Canons of Taxation

The canons (or maxims) of taxation are the classic criteria by which a tax is judged good or bad. Two statements dominate the tradition: Adam Smith's four maxims (1776) and Henry George's four conditions (1879). Georgists invoke both because a tax on land values scores unusually well against each — the argument George makes when he "tries the proposition by the canons of taxation."

Smith's four maxims (1776)

In The Wealth of Nations, Book V, Ch. II, Part II, Smith lays down what later writers call the four canons (F-claim; see the book page for the verbatim quotations):

1. Equality. Contribute "in proportion to the revenue which they respectively enjoy under the protection of the state."
2. Certainty. The tax "ought to be certain, and not arbitrary" — clear as to time, manner, and quantity.
3. Convenience. Levied "in the manner… most likely to be convenient for the contributor to pay." Smith's own example of a well-timed tax is one on the rent of land or houses.
4. Economy. Take "as little as possible, over and above what it brings into the public treasury."

Smith applied these to many taxes and reached no single-tax conclusion.

George's four conditions (1879)

In Progress and Poverty, Book VIII, Ch. III ("The proposition tried by the canons of taxation"), George gives his own list. In his words, "the best tax by which public revenues can be raised is evidently that which will closest conform to the following conditions":

1. "That it bear as lightly as possible upon production."
2. "That it be easily and cheaply collected, and fall as directly as may be upon the ultimate payers."
3. "That it be certain — so as to give the least opportunity for tyranny or corruption on the part of officials, and the least temptation to law-breaking and evasion on the part of the taxpayers."
4. "That it bear equally — so as to give no citizen an advantage or put any at a disadvantage, as compared with others."

George's conditions overlap Smith's — his 3 and 4 restate certainty and equality — but foreground the efficiency criterion, lightness upon production, that Smith folds into economy.

How LVT scores

Proponents argue a land value tax conforms to both lists better than any alternative (D-claim; interpretive — the Georgist reading, not a neutral verdict):

• Lightness on production / economy. Land's supply is fixed, so taxing its rent creates no deadweight loss and cannot be shifted onto tenants — an efficiency property held across the ideological spectrum.
• Certainty. Once assessed, site value is visible and fixed; land cannot be hidden or removed.
• Convenience. Smith's own model of a well-timed tax is a tax on land rent; assessment is the main cost.
• Equality. It falls on value "enjoyed under the protection of the state" and created by the community, not the owner.

Critics accept much of this while disputing whether land rent is a large enough base (see Objection: LVT can't raise enough revenue) and whether assessment is as clean in practice as in theory.

See Also

• Adam Smith · The Wealth of Nations
• Single Tax · Land Value Tax
• Deadweight Loss — the efficiency criterion LVT uniquely satisfies
• Progress and Poverty — Book VIII, Ch. III applies the canons

Sources

1. Adam Smith (1776), The Wealth of Nations, Book V, Ch. II, Part II — used for the four maxims (verbatim). Quotations and Georgist scoring on the book page; repository full text at sources/publicdomain/wealth-of-nations.md (public domain).
2. Henry George (1879), Progress and Poverty, Book VIII, Ch. III — used for George's four conditions (verbatim); verified verbatim against the repository full text (Project Gutenberg #55308) (public domain, EDITORIAL §3b).