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As I read The LandMarker I was reminded of my studies of Progress and Poverty in the '40's. Then, as now, I had one strong reservation about the theory of land value taxation. In spite of all George's arguments, I felt that a tax on land could very definitely be passed on by the owner to the user. My argument is as follows:

Any monopoly enables the holder of that monopoly to charge in the marketplace a price equal to his total cost of production (cost of maintenance, cost of ownership, etc.) plus whatever he wants as reasonable profit. Economists disagree over what determines the exact amount of profit that can be extracted in a monopoly situation. But we don't have to solve that equation in order to make the point.

The point is that a monopoly, i.e. the possession of what is publicly perceived as a unique, indispensable entity, puts the holder in an economic stronghold. One of the major reasons for advertising is to establish monopolies. Advertising seeks to differentiate essentially similar products from each other, and thereby to create a monopoly for each respective owner/producer.

Now, let's say some additional government tax were to be levied against auto manufacturers in exact proportion to the value of the car they turned out. That tax would be passed on automatically and immediately to the consumer without the issue of supply and demand entering into the picture at all. The only thing that each car manufacturer would have to do is maintain and perpetuate the idea of his product's unique worth and unique qualities through advertising. He could thereby readily maintain his monopoly and his share of the auto consumer market. Assuming other variables in the economy are held constant, everything would go on as before. Neither supply nor demand would necessarily fluctuate at any point. Only a proportional, across-the-board price hike would have been instituted.

It seems to me that the same thing would happen vis-a-vis landowners if a land value tax were passed. Landowners don't really have to work to create a monopoly. Each landowner has a built-in monopoly. That's because each land site has unique situational and resource advantages.

In almost all U.S. markets today, there is no free land -- no land without any value that a potential user can resort to. Virtually all the land is owned. So with the coming of a land value tax, all the land would be subject to some tax. And as in the case with the automobiles, this tax would be passed on automatically and immediately by the owner to the renter, buyer, or user of the land. The most any owner would have to do is to reemphasize in the public mind his parcel's unique qualities. Thereby his monopoly would be secured.

Again assuming other economic factors are held stable, the total demand for land would remain the same. All land would maintain its same relative position in the continuum from least valuable to most valuable. As with the auto example, the only difference would be that a proportional, across-the-board price hike would have been instituted.

The fact that land can be neither created nor destroyed doesn't matter. The fact that there is no literal cost of production involved doesn't matter. When a monopoly exists, all laws of supply and demand are suspended anyway. A monopoly holder is free to make his own rules and set his own prices -- within limits. And isn't it after all a monopoly we're talking about when we talk about a landowner and his unique piece of land?