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The Pamphlet Collection of Sir Robert Stout: Volume 71

Chapter IV. — The Line of Cleavage is between Land Values and Labour Values

Chapter IV.

The Line of Cleavage is between Land Values and Labour Values.

The exemption of improvements from taxation is the dividing line between land monopolists and Single Taxers. The principle upheld by the latter is that no taxation should fall on labour products, but that all should rest upon ground rents. There is nothing else which can be taxed. We must either tax what Nature has presented to us, or else the work which we perform upon these gifts. If, to satisfy our instincts, or to give greater efficiency to our labour, we congregate together, it follows that various spots become more useful than others for certain purposes. If the individuals who occupy these render no equivalent service to the public in return for the permission, they enjoy a privilege. The rest are then prejudiced to a corresponding extent. The only way to cure it is to assess the annual value of every permission to occupy—to take up the whole by taxation, and to use it for the purposes of the community. This is just a longer reading, in different words, of the title page of the pamphlet: "Ground Rent the True Source of Public Revenue: How to Secure it for This Purpose by Means of the Single Tax." Landowners uphold and Single Taxers denounce the system still in vogue of taxing land, and that which we produce from it, as if they were alike in their nature. Just recently many landowners have joined in the general condemnation of the continued taxation of improvements. Now that only large improvements are taxed, they very naturally wish to have them exempted. But the fact remains that, as a class, they have always upheld the system which taxed land and improvements alike, with the very obvious intention of preventing the community from perceiving the essential difference between the natures of the two.

The principle which exempts all labour products will exempt improvements, whether large or small, because they are all the result of labour. It is dangerous to violate a sound principle; it gives the whip-hand to its opponents. It is very short-sighted of those who live by industry to permit the taxation of any of its numerous forms. The list of those who so live is not restricted to "the horny-handed," or to page 6 "wage-earners," or to those who receive "salaries," but it includes all who, by the exercise of any faculty whatever, perform any service which is useful or agreeable to their fellows.

The thing which those who live by industry have most to dread is the continuance of the false impression that labour products are of the same nature, and should therefore be placed in the same taxing category, as land. There is no more land in the world now than at the beginning. All the land transactions that have ever taken place have not added an acre to its area or a pound to its value. It is labour which adds to the world's total of wealth—nay, it is labour which has from the first produced it all.

The fact that Single Taxers hold this distinction between land and improvements as the very basis of their system is the present reason for emphasising their objection to any tax falling upon improvements. It is the more necessary because their opponents frequently confuse the issue, and make appeals to land users based upon an opposite assumption.

One of the latest instances of this occurs in the New Zealand Herald of June 7, 1893. The leading article criticises part of "The Liberal Platform," published in its previous issue—a part in which Single Taxers must feel a kindred interest. One paragraph of the article is devoted to Clause 6 of the platform, which reads in full as follows:—

"6. Land Tax pure and simple, so as to ensure to the State the future unearned increment. No taxation of improvements."

The Heralds paragraph begins with quoting, between inverted commas, the first sentence of the clause. The second sentence, of four words, is omitted. The writer goes on to explain and to condemn, and then says:

"We commend this principle to the calm consideration of all country settles, however small their holdings. Their ownership of the land is to be destroyed; they are merely toCultivate and Improve for 'the State,' as represented by the Liberal Associations of Dunedin and Auckland."

The italics do not appear in the leading article, but the words are here printed in that way to mark the style of criticism employed. Even if the words (omitted in the Heralds quotation of Clause 6), "No taxation of improvements" had not been inserted by its authors, there would have been no excuse for the writer's action. The term "unearned increment" is not an obscure or ambiguous one, and is never understood to include the result of the cultivating and improving done by country settlers. When they "cultivate and improve" the results are usually crops and improvements.

Apart from the four words omitted in quoting Clause 6, the writer can scarcely be unaware that these are results which are quite separate from "unearned increment," and were not intended to be appropriated by "the State," or to be subjected to the smallest modicum of taxation. page 7 But this is the sort of criticism usually meted out to all land taxers, and they have now got used to it. Town settlers are overlooked by the Herald, but they should equally give it their "calm consideration." It would be well for all to view the matter thoroughly and completely when they are about it, and with that intent they should also study the letter signed "Iconoclast," in the issue of the 8th June. He undertakes to "explain and interpret and put into more simple language" the various clauses. Number 6, thus treated, reads, "The confiscation to the State of all private property. Farmers in future to belong to the soil, and pass with it."

The leading article is solemn and monitory, the letter is a light fusillade of banter, but it is difficult to decide which should be taken the more seriously. The former is addressed to "country settlers," the latter is considerately worded "so that they who run may read."

Further comment is needless: "a word to the wise is sufficient."