A Solution For Unemployment

S.S. Taber

[Reprinted from Land and Freedom, March-April 1929]

The fact that men are actually unable to employ "themselves in this richest and most prosperous of all nations, is an indictment of our social order. It is not only absurd and ridiculous, but criminal as well. While a number of causes contribute to this condition, the most important factor is our method of taxation. The sovereign power to tax carries with it the power to destroy. Our method, or lack of method of using this power, is surely undermining and destroying our civilization. When this power is allowed individuals or an organized group of individuals, (a special privilege), to indirectly collect tribute from their fellow-citizens, it leads to the concentration of wealth and political corruption.

But of the many disastrous results of our tax policy only five are here presented.

First: the taxation of industry, (capital and labor), and the products of labor, necessitates an increased price for the goods produced; thus increasing the cost of living for all consumers. Its tendency is to hamper and oppress industrial activity, individual initiative and enterprise.

Second: this taxation of industry that is now estimated as carrying four-fifths of the entire burden, is a powerful incentive and stimulation to speculate in and hold land. The ever increasing land values in growing communities, as compared with the light tax, renders such speculation and ownership exceedingly profitable.

An unusual profit was mentioned recently by Mr. H.G. Zander, President of the National Association of Real Estate Boards. He is reported as saying : "In Chicago there was a certain piece of property that could not be sold for $30,000 five years ago. Recently, after street improvements had been made, it sold for more than $1,000,000. This unearned increment was handed to the owner on a silver platter by the entire city of Chicago, which paid the cost of improvement by a bond issue spread over the whole city." It will be noted that our tax laws allowed $970,000 worth of land value, created by the taxpayers money, to be diverted to this one particular land-owner. It was most decidedly, "unearned increment." With such immense prizes to be gained, why should not men of vision and foresight, engage in land speculation and ownership?

Third: this incitement to land speculation by the taxation of industry, has a most deplorable result in closing opportunities against the worker, and thus denying self-employment. Labor's only outlet, the natural resources of Mother Earth, from which all wealth is derived and all life sustained, is an almost closed shop to future demand.

It makes little difference what kind of labor is seeking a job; whether the hopeful young graduates of the schools attempting to establish homes, or the older workers who are now being rapidly displaced by modern inventions. The only chance left them to utilize the earth that Nature has given to the children of men, is to assume a heavy mortgage for a long period, which would finally break them, in case of sickness or accident.

Fourth: the excessive price of sites is responsible for the housing problem, that Senator Copeland of New York claims is becoming serious; already, a quarter of a million buildings behind our need.

This shortage of buildings forces the unemployed to overcrowd the poorer quarters, and this situation creates the slum district, where poverty and destitution soon rob the victims of self-respect, and crime and criminality, naturally follow.

Fifth: the taxation of industry is a most pernicious, unrecognized and unsuspected method, of transferring wealth from one class of people to another class of people; in other words, land users, men of enterprise, ambition and industry, are taxed by their own laws to make up the deficit in the budget, occasioned by awarding land owners a large portion of the ground rent conferred upon their land, by the social and governmental activities of their fellow-citizens. Why should a goodly portion of the earnings of 80 to 90 per cent, of the people, (land users), be transferred by taxation to the private pockets of 10 to 20 per cent, of the people (land owners)?

By what moral right does possession of land convey or justify ownership of the ground rent, land value, or better, people-value, that increases or decreases with the coming or going of the people? That land itself is simply a reflector or looking-glass of the values the people themselves create is clearly seen. If it is true that the thing created is rightfully the property of its creator; if individual earnings belong to the individual, ought not social or land value belong to society, or the organized people who create it?

These five indictments of the present tax on industry, indicate just how absurd, ridiculous and criminal, the Robin Hood style of collecting public revenue actually is.

A style that increases prices; induces speculation in the only source of food and life; creates involuntary unemployment; develops crime, and robs the workers on the land, to award unearned increment to owners of the land.

If the citizens were to derive all their governmental needs from the land values they create, it would be a scientific method; a payment for benefits received; in harmony with every day business principles; a quid pro quo.

The citizens through their organized services and developments, confer upon themselves increased values which are reflected in these particular sites. Under the plan suggested the citizens would return an equivalent value to their own treasury, for further service and development. A revolving fund, ever increasing and adequate to the city requirements.

This equitable, square deal method of securing public revenue, eliminates all taxation of industry, personal property and improvements; hence, greatly reducing the cost of living. Again, this method abolishes all land speculation, and opens the natural resources of the earth to use; thus leaving no excuse for unemployment.

This solution of the unemployment problem can be practically applied when sufficient voters demand it. The voters of this generation, if willing to surrender their possible fraction of a chance to get rich at the expense of their fellows, can thus easily unlock the treasures of Dame Nature to all unemployed. Not so very heavy a price to pay for so great a boon.