How Much Revenue Would a Full Land Value Tax Yield?In the United States in 1981, Census and Federal Reserve Data Indicate It Would Nearly Equal All Taxes

Abstract . Most urban economists and particularly specialists in urban public finance consider the land value tax, because of its economic effects and its influence toward rational development, the tax of choice. But could it replace, in whole or in large part, taxes which now burden labor and capital and distort efficient allocation of resources? How important would a full land rent tax's yield be? The U.S. Bureau of the Census provides data which, adjusted for errors and omissions, indicates that the annual land rent for 1981 was $721 billion. Federal Reserve Board data, similarly adjusted, indicates annual land rent for that year was $590.38 billion Hence we may say that a full land rent tax would yield something around $658 billion in 1981, or 28 percent of the 1981 national income. This is nearly two thirds of all taxes levied by all levels of government in 1981, and, with user charges and similar fees continued, it is probably equal or nearly equal to burdensome taxes.     

The Vermont Land Gains Tax Experience With It Provides a Useful Lesson in the Design of Modern Land Policy

Abstract . Vermont is currently the only state which employs a special capital gains tax on certain land sales. A comparison between the Vermont land gains tax and Henry George's Single Tax provides a useful lesson in the design of modern land policy. The Vermont tax is aimed at discouraging short run land speculation, while the Single Tax seeks to discourage the long term quasimonopoly of land ownership. The Single Tax would capture unearned increments to land value while the Vermont tax applies only to realized capital gains and tends to reward long term speculators. An empirical analysis of the Vermont tax reveals that tax revenues have been small, and that the tax has not prevented a rise in land values. In fact, the Vermont tax may have increased land prices by restricting available land supply. Although the Vermont tax intended to curb speculation and reduce land subdivision activity, it is not a substitute for land use planning and carefully designed growth control ordinances and regulations.     

Index of authors

In most developing countries (particularly in the Pacific) land ownership is dominated by traditional ‘landowners’ who often represent selected families in the community. It is frequently argued by commentators, that such a traditional approach to land ownership hinders economic and social development of communities and nations. As one observer expressed the problem, it is desirable for traditional landowners to change from being rentiers to that of producers. ^{* 1}Rodney V. Cole. ‘Creating a Climate for Investment in Fiji’, A Paper presented at the 6th Fiji Employer's Consultative Association Annual Conference, November 1988.

Against this background of traditional land ownership including the concept of monopoly ownership of land, this paper has as its objective, to demonstrate that this apparent constraint on the use ofland can be used in a positive way as a catalyst, to develop small enterprises in a national sense and using Fiji as a case study demonstrates how landowner cpmpan:ies are currently acting as a learning medium for, and a catalyst in small enterprise development.

In specific terms, the objectives of the paper are:

(a) to demonstrate how an apparent barrier to small enterprise dc:velopment (monopoly land ownership) can be converted to a program of small enterprise expansion;

(b) to identify key factors in the process of utilizing landowner companies to act as a catalyst for non-agricultural small enterprise development;

(c) to use Fiji as a case study to identify initial problems assoc:iated with landowner companies and strategies applied to overcome such problems;

(d) to describe the link between successful landowner companies and their development and new small enterprises in retail, service and processing sectors.     

The Time Horizon of Planned Social Change: I. Why Utopian Movements Always Promise Amelioration in the Future

Abstract . Why have worthy social reforms in general, and Henry George's 100-year-old proposal to end land speculation and land monopoly, in particular, taken so long to win acceptance? The sociology of knowledge, framed by Mannheim and others, offers fresh insight into the question. The newer concepts of time horizon and its variants-time frame and temporal calibration-examined by Edward Banfield, Paul Fraisse and others, take it further. Seen and discussed by Locke, Hobbes and Hume without being given names, the new concepts have only recently been singled out for closer study. Time horizon, as a human variable, clarifies why Utopian ideas are originally acceptable to few, and isolates factors that determine the rate at which those ideas become realistic. Thus it helps establish how best to speed that transition.     

An Incomes Policy for the Professions: the Dutch Experience

Abstract . In 1951 the United States began moving toward an incomes policy, an attempt to end postwar wage and price inflation by linking changes in these prices to gains in productivity. Other countries later followed suit; some countries had already adopted wage and price control policies. The Netherlands moved toward an incomes policy immediately after World War II. Initially, the Dutch program involved wages only, but in the 1970s it became an accepted principle that private professional income should be comparable with the salaries of government officials and civil servants with comparable training and responsibilities. In the Netherlands (as in the United States and, before medicine was socialized, the United Kingdom) health professionals operate on a fee-for service basis and their incomes escalated as a result of both inflation and monopoly power. So they were subjected to the incomes policy. The policy's effectiveness in curbing income escalation cannot be determined with certainty—reliable data are lacking. However, the evidence indicates that the policy failed to achieve its original purpose.     

Henry George and the Classical Scientific Research Program: The Economics of Republican Millennialism

Abstract . Henry George's classicism was evident in his acceptance of “hard core” assumptions inherent in classical economic analysis, notably that rational self-interested behavior exercise in competitive markets maximized economic welfare. However, George's “stage theory,” the “Law of Human Progress,” led him to reject the classical nexus between social and economic welfare. The emergence of an exchange economy improved efficiency and economic welfare, but institutional changes lagged behind, particularly the redefinition of property rights. Consequently, economic growth based on land as a private rather than public good widened the gap between economic efficiency and social welfare. Hence George's paradox of poverty amidst progress. George resolved the equity efficiency conflict by treating land as a public good. Then, the sale of monopoly rights to land through the “single tax” on land rents captured the difference between the private and social costs of land use.     

The Effect of Monopoly Power on National Income, Wage Income and Interest Rates

Abstract . That part of business profits due to monopoly power or other forms of imperfect competition is capitalized into stock prices.Common stock is part of gross wealth, and as such provides a store of value for consumers against emergencies. A very simple graphical model is developed to show how interest rates, gross wealth holdings, and holdings of physical capital are jointly determined. In turn the levels of national income, property income, and wage income are determined once the stock of physical capital and the interest rate are known. In essence, capitalized monopoly profits substitute for physical capital, reducing the economy's stock of capital goods. Similar effects are produced by government debt.     

Henry George and Europe: Ireland, the First Target of His Efforts to Spread His Doctrines Internationally, Disappointed Him

Abstract . Henry George made several crusading forays into the British Empire at the time of its zenith. But the first, to Ireland, proved a disappointment. George saw Ireland as an object lesson in the land question and at first It was uppermost in the minds of the 600,000 tenant farmers. But the 20,000 landlords agreed to an amelioration, and for decades, republicanism replaced land reform in Irish social history. George misread the temper of the times; he saw Ireland's political future better served by becoming a self-governing unit of a league of British nations. “Integration” was the trend of the times, the American social philosopher insisted. Ireland (with the exception of Ulster) became a dominion in 1921 but it withdrew from the British Commonwealth in 1949 to become a sovereign republic. George was not wholly wrong in emphasizing economics over politics. In 1955 Ireland, now Eire, entered the United Nations where it wielded influence all out of proportion to its resources and economic development became its over-riding issue.     

Henry George and Europe

Abstract . Henry George's land reform ideas became known in Germany not through his writing or speaking but through the efforts of Michael Flürscheim, an industrialist and pioneer social reformer, who first presented those ideas to the public. The American's idea that the land value tax was the only legitimate source of government revenue as the only economic surplus had found no acceptance among German socialist leaders. It was a capitalist, Flürscheim, who was inspired by George's theories and wrote and spoke about them. Flürscheim brought about the foundation of the first German land reform organization. Though it failed, a successor became the largest such association in the world.     

Land and Labor Patterns in Brazil During the 1960s

Abstract . Most of the agricultural sector in Brazil during the 1960s bore the autocratic imprint of latifundismo, which determined interpersonal relationships and those between man and land. Latifundios and agriculture in general were not labor-absorptive, and farm size tended to vary inversely with the amount of intensively tilled land. Polyvalency of employment acted in concert with farm management practices to strengthen latifundismo and to impede realization of socio-economic potentials for most rural inhabitants. Probable high frequency of multiple farm ownership by the landed élite verified that the areal extension of latifundismo had encountered no effective resistance. Elements of modernization on large estates seemed to betoken changes in technology and financing rather than alteration of traditional contexts. As an instrument for agrarian reform, the Estatuto da Terra (1964) was impotent, and beneficiaries of land were all but non-existent under the military regime.     

Rent Seeking in the Cameroon Economy: Krueger's Analytic Technique Helps to Account for Development Lag in Colonial States

Abstract . Traditional economic theory regards the social costs of monopoly as the reduction in both consumer and producer surplus as a result of monopolization of certain sectors of the economy. Recent research has shown that a proper accounting of the social costs of monopoly must include the costs of obtaining and maintaining monopoly positions. Anne O. Krueger used the term “rent seeking” to refer to the expending of scarce resources by entrepreneurs to fight for rents created through government activity in the economy. Excessive interference in the economy by government can result in an increase in the social costs of monopoly. In a developing country such as Cameroon, where government activity in the economy has been quite pervasive since the latter part of the 1800s, opportunities have been created for rent seeking. This type of activity has helped to impede the economic growth of the country.     

Risk,rent seeking and the social cost of monopoly power

Some recent empirical studies that have estimated the social cost of monopoly power have included in these estimates observed monopoly rents as a proxy for the unobserved value of the resources expended by rent seekers. This has involved adding these estimates of resources wasted by rent seekers to estimates of deadweight welfare loss triangles so as to produce an overall estimate of the social cost of monopoly. The present paper points out that each firm seeking a monopoly rent flow not only may be uncertain about obtaining the flow but also about retaining it in future periods. It is shown that this is likely to cause the proportion of the rent flow converted into social cost to be well below 100% regardless of whether the rent sought is small relative to initial wealth and regardless of whether rent seekers are risk-neutral or risk-averse. These findings demonstrate that large errors are likely to be made in monopoly welfare loss studies if observed monopoly rents continue to be employed as a measure of the value of resources used in rent-seeking activities.     

The Nature of the Agrarian Land Question in the Republic of South Africa

Abstract . Most of the land in South Africa is dommnated by 4.5 million Whites. A tiny fraction of this key resource is designated for Black occupation in Black townships in White South Africa and for Black ownership in the ten “homelands.” Several interrelated factors account for the lop sided land distribution that exists in South Africa. The two most important factors are the removal of native occupants from the majority of the land, accomplished by early Dutch settlers, and legislative measures that were designed to guarantee a White controlled economy and foster economic development by assuring an abundant supply of disenfranchised and cheap black labor The extent of the inequality in the land distribution suggests that, from the viewpoint of ownership and control, Blacks were better off prior to 1652 when the first Dutch settlers arrived at the Cape.     

Development Rights and the Differential Assessment of Agricultural Land: Fractional Valuation of Farmland is Ineffective for Preserving Open Space and Subsidizes Speculation

Abstract . The relative fiscal efficacy of using differential assessment as a means of preserving agricultural land is examined. A simple model of land use and land rent determination is developed and tested. An implication is that differential assessment merely delays or retards, but does not prevent, the conversion of land to developed uses. Differential assessment is viewed as a tax expenditure, or special tax reduction, that in essence leases development rights, Landowners are also shown to be overcompensated for the development rights implicitly acquired by the public sector. The fee simple purchase of development rights or regulatory control over the use of development rights can be employed to preserve farm land at a lower fiscal cost.     

Export Agriculture and the Expansion of Urban Slum Areas

Abstract . Many of the richest people have all or a large part of their accumulated wealth in land, yet the men and women who work the land are usually their country's most poverty-stricken. The landowning elite is very powerful because land has been concentrated in few hands. In the Third World' of less developed countries (LDCs) and in the United States this situation in the last four decades has led to an emphasis on export crops and a restructuring of agriculture to produce them. Brazilis an example of this change, which has led to deforestation and multiplication of the hungry, homeless and alienated, the new “barbarians within the gates.” Comparable developments are seen in the U.S., threatening fiscal and political stability in many countries.     

Static profitability as a measure of deviations from the competitive norm

Recently, several industrial-organization economists have claimed that the rate of return on sales (II/S) is superior to the rate or return on assets (II/K) as a measure of monopoly power. This paper argues that there is no reason to prefer one index over the other. To make the point, an oligopoly model of optimizing agents is derived that yields II/K as a performance measure. The derivation leads to natural interpretations of the two indices and therefore to clarification of the circumstances under which each might be preferred.     

An Address by a Georgist Sympathizer: Practical Issues in Georgist Thought

The justice and soundness of the taxation of land rent is acknowledged but problems in assessing imply a need to introduce better methods. This is particularly true when attempting to introduce the more saleable idea of two-rate tax systems because the allocation of total value of real estate parcels between land and buildings is even more arbitrarily done than determining the total assessment. The ideas fit best at the local level and there is little chance of replacing income or sales taxes. A 100% tax would be impossible since it would lead to an avalanche of tax appeals and the abandonment of some land since a high percentage of assessments are in error. The idea of a single tax does not fit modern times when revenue needs determine taxes, rather than the amount of revenue collected determining proper or necessary government expenditure levels. One tax source may be unpopular and regarded as a dangerous concept. Land is probably less important and less relatively valuable than it used to be because of technological change. Some advances in social legislation may mitigate the need for the drastic reform, George who was a moralist deeply concerned about poverty, felt reform was needed in his day. He was right about the impacts of various taxes on economic activity and income distribution.     

Simplified Alonso–Mills–Muth model with a monopoly vendor

One important but unrealistic assumption in the simplified Alonso–Mills–Muth (AMM(0)) model is that the composite good is ubiquitous and thus there is zero shopping cost for residents. This paper assumes that the composite good is only sold by a monopoly vendor inside the city and hence a shopping cost is inevitable for residents. It is shown that the vendor will locate at the city boundary in equilibrium. In contrast to the symmetric land rent pattern in the AMM(0) model, the current AMM(k) model offers an asymmetric land rent pattern in equilibrium. Moreover, this paper shows that a rent-maximizing government either regulates the vendor to locate at the central business district (CBD) (when income is high) or does not enact any regulation (when income is low).     

Book review essays

Book reviewed in this article: Regionalism and monopoly capitalism: a new approach to the study of local power : Dulong, R. 1978: Les régions, l'état et la société locale. Paris: Presses Universitaires de France. Regionalism and monopoly capitalism: a new approach to the study of local power : Logroye, J. Wright, V. editors 1979: Local government in Britain and France: problems and prospects (LGBF). Regionalism and monopoly capitalism: a new approach to the study of local power : Tarrow, S., Katzenstein, P. and Graziano, L. editors 1978: Territorial politics in industrial nations (TPIN). Regionalism and monopoly capitalism: a new approach to the study of local power: Lojkine, J. 1977: Big firms' strategies, urban policies and urban social movements (1975). In Harloe, M., editor, Captive cities.     

Henry George and the Institution of Private Property in Land: A Property Rights Approach

Abstract . Conflicting statements concerning whether the implementation of Henry George's single tax proposal would destroy the institution of private property in land have appeared in the literatures of economics and other disciplines. A number of writers have implied that the taxation of Ricardian rent is equivalent to land nationalization. In the main, followers of George have denied that the single tax would abolish private property in land. Their claim is based on the fact that land titles would remain in private hands under the single tax. Since the whole question of private property is beset with ideological difficulties, a property rights approach is applied to this issue in an attempt to resolve the controversy. The conclusions are that the actual implementation of George's system would not destroy private property in land and that it is incorrect to equate the single tax with land nationalization.