Whoever calmly reflects and candidly decides upon the
merits of indirect taxation must reject it in all its
forms. But to do that is to make a great stride toward
accepting the single tax. For the single tax is a form of
direct taxation; it cannot be shifted.11
"A tax on rent falls wholly on the
landlord. There are no means by which he can shift the
burden upon anyone else. . . A tax on rent, therefore,
has no effect other than its obvious one. It merely
takes so much from the landlord and transfers it to the
state." — John Stuart Mill's Prin. of Pol.
Ec., book v, ch. iii, sec. 1.
"A tax laid upon rent is borne solely by
the owner of land." — Bascom's Tr.,
p.159.
"Taxes which are levied on land . . .
really fall on the owner of the land." — Mrs.
Fawcett's Pol. Ec. for Beginners, pp.209, 210.
"A land tax levied in proportion to the
rent of land, and varying with every variation of
rents, . . . will fall wholly on the landlords."
— Walker's Pol. Ec., ed. of 1887, p. 413,
quoting Ricardo.
"The power of transferring a tax from the
person who actually pays it to some other person varies
with the object taxed. A tax on rents cannot be
transferred. A tax on commodities is always transferred
to the consumer." — Thorold Rogers's Pol.
Ec., ch. xxi, 2d ed., p. 285.
"Though the landlord is in all cases the
real contributor, the tax is commonly advanced by the
tenant, to whom the landlord is obliged to allow it in
payment of the rent." — Adam Smith's Wealth
of Nations, book v, ch. ii, part ii, art. i.
"The way taxes raise prices is by
increasing the cost of production and checking supply.
But land is not a thing of human production, and taxes
upon rent cannot check supply. Therefore, though a tax
upon rent compels land-owners to pay more, it gives
them no power to obtain more for the use of their land,
as it in no way tends to reduce the supply of land. On
the contrary, by compelling those who hold land on
speculation to sell or let for what they can get, a tax
on land values tends to increase the competition
between owners, and thus to reduce the price of land."
— Progress and Poverty, book viii, ch. iii,
subd. i.
Sometimes this point is raised as a
question of shifting the tax in higher rent to the
tenant, and at others as a question of shifting it to
the consumers of goods in higher prices. The principle
is the same. Merchants cannot charge higher prices for
goods than their competitors do, merely because they
pay higher ground rents. A country storekeeper whose
business lot is worth but few dollars charges as much
for sugar, probably more, than a city grocer whose lot
is worth thousands. Quality for quality and quantity
for quantity, goods sell for about the same price
everywhere. Differences in price are altogether in
favor of places where land has a high value. This is
due to the fact that the cost of getting goods to
places of low land value, distant villages for example,
is greater than to centers, which are places of high
land value. Sometimes it is true that prices for some
things are higher where land values are high. Tiffany's
goods, for instance, may be more expensive than goods
of the same quality at a store on a less expensive
site. But that is not due to the higher land value; it
is because the dealer has a reputation for technical
knowledge and honesty (or has become a fad among rich
people), for which his customers are willing to pay
whether his store is on a high priced-lot or a
low-priced one.
Though land value has no effect upon the
price of good, it is easier to sell goods in some
locations than in others. Therefore, though the price
and the profit of each sale be the same, or even less,
in good locations than in poorer ones, aggregate
receipts and aggregate profits are much greater at the
good location. And it is out of his aggregate, and not
out of each profit, that rent is paid, For example: A
cigar store on a thoroughfare supplies a certain
quality of cigar for fifteen cents. On a side street
the same quality of cigar can be bought no cheaper.
Indeed, the cigars there are likely to be poorer, and
therefore really dearer. Yet ground rent on the
thoroughfare is very high compared with ground rent on
the sidestreet. How, then, can the first dealer, he who
pays the high ground rent, afford to sell as good or
better cigars for fifteen cents than his competitor of
the low priced location? Simply because he is able to
make so many more sales with a given outlay of labor
and capital in a given time that his aggregate profit
is greater. This is due to the advantage of his
location, and for that advantage he pays a premium in
higher ground rent. But that premium is not charged to
smokers; the competing dealer of the side street
protects them. It represents the greater ease, the
lower cost, of doing a given volume of business upon
the site for which it is paid; add if the state should
take any of it, even the whole of it, in taxation, the
loss would be finally borne by the owner of the
advantage which attaches to that site — by the
landlord. Any attempt to shift it to tenant or buyer
would be promptly checked by the competition of
neighboring but cheaper land.
"A land-tax, levied in proportion to the
rent of land, and varying with every variation of rent,
is in effect a tax on rent; and as such a tax will not
apply to that land which yields no rent, nor to the
produce of that capital which is employed on the land
with a view to profit merely, and which never pays
rent; it will not in any way affect the price of raw
produce, but will fall wholly on the landlords."
— McCulloch's Ricardo (3d ed.), p.
207