[Reprinted from Land and Freedom, September-October 1936]
It has become the habit, if not the fashion, to say that "industry
is burdened with taxes." This expression is not in accordance with
actual fact. Industries are merely collectors for the Government,
and get paid for collecting. Taxes on secondary industries are part
in the cost of production and go into the price of goods and service
with the regular profit added to the whole. At every stopping place
in the criss-cross course of material and unfinished goods, at every
line of transport, taxes are added on top of taxes with profit as cost
of collection, until reaching the consuming public which buys and pays
for more taxes than goods. This is the first lesson that should be
taught in schools of social economy. When the consuming public
tumbles to the trick that is being played on them then look for reforms
to commence, and the new generation, once started, will not stop
halfway. That the increased price reduces consumption, thus curtailing production and employment, is incidental, demand governing supply.
A very large part of the taxes thus collected are wasted in support
of a horde of useless and troublesome political office cats, most of
whom had better be discarded and left to find more useful pursuits
for their living.
Taxes collected on labor and industry are substitutes for revenue
the community earns, and its government does not get, thus shifting
the rent into the price of goods. To this extent Mr. E. Jorgensen
is perfectly right, and it does not require a whole book, nor two of
them, to tell and explain that much.
One other expression that runs outside reason is, "Take the whole
rental value of land." In the first place, this is impossible; second,
even if it could, it ought not to be done. Speculation should, of
course, be taxed out; land held idle or poorly used should yield its
share, pay or quit and leave the chance for better men. But just
as a man is making improvements on his land does so on the assumption that it will become worth more to him than its cost, so must
public improvements and services be of higher value to the payer
than the price asked as otherwise all incentive to social progress would
be lost, at least on their part.