
when the tax depends on that value. At that
point, the process becomes politicized, and there
are any number of ways of placing as much value
as possible on the improvements and as little on
the land. It seems to me that the LVT can only be
imposed, as a practical matter, in situations
where land is well-divided in ownership. In cases
where it is concentrated, those with the largest
concentrations will have both the incentive and
the means to cheat the system, or work it to
their advantage. Power follows the money, and
where property is concentrated, so too will power
be concentrated. This power will find a way to defeat the system.
This, I believe is the actual history of Georgist
states, which end up with fixed and arbitrary
ratios for dividing value between land and
improvements, Schemes which at best approximate
the land value and at worst completely understate
it. Therefore, I think Georgism itself is
dependent on other reforms which lead to better
divided property. Since such a division is
anathema both to certain abstract formulations of
capitalism and to the capitalism as it actually
exists, we are unlikely to see any Georgist states in the current situation.
John C. M?daille
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