Spencer Heath Archive

Item 1007

Penciling in a notebook. Note that this was written during the Great Depression when real estate was severely depressed.

1934?

Original -> 1001

If a merchant sells goods at a profit he gladly buys new stocks and pays promptly. Paying is no burden because he sells them at a profit. Advancing them to the consumer is his job. The profit he gets is his wages for his work.

     The government, state and federal, provides public services just as a manufacturer provides goods. It delivers these services to the owners of valuable locations, whether improved or unimproved. The owner has these public services for sale or rent. He calls it selling or leasing land or lots. Large owners of unimproved lands that have public improvements and services adjacent to them are wholesalers of public services. They sell to consumers — land users — the services that government manufactures, and they would gladly pay for these goods like any other merchants, wholesale or retail, if they could sell the goods at a profit. Under this arrangement, the taxes /on land/ would be no burden; there would be a profit in /the land owners/ paying them, and no tax collector would be required.

    But something is the matter with the customers. There are plenty of public improvements and services, but they are not selling well. There is lack of demand. Land values have fallen, rent has declined.

Our taxing arrangement puts most of the costs of public services exclusively on the users of land in many and devious ways. It is as though the manufacturer of goods should make the consumer pay his costs before the goods go to the merchant. This method of taxation destroys the market of the wholesaler so that it is difficult for him to sell and he pays very unwillingly a small part of the cost of the public services which he has, so to speak, on his shelves for his retail customers. Of course, the consumers pay unwillingly for the public services they do not get, and thus it transpires that taxes become a burden to all concerned.

     The ownership of land, apart from improvements, is indeed a high calling. The owners must see that the public services are adequately financed and efficiently manufactured and, at the peril of their rents and values, they must protect the prospective users of their lands from every kind of tax and imposition that reduces their profits and productiveness and keeps them out of the market for public services. They must be vigilant and valorous against taxes on incomes, on sales, on purchases, especially on imports, on gasoline, on private improvements, on all kinds of personal property, all licenses on occupations and other charges and restrictions that hamper and diminish the production of wealth and hence the need for and the ability to pay for public services.

     If they would prosper, the lords of the land must be lords, indeed. They must protect the users of land -— the producers of rents and of every form of wealth and revenue — from official racketeering in the guise of necessary taxes and restraints and by maintaining and directing the public services become the “greatest among you” through being the “servants of all.”

Your Mr. James P. King /?/ in a recent article on Sources of Tax Revenue points to the need of basic change. He says:           

                        /Quotation missing/

Such a fair and effective system will be found when land owners are recognized as the necessary recipients and purveyors of all the services and values that government creates. This is what rent, annual or capitalized, is paid for. But rent is paid out of production. It rises and falls with the advance or decline of production. It is the proper office of landowners as such to unbind production from all restraint. They will then have an open market for what they have to sell and they can then finance the public services at less cost than what they receive in rent. If they administer the services wisely and well this difference will be a very great and honorable reward. And their administration of the public funds and services cannot be corrupt because corruption will be reflected in lower rents and values, whereas virtue will have its pecuniary rewards.        but honesty and efficiency will yield them pecuniary reward