2004-12-03 / On Second Thought

The single tax: a cure for a great primary wrong

By William Whitley Hodges, J.D.

Recently, a few of our federally elected representatives, desperate for publicity and controversial issues, ventured into the dank and dark waters of the old single tax movement.

This idea is nothing new. In 1880, a California printer/editor, Henry George, began his single tax movement with the religious fervor of an evangelical, circuit–riding, Bible–thumping minister. His idea of a single tax was just what the people of 19th Century America wanted to hear. George believed he was ordained to introduce and have enacted national laws that would restrict taxation to a single tax. This promise of social salvation from unreasonable taxation was very tempting as most of George’s contemporaries felt the growing morass of state and national taxation was truly what he called a “great primary wrong.”

Henry George also wrote a book, Progress and Poverty , in which he outlined his philosophy as to the single tax theory. The book had many proponents and few opponents. In one book review from the New York Sun , March 13, 1880, a critic stated that George’s “conclusions, however, strange and revolutionary they may seem in their bearing upon society, will not be rejected by sober and impartial men without mature deliberation.” The title of the book also intrigued many New Yorkers as it was about “progress” and “poverty.” George’s strange admixture of progress and poverty made many people accept his idea that people are often poor due to excessive taxation and government involvement in their lives. Even in conservative 19th Century New York, the book began to gain popularity. Finally, many New Yorkers declared that Henry George had developed an original social solution to a very perplexing question.

Today, conservatives are again voicing this same idea: that small and medium–sized businesses are often placed in financial straits because of excessive taxation, duties, tariffs, licenses, etc. They are especially concerned with the capital gains taxes imposed on their property transfers and inheritance taxes leveled against their children after their deaths (both of which are taxes on legal fictions).

The simplistic idea of a single tax is quite narcotic in its effect. When a person thinks about paying just one tax, perhaps a value–added or excise tax on products used, not a tax on legal fictions, the temptation becomes increasingly intoxicating. When the small business owner sees their business run without corporate and personal tax returns, the intoxication becomes even more pronounced.

On the other side, the liberals still hold out for the promise of large government being a solution to all of society’s ills. Liberals still envision a large government which furnishes its people medicine, dentistry, housing, waste collection, water, agriculture, prisons, social welfare, ad nauseam if and only if the people pay huge taxes for these socialistic services. If Henry George were here today he would most probably decry such an idealistic “womb to the tomb” policy while proclaiming private enterprise as the proper vehicle for all of these services and without government interference and taxation.

So, we’re back to the true argument of the day. Do we really need to collect such large sums of taxes from our citizens to promote large state and federal agencies or can these areas of society be handled by private enterprise?

And, if they can be privatized, why do we need such a large tax burden placed on individuals and businesses? Should our taxes not be seriously slashed? And should we, as individuals and businesses, be subject to one simple and fair tax on all products and services in our country?

Henry George’s single tax movement never did fully die, it has been floating around in economic and political circles since the 19th Century. Since we have been involved in wars almost every ten years of our country’s history, the government has always had an excuse for not enacting a fair and effective single tax.

There is the possibility that the single tax might become the greatest boon to capitalism and democracy the country has experienced since our 1776 fight with King George III over taxes. The single tax could promote a powerful economy, heavy investments, and generate employment at an all–time high. Then, again, are we what the Europeans call us: gullible and politically naïve Americans who support the Deficit Spending Party with its two branches, the Republicans and Democrats? Perhaps. Are Europeans correct to say we Americans are “dumbed–down” and that we don’t have an inkling of an idea of how to run our government? Perhaps.

Return to top