Spencer Heath Archive

Item 1364

Carbon of a letter to C.R. Walker, Editor, Cause and Effect, Suite 705, 127 North Dearborn Street, Chicago, Illinois

March 7, 1941

 

Dear Mr. Walker:

 

     For several months or more I have been intending to drop you a few lines of appreciation for your excellent editorial work and your demonstration of the destructive effects of what Henry George called “schemes of taxation which sap the life blood of labor and capital as the vampire bat is said to suck the blood of its victims.”

 

     This is grand work. A taxed economy can never be a free economy. Taxation is not chattel slavery but it is mass slavery. It takes from the producer a large part of what he produces and leaves him some or, as the Socialist would have it, it takes all of the production and hands some back — if and when. This is no less mass slavery, for there is no recompense. Taxation does not create any values; it only destroys them.

 

     Referring to the shifting of taxation from real estate to other property, it is profitable to bear in mind that a tax on land does not depress the value of the land any more than the amount of the tax. But taxes on production, by reason of their indirect and cumulative effects, are said to diminish production by more than twice the amount of the tax; so that a tax of $1.00 on production not only costs the producer $1.00, but impoverishes him by at least $2.00 more. Thus a direct tax on land is only one-third as injurious to the general income as a like amount of tax laid on production.

 

     Since the market value of real estate is about one-half the value of property, and since the exchanges of the market distribute losses or gains over the whole exchange system in proportion to the value of the property engaged, a tax of $1.00 on production must depress pro­perty values about equally as between real estate and other property. Thus it appears that when real estate shifts a $1.00 tax to industry, then the $1.00 which real estate gains becomes offset by the $1.50 which it loses. The real estate business is then being done at a loss of 50% greater than the amount saved.

 

     How much better if the 10% would serve the 90%, who are their customers, by procuring the removal of $1.00 taxation from them and, thereby, restoring the value of real estate by the amount of $1.50, if the removed tax was an unnecessary one, or by 50% if the removed tax had to be replaced out of rent.

 

     If the abolishment of taxation is a service to production, which it certainly is, then the natural recompense for this service, if performed by land owners, will be the increased rents which flow back to them. Performing such services for land users would bring the land owners into the exchange market with positive services to land users for which they would be automati­cally recompensed in higher rents and values.

 

     The above point of view is one that ought to have more attention from Henry George men of brains and capacity, like yourself — men whose minds are not clouded by the moralistic superstitions and vain representations of the Old Testament Single Taxers, who seem to invoke the principle of “an eye for an eye” and “a tooth for a tooth” in preference to the law of service by exchange between land owners and the owners of other kinds of property. The same men who uphold the proprietary administration of all other kinds of property in the interest of the owners, customers or clientele, seem to be stone blind as to this same relationship between the public pro­prietors and the rest of the population whom they do or may serve.

 

     Assuming your alert interest and good analytical powers, I am enclosing, herewith:

 

First, Copy of letter addressed to the Director of the Henry           George School and of a more extended statement that was           appended thereto.

 

        Second, A functional explanation or analysis of property in             land.

 

       Third, Two pamphlets (the one being an introduction to the other)       setting out the natural engin­eering technique for the         utilization of the natural laws that operate in the             institution of property in land.

 

        Fourth, A little pamphlet entitled, “The Inspiration of Beauty”              in which you may discover the psychological foundations            — the positive motivation upon which all creative              activity and discovery depends.

 

     Please give this letter and the matter accompanying it your leisurely attention and consideration. It is not anything that can be dismissed lightly without great loss. You will find here some actual social discovery comparable to the discoveries that have been and are being made in the realm of the natural sciences. They are not offered for controversy but only for examination. Please do not publish them. They are intended only for the intellectual elite.

 

                            Very sincerely yours,

 

 

SH:ML                             Spencer Heath

Enc.