Spencer Heath Archive

Item 1083

(Because of limitations of word processer, first paragraph has been rearranged from diagrammatic form to words.)

Labor uses Services in land and Services in goods, and for them pays (1) Rent to landowners and (2) Interest to other laborers and taxes to public laborers for the service to land for which it also pays rent.

But cost of collection and damage to production is, say, three times net taxes. But when collected, not more than one half of net taxes are productive of land value. This makes land value (services) cost eight times more than it should, so rent falls below cost except as advance in the arts carries production ahead of costs. When this occurs rents rise rapidly, speculation sets in, all costs are thereby increased to offset the advance in the arts and rents fall again. Rent, wages and interest all come from production and all rise or fall together. The only exception is where fast growing population keeps up an abnormal demand for land value. Why do not all three advance continuously? Because /of/ the high cost of producing land values (by public services costing eight times what they should).

This cost could be reduced by requiring land owners to pay out of rents the entire cost of public service. This would relieve industry and productions of about seven-eighths of its present cost and damage by reason of taxes, leaving one-eighth to go to increase rents, for land value then would be worth at least its cost to industry as measured by the total rent (taxes) paid via the landowner.

If the landowners, besides paying out of rents the cost of public service, should also work the public enterprises, then most of their taxes (out of rent) would come back to them in wages (salaries), and if besides taxes they made further investments in public enterprises and effectively administered these investments and enterprises, they would make enormous profits upon their investment and labor. And the same could then be true of those investing in private enterprises then emancipated from the destructive tax burdens on productive activities and the burden of public waste and corruption.