Question

Discuss Henry George’s progress and poverty and single tax movement

Answer 1

Henry George ​​​​​​​was an American political economist and journalist, born on 2 sep 1839 and died 29 Oct 1897.

Henry George is a treatise on the questions why poverty accompanies economic and progress technology and why economies exhibit a tendency cyclical toward bust and boom

George uses deductive logic and history to argue for a radical solution focusing on the capture of economic rent from natural resource and land titles.

George's first book is progress and poverty which sold several million copies, exceeding all other books in 1890except the Bible. It helped spark the Progressive Era and a worldwide social reform movement around an ideology now known as 'Georgism'.

In Progress and Poverty Henry George wrote

I mean that the tendency of what we call progress material in nowise to improve the condition of the lowest class in the essentials of healthy, happy human life. Nay, more, that it is still further to depress the condition of the lowest class.… It is as though an wedge immensewere being forced, not underneath society but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.

In George's time, known as the "single-tax" movement and sometimes associated with movements for land nationalization, especially in Ireland. However, George did not favor the idea of nationalization in progress and poverty.

George noted most taxes stifle productive behavior. A tax on income reduces person incentive to earn income, a tax on wheat would reduce wheat production, and so on. But a tax on the unimproved value of land is different. The value of land comes from two components, its natural value and the value that is created by improving it

George was not simply trying to design a taxation system devoid of untoward consequences he felt that virtually all problems of economic arise from “the fact that the land on which and from which all must live is made exclusive property of some.”

His goal was nothing less than to make all cmmon land property, but he realized that, “it is not necessary to confiscate land; it is only necessary to confiscate rent.”

George was right that other taxes may have stronger disincentives, but some economists recognize that the single land tax is not innocent, either. Site values are created, not intrinsic. A tax on the value of a site is really a tax on productive potential, which is a result of land improvements in the area. Henry George’s proposed tax on one piece of land is, in effect, based on the improvements made to the neighboring land.