Land value tax

“ Separating the value of land The only objection to the tax on rent or land values that is to be met with in standard politico-economic works is one which concedes its advantages. It is that, because of the difficulty of separating the value of land from the value of improvements, we might, while taxing the rent of land, tax something else. ”

“ The argument for the land-value tax is very apt to assume the form, and, if one may judge from current criticism, is quite generally understood to have the form, that because the value of land increases without effort on the part of the landholder as the community grows, therefore the community has earned such value, and may justly take it for common purposes. ”

“ COMPARISON WITH PRESENT SYSTEM IN RESULTS The community would get no less tax revenue, but presumably more, than it does under the present system. In either case the owner will really pay annually only upon the land value, not upon the growth; the only difference being that under the proposed system he would not be asked to, while under the present system either there will be no growth to tax, or, if there is, he cannot afford to pay and the land will revert. It must be borne in mind that while cut-over land is actually being held under the present system, it has seldom grown anything yet. ”

“ It cannot be too clearly understood that simply to tax land on its selling value is of itself no solution either of the land question or the housing question. If land is priced by its owner at £1,000 per acre and he is holding it to obtain that figure, we should not necessarily bring it into the market by taxing it on its selling value. ”

“ The inevitable tendency of the present system is continuance to pay on the land with speculative value for purposes other than forestry but abandonment of land valuable only for forestry, with destruction of the forest growth in either case, by purpose or negligence, because it means added cost of holding with no possibility of profit. Since the owner cannot be compelled to grow timber to be taxed at his net loss, no timber tax at all will be received by the community and its annual land tax will be confined to land worth holding without timber for purposes other than timber growing. ”

“ And once you have made land quasi-private property, it cannot justly be subjected to any peculiar tax, since colossal as is the rise of land values in growing towns, the value of land is controlled by the same factors of luck and judgment as rule all other property values, and may be depreciated as well as enhanced by the operation of social forces beyond the owner’s control or prevision. ”

“ Notably is this the case with a tax upon "rents" and the "growth and produce of land." It taxes every element of value of the land which the owner can realize from third parties. It must be clear that a tax upon what gives the land value is a tax upon the land itself. In the words of Hamilton, "What in fact is property but a fiction without the beneficial use of it?" In many cases, indeed, the income or annuity is the property itself. As one of the justices said in the Hylton case, "Land, independently of its produce, is of no value." ”

“ This would mean that when the owner of deforested land chiefly valuable to the community for forest production agrees to make it produce, he shall be taxed not on his effort but upon the results of his effort, and then exactly as other producers are taxed upon their results. He may pay tax upon his land, as other land owners do, upon its actual value, but without this value being enhanced for taxation purposes by reason of any crop thereon. ”

“ Each year the land on which it grew has been valued not on the basis of its earning power, but on the basis of what it would bring if sold, timber and all. A tax levied on the income-earning value of the land would be much more equitable. ”

“ 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. It419 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. ”

“ The number of holdings is 115,713, with an improved value of £120,981,599. This is good. It shows an unparalleled proportion of land-holders, but it is not enough, and the ‘Government’ is making strenuous efforts to increase proportionately the population of rural districts, and of ‘land holders,’ if not of land ‘owners.’
“Under an old system, the lands were so recklessly disposed of that even yet fully one-fourth of those ‘occupied’ are ‘owned’ by comparatively few people; but the Government has applied a strong ‘persuader’—graduated land tax—and the great inequality will gradually disappear. ”

“ George to mean—increase in the market value of land for which the proprietor is not responsible. This, I have explained, is already appropriated by the public, because the total annual increase in land values in this country—barring betterments of course—does not exceed the total annual tax levied upon the land. There's always a boom in land values here and there; but hundreds of millions of acres, urban and suburban, have not increased a penny in selling price during the past decade. The owners are reaping no unearned increment, but they are paying taxes regularly into the public till. ”

“ We will therefore arrange a land values tax on a graduated basis, after the plan of the income tax; we will allow one or two thousand dollars' worth of land exempt from all taxation, provided it is used by the owner; and we will put a graduated tax on all individuals and corporations owning a greater quantity of land, so that in the case of individuals and corporations owning more than ten thousand dollars' worth of land, we will take the full rental value, and thus force all idle land into the market. ”

“ Does any one have the right to ruin the land?
Co-operative soil surveys were carried on during the year in the various States with complete success. Every State now sees the need of reliable study and mapping of its soils, to serve as a basis for farm management, taxation, and real estate. At a recent meeting of the National Tax Association, held in Des Moines, Iowa, the relation of land surveys and taxation was discussed with considerable detail. It was the conclusion that land value maps should be prepared by soil surveys to serve as a physical basis of taxation. ”

“ If a tract of land be assessed at $100 an acre at its full value, January 1, 1908, and by reason of any change in conditions, the value has diminished before the arrival of the tax-paying season, say December 31, 1908, to $50 an acre, and, if it be assumed that it would be an injustice under those circumstances to require the owner to pay a tax in December which is based upon such a valuation, still the slightest reflection will convince you that this injustice has not been obviated by assessing the land at $25 an acre and, at the same time, multiplying the tax rate by four. ”

“ How many farmers are likely to wish to sell their farms and invest the proceeds otherwise than in land? Are there more than one in a thousand? As to the burden upon the farmers of the tax on normal land values (i.e., the value due solely to differences in fertility, situation, and generally in desirableness) it should be remembered that by reason of cheap transportation, distance from market, so far at least as the great farming staples are concerned, is now in this country a very small factor in the value of land. ”

“ The burden of a new land tax would therefore fall on those who paid it in the first instance, after which it would remain an excisum or 'part cut out' of the land—the property of the State, laid aside for public uses. ”

“ The fact that where one delivers or agrees to give or transfer land, with all the fruits and revenues, it will be presumed to be a conveyance of the land, in no way supports the proposition that an indirect tax on the rental of land is a direct burden on the land itself. ”

“ Formerly the first attempt to reclaim a piece of uncultivated land brought down the taxgatherer, who at once subjected it to the full burden of the land tax. Now it remains untaxed until it yields the first remunerative crop, and then for two years it pays only half the normal rate. In the same broad spirit, facilities have been granted to people who are found without proper title in possession of land belonging to the Government, but on which they have spent labor and money in developing. ”

“ No tax can be laid on land which will not affect the proprietor of millions of acres as well as the proprietor of a single acre. Every landholder will therefore have a common interest to keep the taxes on land as low as possible ”

“ Probably the easiest and simplest way to abolish land and franchise monopolies, and thus to get rid of the privileges pertaining to land, is through government ownership of all franchise or public service corporations or monopolies, and by taking, for public purposes, the full economic rent of land. This can best be done by what we in this country call the Single Tax. The Single Tax simply takes for the public what the public produces—the so-called unearned increment of land—and, by taxing nothing else but land values, leaves to individual producers all that they produce. ”

“ England would such a policy throw open to cultivation many hundreds of thousands of acres now held as private parks, deer preserves, and shooting grounds. For this simple device of placing all taxes on the value of land would be in effect putting up the land at auction to whoever would pay the highest rent to the State. The demand for land fixes its value, and hence if taxes were placed so as to very nearly consume that value, the man who wished to hold land without using it would have to pay very nearly what it would be worth to any one who wanted to use it. ”

“ All improvements are excluded from the assessment of the taxable amount: they are defined to include "houses and buildings, fencing, planting, draining of land, clearing from timber, scrub or fern, laying down in grass or {90} pasture, and any other improvement whatsoever, the benefit of which is unexhausted at the time of valuation." Under this provision rural owners have every encouragement to improve their properties, as the more they do so, the smaller becomes the proportion of the total value of their estates on which they are liable for taxation. ”

“ It has certainly checked the tendency to speculate in lands with a view to a rise in price, which threatened to become a great, as it certainly was a growing, evil. It has been found that it will not pay to do this in the face of taxation, and particularly of the graduated88 tax; and owners of large areas of land have developed a strong inclination to subdivide and sell lands which they formerly were disposed to hoard and increase. ”

“ Such a contract is a limitation upon the taxing power of the legislature making it, and upon succeeding legislatures, to impose any further tax upon the franchise. But why, when bought, as it becomes property, may it not be taxed, as land is taxed which has been bought from the state, was repeatedly asked in the course of the argument? The reason is, that every one buys land, subject in his own apprehension to the great law of necessity, that we must contribute from it and all of our property something to maintain the state. ”

“ In most countries of Europe, the right to take by taxation, as exigency might require, an indefinite portion of the rent of land, has never been allowed to slumber. In several parts of the Continent, the land-tax forms a large proportion of the public revenues, and has always been confessedly liable to be raised or lowered without reference to other taxes. In these countries no one can pretend to have become the owner of land on the faith of never being called upon to pay an increased land-tax. In England the land-tax has not varied since the early part of the last century. ”

“ Land companies in the Transvaal alone possess some 12 million acres, the bulk of which has been bought for supposed mineral values. Not 10 per cent of the land is occupied, and nearly 50 per cent is capable of occupation of some kind. Quite apart from revenue considerations, a tax which would compel settlement, or, failing that, would drive some of the more obstinate companies to put good land in the market, would be sound policy. ”

“ It is far better that forest land should pay a moderate tax permanently than that it should pay an excessive revenue temporarily and then cease to pay at all.
We tax our forests under the general property tax, a method of taxation abandoned long ago by every other great nation. In some regions of great importance for timber supply, and in individual cases in all regions, the taxation of forest lands has been excessive and has led to waste by forcing the destructive logging of mature forests, as well as through the abandonment of cut-over lands for taxes. ”

“ It has been suggested that it would be better that the states should rent out the land at four per cent of the sale price. This would leave more money in the hands of settlers and enable many to get farms who cannot pay the price and have enough left to raise a crop. In reality it would be better for the state to help farmers get a start rather than to tax them one dollar per acre to begin with. However, under our system of government, we permit only those who have money to have land. ”