Is the Taxation of Income Socialism?

Joseph Thompson

[An excerpt, "No Sir! No Socialism!" reprinted from an undated pamphlet,
Simple Talks on Taxation, published by the author]

...Seems to me something ought to be done about this tax business, Bob. What do you think?
... What ought to be done, Harry, is for the public to collect what it creates. What really belongs to it.
... What do you mean -- "belongs to it"?
...I mean the public should collect the land rental and nothing else. ...And not tax anything else! Why that wouldn't be fair! Doesn't the public create the value of everything?
...Sure. But the public creates land value by just being there. Everything else takes work to give it value.
... Everything else?
... Yeah. Take your necktie. You can easily list more than a hundred people that had something to do with producing that tie. The designer, the weaver, the teamster, the people that made the loom. Just make a list. But there isn't a living soul that can take credit, or ought to be paid, for making the face of the globe.
... But what about the landlord? He paid good money for the land, didn't he?
... No. Not exactly for the land. He bought the privilege of location among people. He, or his forebears, may have paid for the title, but the people created the value, so he bought the privilege of collecting what they create.
... But he owns it, doesn't he?
... No. Not the way a man owns a wheelbarrow or a violin. You can only say that he has acquired the title.
... What's the difference?
... Well, what they own cost something. What the landlord owns didn't cost anything.
... Wha'd' you mean! Didn't cost anything?
... All right What did it cost?
... Sa-ay! He probably paid plenty for it!
... Did he pay somebody to make it?
... Of course not. It was always there.
... If he paid plenty for it, it must have value.
... It sure has!
... Who made the value?
... I don't know. But land keeps going up.
...Well, wherever there's people that want land.
...Then we can say that while people don't make the land, they make, or create its value, can't we?
...I s'pose so.
...Shouldn't the people be paid for what they create?
...Yeah. But the landlord owns the land, all right.
... So he has the right to hold up, or charge, other people who want to use it.
... Sure.
...He has the right to collect an income that is made by the people?
... Then, when he collects what the people make, the people have to take a big chunk out of what you make and what I make, and out of what our capital earns, to replace the income they create and he collects.
... Why not? He bought the title to the land, didn't he?
... From who?
... From some other feller, I s'pose.
... And who'd the other feller buy it from?
...Sa-ay! What're you driving at? How should I know?
... I'm driving at one thing you should know -- and that is that the first feller who sold the land title didn't pay anything for it because it was there and it didn't cost anything to make it As you said a minute ago, the landlord bought die title. That's one way that land is different from wheelbarrows and violins. You can carry them away, but a land title is only an evidence that he has sole right of occupancy, or to charge for occupancy, and that's not really a right.
... What do you mean -- it isn't a right?
... I mean that you could pay for some power or condition that is an artificial right and not a real one.
... What would it be if it wasn't a right?
... Well, in this case, the power to collect what the public creates would be better described as a privilege.
... What's the difference?
... Don't you see any?
... No.
...The difference is that a right is something that is a part of yourself. You have a right to the possession of your own body. You should have a right to whatever you make, either the article itself or the money paid to you for your work. A privilege is something artificial, something created by legal enactment.
...Well, if it's created by law, that ought to satisfy you.
... I didn't say "law," I said "Legal enactment."
...What's the difference?
...To me, a law is something that -- Well, let's say, that couldn't be repealed. Like the law of gravity or the Mendelian law of heredity. Like the physical law under which water, by certain temperature variations, turns to steam, fluid or ice. Then there are things that seem like laws, Gresham's for example, "bad money drives out good money." But most of the rulings that we call "laws" ought to be called nothing more than "legal enactments." And any man's "right" to collect land rental comes from a damn poor "law."
...What's poor about it?
... What's poor is that he paid some man who had nothing to do with its being there, for the "right" to tell you and me to "keep the hell out of here!", and if we say "Why should we? We create its value," he can say "Well, you go on creating it and I'll go on collecting it, so get out!" And, damn fools that we are, we'd have to get out. Now if he was paying the land rental into the public treasury, where you and I would get the benefit of it, he'd have a real right He could say "I've paid you fellers what you have made it worth, and as long as I keep on paying, the place is mine," and we'd have to agree and say "That's fair enough, Mister, you're right" But, as it is, he's bought a privilege.
... Well, what's wrong with a privilege?
... Oh, nothing. Nothing at all if you're on the collecting end, but I should think that you, as a good American, would be the first to say that no man should have the legal power to live at your expense.
... Wha-d-yuh mean? At my expense?
...If you pay taxes because he doesn't -- If you pay him just to get out of your way -- he's living at your expense, and that's a privilege -- in my book.
... Well, I don't look at it that way. It sounds like Socialism to me. I think we all ought to pay taxes and sump-m oughter be done. But no Socialism! I hate Socialism! But, after all, the hell with worrying about that. How'd the game go? I hear the Giants lost again.
... I don't know. I don't follow the ball games.
You don't? Gee! That sounds kind of un-American to me. Well, so long, Bob.
... So long, Harry. It's nice to think that the Income Tax isn't Socialistic.