John T. Tetley

[Reprinted from The Gargoyle, October 1965]

The Henry George School is an educational institution, tax-exempt, and non-political. It cannot therefore endorse any political issue or candidate.

As an individual, I of course, might take any part I desire in politics, but since I am Director of the New Jersey school, I refrain from so doing. I feel that no matter how careful I am to clearly state I am acting as an individual, my statements and or actions are likely to be "associated" with the school. It goes without saying that others active with the school should be cautious so as not to involve the school in statements they may make.

It is the practice of the school in educational efforts, to seek and present facts, then encourage individuals to reach their own conclusions. In this article I merely wish to set forth a few facts in connection with the immediate political activity in New Jersey. This year a Governor is to be elected. The two major parties will offer candidates and the present Governor, Richard J. Hughes will seek re-election. State Senator Wayne Dumont, Jr., will oppose Hughes as the candidate of the other regular party. A third candidate is Robert Schlachter running as an independent.

One of the leading issues of the campaign is state finance and taxation. Hughes favors a sales tax but has stated he will "accept" an income tax, lottery, or other means of raising revenue. Dumont indicates he will promote income tax. Schlachter will run on the platform of no new taxes, declaring economy in state and local government would obviate the necessity of additional revenue.

The Henry George School of New Jersey in presenting the basic course in Fundamental Economic principles endeavors to indicate three most important factors:

  1. Distinction between natural resources and man-made products.
  2. Source of governmental revenue -- taxation a means of collecting revenue.
  3. Limited government, operated with economy and efficiency.

Action can be taken immediately for more efficient and economical local and state government, as well as Federal, This is both a short and a long term program but the start ought to be made.

It must be recognized that taxes are not sources of government revenue. Once this is understood, all forms of taxation -- sales, income, property; may be seen in their true perspective. It will be recognised that the portion of the general property, or real estate tax, which is assessed against land falls upon natural resources. The portion of this tax which is assessed against improvements (buildings) personal, and business-personal property falls upon man made products.

Economics indicates the only way to obtain material things is to produce them. Any interference with production -- taxes, or government controls and regulation -- tend to reduce production. Therefore, a part of the general property tax, sales and income taxes, definitely interfere with and lessen production.

The portion of the general property tax which falls upon land cannot decrease production but rather tends to increase it by lowering rents, selling price of land and discouraging holding land out of use for speculation. It follows that attention ought be given to the proper assessing of land for taxation. If this is done and all land is assessed at its true or market value as the Constitution of the State provides, an increase in revenue from this source should be immediately forthcoming.

The longer term program should aim at the reducing and eventually eliminating sales and income taxes, excise and other taxes, including those on improvements, personal and business-personal property. With efficient and economic operation of local, state and Federal Government and reduction of the activities of all government, the revenue which might be obtained from the one source (natural resources) might conceivably furnish the bulk if not the entire revenue needed for government.

"Economics" teaches us what might be expected. It is up to us to act politically in such manner as our knowledge of economics, taxation and government directs.