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SCI LIBRARY

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.