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The Pamphlet Collection of Sir Robert Stout: Volume 71

Chapter IX. — A New Principle is Embodied in the Proposal

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Chapter IX.

A New Principle is Embodied in the Proposal.

It having been asserted that the word tax is not strictly applicable to the plan of deriving public revenue from ground rent, it will be necessary to explain more fully the principle which underlies it. It has been shown that the payment of ground rent by a man does not involve any deduction from the proceeds of his industry, while the payment of taxation does do so. Such a deduction amounts to a sacrifice on his part, and, indeed, the idea of sacrifice is inseparable from our present systems of taxation. Hence we talk of "equality of sacrifice," and in this Colony we have been diligently taught for some years that the taxation should be "put upon those who are best able to bear it." By all means, if a sacrifice is to be asked from the people, let each one bear it according to his ability. There is an evident sound of fairness about such a doctrine. But even a good watchword will not suffice to neutralise the radical defect of our present system. It is evident that a sacrifice of part of everyone's earnings is now demanded, and this constitutes a tux on industry and a discouragement to thrift.

But it is time that we outgrew such crude methods, and Single Taxers say that we can do so, and they emphatically state that no sacrifice, need for the future be asked of any citizen in order to carry on public services. They say that no deduction need be made from either the current industry or the savings of any citizen; they contend that the poorer people of a country are more interested, if possible, than the well-to-do in hastening the only reform which can produce such a change; that they are more interested than any others, if they could but see it, in ensuring the universal adoption of this principle, and in seeing that it is carried out in its purest form, i.e., free from all such pauperising and vote-catching devices as exemptions and deductions. These latter would then become the traditions of a reign of injustice; of an era in which mercy and philanthropy, falsely so called, were grudgingly substituted for that justice which would have kept all things right.

What, then, is the opposite principle which has been hinted at? A fitting phrase to describe it needs coining, but it may be briefly described as "payment in proportion to opportunity enjoyed."

Take an illustration to explain the meaning of this. If a man is allowed by the community to occupy a corner site in a leading thoroughfare for his business—a fertile holding near a railway station or on the banks of a navigable water for his farm—or a salubrious plot commanding a fine view for his residence—the "opportunity enjoyed" by him of producing wealth or enjoying comfort is a superior one. Should he not make to the community which allows it a "payment in proportion" to the "opportunity" enjoyed? And would this be asking him to make a sacrifice? Certainly not!

And if, as time wore on, the leading thoroughfare became more busy—if some part of the fertile holding became desirable for building page 15 purposes, and, as a consequence, other parts became available for more profitable cultivation in the form of vegetables, fruits, and flowers—or if there were many persons willing to give a higher annual payment for the residential site—should the owner not be called upon for a "payment in proportion" to the improved"opportunity enjoyed" by him, provided that he wishes to continue to enjoy it? And would this be asking him to make a sacrifice? Most emphatically not!

Or would either of these demands be equivalent to what we now call taxing him? Would it take any part of his earnings or savings? Certainly not! His income would be enhanced before a greater demand would be made. His payment would be analogous to the buying of stamps for postage, or of tickets for a railway journey. They are one and all payments for services rendered to, or for opportunities enjoyed by, him. The change which has come about is the arrival of a larger community to purchase his wares—to make it possible for him to find a market for things which are more profitable to cultivate than his former crops—to bring greater conveniences in the shape of transit facilities, refinement, and recreation, within easy reach of his dwelling. The members of the community have, in effect, come to his gate to receive his produce, and thus to save him the time formerly occupied in carrying it to them. They have offered to buy a more valuable class of produce if he would turn his energies in that direction. "The ball is at his foot" by reason of the community having brought it there.

These would all be free gifts to him if he did not pay an equivalent price for them to the community. Such benefits have not come to him spontaneously, but are the products of busy hands and brains. If he gets the advantages for nothing, it must follow that others will fall correspondingly short of receiving the full reward of their industry; they would thus be making a sacrifice for his advantage. His annual payment for these benefits, therefore, cannot be described as a sacrifice; he prefers remaining to enjoy them, and, as a consequence, pays the equivalent of their value. He would pay the sum quite readily if it represented the hire of a labour-saving machine or of an improved means of public transit. Obviously, then, it is an equitable principle, alike to the land user and to the community as a whole, that the occupation of this particular land should only be permitted in exchange for an equivalent annual payment. There is mutuality in it, and any other conditions on either side would be unfair. As long as every other user makes a return to the community equivalent to the value of the land which he occupies, the first man has no ground of complaint against anyone.

But if there is still a doubt lingering in any mind, then look at it from another point of view by means of an analogy. Suppose that in setting up housekeeping a man buys furniture for three rooms—he does not complain that he has sacrificed his money. If he subsequently adds a room to the house, and furnishes it, he does not say that he has page 16 made a further sacrifice. Of course, he does not. These transactions are fair exchanges and the "payment in proportion to opportunity enjoyed" by each occupier of land is on the same footing. They all give equal satisfaction to both parties to the respective bargains, and they cause no sacrifice to either; each party is ready to repeat the same again, upon occasion. They all enjoy, and pay an equivalent for, some of the superior advantages which can be obtained by the members of a community, and which can never be realised by isolated families.

It is probable that everyone would agree to this proposition regarding rent as long as it was understood to apply only to a tenant. They would say that if he used any land it would be right in the first place that he should pay rent for it, and that if it was public land it would be right in the second place that he should pay it to the community. But the general contention would be that if he rented the land from an individual the latter should be entitled to keep the rent for his private use. Similarly, that where an owner used his own land he should not be called upon to pay rent to the community. People generally would say that ownership entitled the owner not only to the free use of his land, but to the ground rent which he could derive from it if he chose to let it.

This is where Single Taxers diverge from the ordinary belief. They say that every user of land, without exception, whether tenant or owner, should pay the full ground rent annually to the community. They cannot acknowledge the equity of exempting the owner from this obligation to make an annual payment. This must be read in conjunction with the previous statement that Single Taxers support freehold tenure, but the argument for its justice will not be dwelt upon here, but will be taken up later on. The only contention here made is that "payment in proportion to opportunity enjoyed" is the correct principle to guide the raising of public revenue; that a man should not be taxed upon his income or his savings, but upon the opportunity which is allowed to him.

The complaint is frequently made against the Single Tax scheme that it would put all the burden of taxation upon one class of the community—viz., the landowners—and that the rest would pay nothing. Enough has probably been written to show that this is an unfounded statement, but it may be well to point out its origin. It has, no doubt, arisen from looking no deeper than the surface. There is a half truth in the statement which appears to give sanction to it. It is quite true that only the landowners would walk into the post-office and lay down the cash. The fallacy lies in the assumption that what they would part with is a portion of the proceeds of their own labour and skill. That which they would lay down is a payment for the use of a piece of ground to which the presence of the community had attached a special value. They would get an equivalent for the payment just as surely as the purchaser of a railway ticket does when he takes the journey, whether it be long or short, for which he has paid the fare.

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The whole arrangement, under the proposed system, works out to the reasonable satisfaction of everyone without demanding any sacrifice of earnings. It is very difficult at first to believe that such a reform is possible. We all feel that something is not right now, but a vague sense of hopelessness has almost benumbed us into despair of ever finding a solution to our troubles. Clear-headed men, however, having boundless faith in the efficacy of right principles, have thought out the matter for us. Henry George, without question, stands forth as the leading expounder of this most complete scheme of economic reconstruction. It is one that is worthy of the respectful consideration of every statesman, every politician, and every elector.