The single tax: activities

Activities

1. Henry George on the Single Tax

Here is an excerpt from a speech by Henry George, entitled "The Single Tax: What It Is and Why We Urge It."

If we tax houses, there will be fewer and poorer houses; if we tax machinery, there will be less machinery; if we tax trade, there will be less trade; if we tax capital, there will be less capital; if we tax savings, there will be less savings. All the taxes therefore that we should abolish are those that repress industry and lessen wealth. But if we tax land values, there will be no less land.
On the contrary, the taxation of land values has the effect of making land more easily available by industry, since it makes it more difficult for owners of valuable land which they themselves do not care to use to hold it idle for a large future price. While the abolition of taxes on labor and the products of labor would free the active element of production, the taking of land values by taxation would free the passive element by destroying speculative land values and preventing the holding out of use of land needed for use. If anyone will but look around the world today and see the unused or but half used land, the idle labor, the unemployed or poorly employed capital, he would get some idea how enormous would be the production of wealth were all the forces of production free to engage.

Please answer the following questions.

According to George, what is the effect of taxing labor and production? Do you agree?
What is the effect of taxing land values?
If land values were collected in taxation, what practice would be discouraged? How would this affect the production of wealth?
Do you think the Single Tax would help or hurt the farmer? Explain your answer.

2. Grading Taxes

In the reading for this lesson, we learned that the Classical Economists rated the suitability of a tax policy on four criteria. In the table below, rate each form of taxation with a letter grade, A through F. Then assign an overall grade to each.

	Light on production	Easy to collect	Equitable	Predictable	Overall Grade
Social Security Tax	.	.	.	.	.
Gasoline Tax	.	.	.	.	.
Sales Tax	.	.	.	.	.
Land Value Tax	.	.	.	.	.
Import Tariff	.	.	.	.	.

3. Charting Building Construction

For most of the 20th century, the city of Pittsburgh had a higher property tax rate on land than on buildings. In December, 1978, the land tax rate was increased from 1.44% to 2.44%. In December of 1979, the land tax rate was increased to 3.14%. Each time, tax rates on buildings were decreased.

Please answer the following questions.

What happened to construction in 1978? In 1979? In 1980??
What other factors might have influenced building construction in Pittsburgh?
When new buildings go up, what do you suppose is happening to land values?
Suppose a piece of vacant land had a property tax bill of $1,240 in 1978. If land values did not go up at all, what would its tax bill be in 1981?
How would rising land values in 1981 affect land-use decisions?