Taxation of Business
[Reprinted from Land and Freedom,
It has become the habit, if not the fashion, to say that "industry
is burdened with taxes." This expression is not in accordance
with actual fact. Industries are merely collectors for the Government,
and get paid for collecting. Taxes on secondary industries are part in
the cost of production and go into the price of goods and service with
the regular profit added to the whole. At every stopping place in the
criss-cross course of material and unfinished goods, at every line of
transport, taxes are added on top of taxes with profit as cost of
collection, until reaching the consuming public which buys and pays
for more taxes than goods. This is the first lesson that should be
taught in schools of social economy. When the consuming public tumbles
to the trick that is being played on them then look for reforms to
commence, and the new generation, once started, will not stop halfway.
That the increased price reduces consumption, thus curtailing
production and employment, is incidental, demand governing supply.
A very large part of the taxes thus collected are wasted in support
of a horde of useless and troublesome political office cats, most of
whom had better be discarded and left to find more useful pursuits for
Taxes collected on labor and industry are substitutes for revenue the
community earns, and its government does not get, thus shifting the
rent into the price of goods. To this extent Mr. E. Jorgensen is
perfectly right, and it does not require a whole book, nor two of
them, to tell and explain that much.
One other expression that runs outside reason is, "Take the
whole rental value of land." In the first place, this is
impossible; second, even if it could, it ought not to be done.
Speculation should, of course, be taxed out; land held idle or poorly
used should yield its share, pay or quit and leave the chance for
better men. But just as a man is making improvements on his land does
so on the assumption that it will become worth more to him than its
cost, so must public improvements and services be of higher value to
the payer than the price asked as otherwise all incentive to social
progress would be lost, at least on their part.