National Georgist principles were established in September 1890 in the Platform of the Single Tax League of the United States: https://www.facebook.com/notes/common-wealth-tax/doc-120-the-1890-georgist-constitution/813168725462939/
And a few years later in October 1893 Thomas Shearman proposed a 20-page “Just and Practicable Income Tax” before Congress’s Subcommittee on Internal Revenue: https://www.facebook.com/notes/common-wealth-tax/doc-129-a-just-and-practicable-income-tax-1893-thomas-g-shearman-before-the-ways/889328957846915/
This essay assumes that the Georgist income tax was accepted by the Subcommittee in 1893 and that the 16th Amendment had then been in place so the tax would not have been ruled unconstitutional in Pollock v. Farmers’ Loan (1895).
The Single Tax, of course, was not literally a single tax, but a tax system. This is my best educated guess as to what the tax, enforced globally, would look like today.
The most accurate modern meaning of “Single Tax” would refer to a single global uniform tax on unearned income, broadly interpreted to include all forms of income that are unearned, but would not refer to any tax on wages.
The central feature of the taxation of these various forms of unearned income is that the tax doesn’t get shifted back onto consumers and wage-earners. In other words, the tax burden or “tax incidence” stays where it’s put, on the intended recipient of unearned income.
As I explain in Doc# 133 Henry George often used the terms “land values” and “economic rent” interchangeably to refer to his Single Tax, where it was generally understood that all economic rent ultimately comes from privileges over natural resources, which is why he used the general term “a single tax on land values.”
In addition to the use of “economic rent,” in the 1890’s tax scholar Edwin Seligman of Columbia University used terms like “pure profits” and “economic surplus.” Seligman’s use of “pure profits” is important because it disambiguates Henry George’s use of the word “profits,” which often referred to a wage-reward that accrues to a non-incorporated businessperson. George did not have corporations in mind when he defined the word “profit” and “interest” in Progress and Poverty (1879), but Seligman (and later Shearman) did factor in the dramatic growth of corporations in the 1890’s.
Karl Marx used the term “surplus value” or “surplus value added” to refer to unearned income.
David Ricardo and J.S. Mill often used the terms “economic rent” or “unearned increment.”
Unearned income is composed of landlord net rental income, capital/land gains on sale of land, dividend income, interest income, royalties, winnings from gambling, inheritances, gifts, gains from speculation, unearned profits derived from hiring the labor of others, etc.
Wage taxes are not allowed under the Single Tax, and additionally, the following taxes would be phased out or abolished because they are ultimately paid by wage-earners: property taxes, sales taxes, excise taxes, imposts, duties, tariffs, other taxes on commodities, meal taxes, hotel taxes, use taxes, etc.
Fees and tolls are not considered to be taxes, so would continue under a global Single Tax system.
Fines and penalties, including “sin” or Pigouvian taxes, are not included in the Single Tax system, therefore taxes on pollution, alcohol, tobacco, etc. would likely continue under a Single Tax system.
Under a Single Tax system, the employer’s government-granted and protected privilege over natural resources, as well as his/her enjoyment of various other government-granted privileges, are seen as creating jobs, not the employer personally.
The corporate employer generally creates a competitive environment within which everyone is reasonably compensated under prevailing economic circumstances, and therefore the corporation generates economic rent or unearned income that is fully taxable. This is what Seligman called “pure profits” or “economic surplus.” Shearman and George called it “economic rent.”
All of the corporation’s capital goods, equipment, land improvements, etc. are assumed to be accurately depreciated, and where applicable, research and development costs are also deducted from gross corporate income.
Therefore, all net corporate profits, as well as any dividends paid to shareholders from the net profits, are considered to be pure unearned income, and fully taxable, both at the corporation’s entity level and then taxed again when dividends are received as unearned income by the shareholder, but of course the total tax never exceeds the amount of unearned income generated by the corporation. Finally, gross corporate income is never taxed under a Single Tax system; only net profits.
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Rick is a self employed attorney from Boston, Massachusetts. He graduated from Boston College and studied law at the Massachusetts School of Law at Andover. He also administers the Facebook group called Common Wealth Tax, which seeks to explore the (currently obscure) link between modern income tax laws and the Land Value Tax (LVT) advocated by political economist and “Greenbacker” Henry George (1839-1897).