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government are available, and does not already own land there, he will be compelled to rent or buy at a valuation which, other things being equal, will depend upon the value of the government service that the site he selects enables him to enjoy. Thus does he pay for the service of government in proportion to its value to him. But he does not pay the public, which provides the service; he is required to pay landowners.

The economic principle pursuant to which landowners are thus able to charge their fellow citizens for the common benefits of their common government points to the true method of taxation. With the exception of such other monopoly property as is analogous to land titles, and which in the purview of the single tax is included with land for purposes of taxation, land is the only kind of property that is increased in value by government; and the increase tends to be in proportion to the public service which its possession. secures to the occupant.

Therefore, by taxing land in proportion to its value, and exempting all other property, kindred monopolies excepted that is to say, by adopting exclusive land value taxation-we should be levying taxes according to benefits.

Nor would this be in any sense class taxation. Indeed, the cry of class taxation is rather impudent for owners of valuable land to raise against land value taxes, when it is considered that under existing systems of taxation such landowners are exempt.

Even the poorest and most degraded classes in the community, besides paying landowners for such public benefits as come their way, are compelled by indirect taxation to contribute to the support of government.

But landowners as a class go free. They enjoy the protection of the Courts and of the police and fire departments, and they have the use of schools and the benefit of highways and other public improvements, all in common with the most favoured, and upon the same specific terms; yet, though they go through the form of paying taxes, and if their holdings are of considerable value pose as the taxpayers" on all important occasions, they, in effect, and considered as a class, pay no taxes. To tax them alone, therefore, is not to discriminate against them; it is to charge them for what they get from the public.

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Land value taxation conforms most closely to the essential principles of Adam Smith's four classical maxims, which are stated by Henry George as follows:

"The best tax by which public revenues can be raised is evidently that which will closest conform to the following conditions: (1) That it bear as lightly as possible upon production so as least to check the increase of the general fund from which taxes must be paid and the community maintained. (2) That it be easily and cheaply collected, and fall as directly as may be upon the ultimate payersso as to take from the people as little as possible in addition to what it yields to the Government. (3) That it be certain— so as to give the least opportunity for tyranny or corruption on the part of officials, and the least temptation to lawbreaking and evasion on the part of the taxpayers. (4) That it bear equally-so as to give no citizen an advantage or put any at a disadvantage as compared with others."

Indirect taxes tend to check production and to cause. scarcity by obstructing the processes of production. They fall upon men as they work, as they do business, as they invest capital productively. But land value taxes which must be paid and be the same in amount regardless of whether the taxpayer works or plays, or whether he invests his capital productively or wastes it, or whether he uses his land for the most productive purposes or in lesser degree or not at all, lay no penalties upon industry and thrift. Therefore they conform to the first maxim quoted above.

Indirect taxes are passed along from first payers to final consumers through many exchanges, accumulating compound profits as they go, until they take enormous sums from the people in addition to what the Government receives. But land value taxes take nothing from the people in excess of the tax. Therefore they conform to the second maxim quoted above.

No other tax, direct or indirect, conforms so closely to the third maxim, "Land lies out of doors." It cannot be hidden; it cannot be "accidentally" overlooked. Nor can its value be greatly misapprehended or misstated. Neither under-appraisement nor over-appraisement is possible to any important extent without the connivance of the whole community. The land values of a neighbourhood are matters of common knowledge. Any intelligent resident can justly appraise them, and every other intelligent

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resident can fairly test the appraisement. Therefore the tyranny, corruption, fraud, favouritism, and evasions which are so common in connection with the taxation of imports, manufactures, incomes, personal property, and buildingsthe values of which, even when the object itself cannot be hidden, are so distinctly matters of minute special knowledge that only experts can fairly appraise them--would be out of the question if land value taxation were substituted for existing fiscal methods.

In conforming to the fourth maxim, the land value tax bears more equally-that is to say, more justly-than any other tax. It is the only tax that falls upon the taxpayer in proportion to the pecuniary benefits he receives from the public, and its tendency, accelerating with increase of the tax, is to leave to everyone the full fruit of his own productive enterprise and effort.

TAXES AND PROSPERITY.

BY ALMOND G. SHEPARD.

The use of the words "taxes" and "prosperity” in conjunction suggests some obvious distinctions between them-taxes we have always with us; the tax collector is a constant visitor, always and generally at the most inopportune times, intruding upon us; prosperity, on the other hand, to the majority is either a total stranger or at the best a most infrequent visitor. To the tax collector the latch string is never out, while we meet prosperity with open arms if it comes our way.

While there are these and perhaps many other obvious distinctions between taxes and prosperity, nevertheless the one has a direct effect upon the other. The purpose of this article is briefly to comment upon the effect of taxes upon prosperity, and prosperity not only to the individual. but to municipal corporations.

DEFECTS IN PRESENT METHODS.

To summarize, it is attempted to shew:

1. That the present system of taxation favours the large cities, and discriminates against the smaller municipalities and rural districts.

2. Hence it is repressive of industrial growth in the small cities and villages, and is one of the principal causes for the constant flow of population to the large cities.

3. The present system of taxation discriminates against the poor and in favour of the rich.

4. It discriminates against the thrifty who acquire taxable property, in favour of people of larger incomes who pay no direct taxes.

The remedy may also be briefly summarized that the present system of taxation as it generally obtains is repression of prosperity for the following reasons:

a. A highly progressive inheritance tax.

b. A more equable plan for assessing real and personal property.

c. An income tax.

d. A fixed maximum rate.

e. Concerted action by all the states for the purpose of uniformity in the rate of taxation and the means of raising

same.

There is and always have been many variant opinions and theories as to the best manner of raising taxes, although all persons who have considered the subject are agreed that taxes should only be raised for strictly public purposes, and then in a manner requiring the least personal sacrifice, and in such a way as to be least suppressive of industrial and business progress and success. The present method of raising the bulk of taxes for local governmental purposes, by assessing real estate and different forms of personal property, including money, is subject to much criticism; while, on the other hand, it has the virtue of being one of the surest as well as one of the easiest ways of enforcing payment. This is especially true as to the taxation. of real estate. This latter fact has caused this means of raising taxes to be very generally resorted to without reference to the injury thereby resulting to the industrial and social life of the people.

INEQUALITIES IN ASSESSING CITY VS. COUNTRY.

Some of the defects in this system of raising the taxes are the inequalities in assessing and valuing real property, and even greater inequalities in the assessment of personal property, in that in many localities, especially the large

cities, as a rule no decided effort is made to assess personal property. Indeed the policy is the reverse-to permit personal property to go unassessed and hence untaxed. Then again in most localities, public service corporations, like common carriers and telegraph and telephone lines, are assessed on a different basis than other real and personal property, and are not assessed at all by local municipalities in which they may own property and have franchise rights, and from which they receive the same protection accorded property assessed for local purposes. Another defect in the present system of taxation is that while, as already stated. in the cities at least, personal property is not generally assessed, in the country districts and the smaller municipalities the reverse is true and here it is the exception rather than the rule for personal property to escape taxation.

And it is also true that in the country districts as a rule, especially in the villages and small cities, real estate is assessed for its full value and oftentimes more than its selling value, while in the city, owing in part to the policy of the assessing officers, and in part to the rapid increase in the value of real estate, it is very apt to be much under assessed.

Another defect in the present system of taxing property which has a bad effect upon the prosperity of the farming community is that it results in requiring the farmer to pay double taxes to a great extent. He is required to pay taxes upon the assessed value of his farm and personalty without any deduction for his indebtedness. His farm is assessed substantially its full value although he may be indebted on it for from one-half to two-thirds its assessed value; his personalty is likewise assessed although he may owe on it substantially the whole purchase price.

BANEFUL EFFECT OF INEQUALITIES.

The result of these defects in the present system of assessing property is that the farmer and the resident of the villages and small cities are generally assessed for substantially all their personal property at about its real cash value, and their real estate is also assessed at nearer the cash value than in the larger cities. As to real estate assessments, however, it may be said that as a rule they average higher in the villages and small cities than do the assessments of farm real estate. The reason for this may generally be traced

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