48
THE ABCOF TAXATION
value of the land by the amount of the capitalised value of the
tax. The future owner will, therefore, be able to buy it so much
cheaper that he will realise as large a percentage on his investment
as though the tax had never been levied.”—Thomas N.
Carver, Tale Review, Nov. l8g6.
A recent College and University text book* makes
reference to the argument of this illustration, as restated
in Chapter XII., in the following comment;
Many present-day followers of Henry George find in this
principle of amortisation at once a justification and a method of
securing for society all economic rent. Under present conditions,
they say, a man who buys land wholly escapes taxation
upon it. Consequently, in order to make landowners pay as
much as other people we should have to increase the tax upon
land by a rate equal to that paid by the average tax payer as
often— say every thirty years— as the land of the community
changes holders. In this way the State could gradually and with
justice absorb all economic rent.
But this whole chain of reasoning is fallacious for three
reasons:
(a) This capitalisation takes place only to the extent
that the tax on land is exclusive and unequal, and modern
taxes upon land are not of this nature.
(h) In so far as this programme of the single taxers were
anticipated and understood, it would visit the whole burden
of the “reform” upon present owners, instead of being distributed
over several generations. Subsequent purchasers
would discount these periodic increases of the tax and pay to
owners for their land only the present value of the rapidly
vanishing income from land. Land would be valued simply as
a terminable annuity.
♦ “Outlines of Economics,” Revised Edition, by Richard T. Ely. The
Macmillan Company, 1908, pp. 621, 621.
