Review of the Book

Principles of Taxation
Hastings Lyon

Joseph Dana Miller

[A review of the book by Professor Hastings Lyon, at the time of publication
a Visiting Professor of Finance, the Tuck School, Dartmouth College.
Reprinted from the Single Tax Review, July-August 1915]

When a bright, cultivated intellect sets itself to the task of preparing a work that shall embody the "Principles of Taxation," he will tell, or may tell, much that is important in the matter of incidence, but he will omit the principles. This he will not do by design; he will do it because he cannot help himself. For there are no principles of taxation. Taxation is unprincipled.

Taxation is merely a wrong way of doing a right thing. It is an evasive process; it is a body of expedients for exempting the only true source of revenue; it is a class of laws built up with the object of securing immunity to a single favored class. It is always robbery in order to perpetuate a greater robbery -- the taking by a class of values that are per se community values, born with the birth of the community, increasing with its growth, and responding to its needs.

So why quarrel with Mr. Lyon who tells in this useful little book many things the assessor and student of incidence will want to know? What matter if he stumbles a little even on his own ground, as in the following example: After considering what taxes are paid for -- the needs for which they are imposed -- he passes in Chap. II to a consideration of what shall be taxed. After showing how an income from labor does not indicate the same ability to pay as an equivalent income from property, he says: "This is not of course to say that income from labor does not give ability to pay and ought not to be taxed." But on page 22 he says: "That one should pay for benefits received seems to be a sound proposition." And between these two theories of "Ability to pay" and "Benefits received" Mr. Lyon picks his way with the excessive caution of a footpad -- and this is no reflection upon Mr. Lyon, but is due to the criminal nature of the subject matter.

Our readers will be more interested in the author's "refutation" -- the millionth Qne -- of the Single Tax. Mr. Lyon says:

"The proposal is founded on the assumption that the existence of the community creates land values, and that, therefor, the community has a special right to appropriate these values to the general use."

To this he says triumphantly:

"We cannot grant all these premises. To say that land derives its value from the existence of the community is to say that it is valuable because people want it. Is it in that respect any different from grain, cattle, and other things which have value because people want them? If it is objected that the community gives special value to land, that an acre in New York City has a vastly different value from an acre of Texas range land, it is also true that a beef carcass is more valuable in New York City than on the Texas range."

Now it is a very careless Single Taxer who says that the community creates land values, and stops there. In a sense all labor products have a value because there is a community to consume them. But land derives an instant value from the growth of the community, grows with its growth, and derives none of its value from the labor of the owner. A beef carcass in Texas intended for New York is no more valuable in New York, Mr. Lyon notwithstanding, than it is on the Texas range, if we except the labor value given to it by those engaged in dressing and transporting it, and these are not the community, but a small industrial group. Most things are more valuable indeed on the Texas range than they are in New York - pretty nearly all things save land. Bring population to the Texas range -- five thousand, ten thousand, fifty thousand. Would the beef carcasses increase in value? Not a penny. What would increase? The value of land. Note the difference, Mr. Lyon.

But here is an argument that is an argument. Answering the contention of Single Taxers that the imposition of the land tax will force land into use, he says:

"Holding land out of use may well lead to a conservation of capital."

Well, we guess it does. It also acts as a deterrent to the production of capital, since one way to produce capital (wealth) is the application of labor and capital to a lot held out of use.

When the community recognizes that -- a simple enough fact -- our fight is ended and and our victory is won.