The United States Constitution on Taxation
Benjamin W. Burger
[Reprinted from Land and Freedom,
November-December 1938]
The Georgeian Philosophy, wrote Tolstoy, need only to be understood
to be accepted. "How," asks the beginner, "can this
wonderful concept of justice be translated into reality? What laws
must we have to make it work? The impression is widespread that we
cannot collect our land rent without new, radical legislation."
Until recently I shared it.
What basis is there for this widely accepted view.
In an article in LAND AND FREEDOM (January-February 193-, page 10)
entitled "Federal Land Taxes in the United States," J.
Edward Jones showed how Congress on four occasions between 1798 and
1861 had called upon the landlords of the United States to hand over
land rent. Not once was the right or power of the Federal Government
to collect land rent challenged.
Land rent had been collected in England as early the year 994, in the
Reign of Ethelred (see Historic Sketch of the Distribution of the Land
in England, by William Lloyd Birkbeck, No. 78 the Humboldt Library of
Science, published April, 1886).
The slogan of the thirteen colonies in their rebellion against, Great
Britain had been "Taxation without represntation is Tyranny."
Taxation meant, and still means, the power of government to
appropriate as much of the wealth produced by its inhabitants as it
deems necessary or expedient. We believe that any seizure by society
of all, or a portion of an individual's wealth, not based on the
return to the individual of the exact equivalent of service by society
is robbery.
Land rent, and land rent alone, reflects the value public service and
is the measure of such service. society fails, as it does, to collect
the land rent which has created, it must resort to taxation to acquire
the means to perform its public functions. In determining the nature
and extent of this enforced contribution, the was and is no
consideration of the debtor-creditor relationship existing between the
taxpayer and the tax collector. Public policy in 1776, as now, was "Whenever
you see a head (taxpayer), hit (tax) it."
In these circumstances, it is difficult to perceive how the
remonstrances of the colonists against being robbed or present-day
complaints against taxation, could be overcome by permitting the
citizens to elect the representatives who frame the laws to tax (rob)
them.
Article 8 of the Articles of Confederation under which the thirteen
independent colonies ruled themselves from 1776 to 1783 provided:
"All charges of war and all other expenses that
shall be incurred for the common defence or general welfare and
allowed by the United States in Congress Assemble shall be defrayed
out of a common treasury, which shall be supplied by the several
states, in proportion to their value of the land within each State
granted to or surveyed for any person, and such land and the
buildings and improvements thereon shall be estimated according to
such mode as the United States in Congress Assembled hall from time
to time direct and appoint."
The framers of our Constitution who met in Philadelphia between May
and September, 1787, were educated men, well grounded in economic
understanding. In The Federalist, a series of eighty-five papers
written principally by Alexander Hamilton and James Madison, they
sought to justify the decisions which they had arrived at in secret
session. Seven issues (Nos. 30 to 36 inc.) all of which were written
by Hamilton dealt with taxation.
Issues No. 12 and No. 36 refer to land value taxation.
Article 1, section 8 of our Constitution reads:
"The Congress shall have power to lay and collect
taxes, duties, imposts, and excises . . . But all duties, imposts,
excises shall be uniform throughout the United States."
Observe that there is no qualification, restriction, or limitation on
this tremendous power to tax except that it "shall be uniform
throughout the United States" (and the implied qualification that
taxes may be used for public purposes only).
"It will thus be seen that whenever the government has imposed a
tax which it recognized as a direct tax, it has never been applied to
any objects but real estate and slaves." (See Opinion U. S.
Supreme Court, Springer vs. United States, 102 U. S. 586 at page 599.)
Once we concede that government may collect land rent, there is no
limit as to how much of that rent it may collect. Congress is the sole
judge. Under the well known rule of separation of governmental powers
into three distinct independent branches (legislative, executive and
judicial), the courts cannot interfere, and since the Constitution, by
its own terms (Art. 6) is the supreme law of the land, no state may in
anywise impair the power of the Federal Government in that respect.
A state may by its Constitution restrict its own powers. The
Constitution of the State of Tennessee, for example, (Art 2, sec. 22
provides):
"All property shall be taxed according to its
value. All property real personal or mixed shall be taxed. No one
species of property from which a tax may be collected shall be taxed
higher than any other species or property of the same value."
Under this Constitution Tennessee could not, for its own purpose
exempt improvements from taxation since they are included in the term
real estate. Likewise, land rent could not be collected, in lieu of
taxation, since it is included in the term "Species of Property,"
and one species of property may not be taxed higher than another.
Similar provisions appear in the Constitutions of some other states.
On the other hand, the Constitution of the State of New York
recognizes the unique nature of land. It provides (Art. 1, sec. 10):
"The people of this State, in their right of
sovereignty are deemed to possess the original and ultimate property
in and to all lands within the jurisdiction of the State; and all
lands the title to which shall fail, from a defect of heirs shall
revert or escheat to the people."
Examine the four instances where Congress has heretofore exercised
its unchallenged and unquestioned power to collect ground rent.
The act of Congress approved July 14, 1798, Chap. 75 of the Fifth
Congress, provided that the states should be taxed two million dollars
for the support of the Federal Government. After providing for taxes
at certain prescribed rates on dwelling houses and slaves the act
continued:
"The remainder of the said sum shall be assessed
upon the lands within such states according to the valuation to be
made pursuant to the act aforesaid, and at such rates per centum as
will be sufficient to produce the said remainder."
Here are some of the assessments provided by law:
New York $181,680.70 Pennsylvania 237,177.72 Massachusetts 280,435.31
The next act, approved August 2, 1823 (Chap. 37, Laws 13 Congress)
provided that the states contribute three million dollars to the
Federal Government. It set forth in minutest detail the amount to be
paid by each state, as well as every city, county and town
The third act of Congress, approved January 9, 1815 (Chap. 21 Laws
13), Congress provided that the states contribute six million dollars
(afterwards reduced to three million dollars) to support the Federal
Government.
Section five of this act provided:
"That the said direct tax shall be assessed and
laid on the value of all lands and lots of ground with their
improvements, dwelling houses and slaves by the respective assessors
at the rate each of them is worth in money."
The last land tax approved by Congress, August 5, 1861 (Chap. 45 Laws
57 Congress) provided for a direct tax of twenty million dollars.
Section thirteen provided:
"That the said direct tax laid by this act shall be
assessed and laid on the value of all lands and lots of ground with
their improvements and dwelling houses which several articles
subject to taxation shall be enumerated and valued by the respective
assessors at the rate each of them is worth in money on the first
day of April, 1862."
In the light of the foregoing, I think that we may safely conclude:
- That the Federal Government can forthwith, without any
constitutional change, call on the states for all our land rent.
- That the Federal Government can forthwith cease to levy income
taxes, excises, tariffs and the like.
- That the Federal Government can distribute our land rent to the
several states on the basis of their respective populations,
imposing as a condition precedent that the states shall not tax
their inhabitants.
Thus, by the simple act of Congress, without the slightest change in
organic law, the Georgeian Philosophy may be immediately and
completely put into operation here and now as a Federal measure.
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