For over twenty years, I have been a Georgist. Most people will probably ask, "So what's a Georgist?" I could answer that a Georgist is a follower of the American economist Henry George (1839-1897), but that would be a pallid definition. Instead, I'll tell a little story.
A man planned to build a house, for which he needed land, so he went to a real estate agent, and described his wants to her.
"I know a lot that should be suitable," she said. "Shall we go take a look at it?"
He agreed, and they went. "Yes, I could build a house here," he said. "How much does it cost?"
"A hundred and twenty thousand dollars," answered the realtor.
"A hundred and twenty thousand dollars just for the land!" exclaimed the man. "For a hundred and twenty thousand dollars, I could buy many acres of the most fertile farmland in Iowa, or whole square miles of sand and sagebrush further west. What's so special about this land that makes it worth a hundred and twenty thousand dollars?"
"As we say in the real estate business, the three most important factors are location, location, and location. This land is located in a major metropolitan area, with plenty of opportunities to find well-paying jobs. All sorts of city amenities are available, from a variety of shops to museums, libraries, and theaters. You can commute to a job downtown, either driving or taking the subway; there's a subway station just three blocks away, which helps make land here more valuable than land just few blocks further away.
"What's more, this is a very pleasant suburb within the metropolitan area. We have a low crime rate, thanks in part to our fine police force. And just in case an emergency should arise, you can dial 911, and the dispatcher will have a squad car here within minutes, or an ambulance, or a couple of fire trucks, whatever you need. We have excellent public schools, so you can get your children a good education without having to pay private school tuition. That alone makes homes here worth thousands of dollars more than homes in the next town, where the school district isn't as good. We have good drinking water, public parks, a town library, and other civic benefits."
"In that case," said the man, "I guess the land is worth a hundred and twenty thousand dollars. Paying so much for the land will mean I'll need to build a smaller house than I had hoped for, get a larger mortgage, and tighten my belt here and there, but I'll buy it. How do I make the check payable."
"To John Smith."
"I take it, then, that Mr. Smith must be in charge of distributing funds to the police, the schools, the road crews, the subway authority, and so forth?"
"Why, no," answered the realtor. "He's a private investor. I believe he bought the land about twenty years ago, before the subway was built, when the population was much lower."
"In that case," asked the man, "how do you pay for all these public services that help make the land valuable?"
"Out of taxes, of course. We have state and local income tax, sales tax, property tax -- part of that falls on the land, most of it on the buildings -- profits tax, and various other taxes and fees."
So what is a Georgist? A Georgist is one who sees the problem here, and the solution as well. Henry George proposed a single tax on the value of land, and the abolition of all other taxes. The physical existence of land is due to God, or at least to whatever brought about the physical universe; the economic value of land is due to society in general, and often to government programs in particular. Therefore, let people pay a tax for the value of the land they occupy, and be at liberty to keep what they produce by their labor and capital. Let them work without paying an income tax, buy what they desire without paying sales tax, improve their property without paying building tax.
Or, as one of Henry George's followers put it, instead of paying rent to the landlord and tax to the state, why not pay rent to the state and no taxes?
Return to homepage