Sec. 8. #Federal taxation of merchandise and acts in commerce.# Tariff and internal revenue duties constitute the two chief revenues of the federal government.  Both of these are mainly taxes on wealth.  Unlike the general property taxes they are not levied upon the main body of wealth held in possession, but almost entirely upon articles of merchandise and upon acts in course of trade.  Stamps on receipts, checks, deeds, bills of sale, and licenses on the sale of liquor and tobacco are taxes on business acts which are necessary to the acquisition, use, or expenditure of wealth.  Goods imported are taxed at the time of entering the country; domestic products such as cigars, spirituous or malt liquors, playing cards, and (at times) matches, pig iron, and other products, are taxed usually at the time of exit from the factory.  It has already been shown that when the tariff duty prevents the importation of foreign goods and by raising the price encourages domestic manufacture of the article, there is virtually taxation of the consumer to subsidize the private manufacturer.  A system of properly adjusted compensatory duties (tariffs and internal duties combined) which would prevent tariff duties from having any prohibitive effect whatever could, in a great country like ours, be made to produce any revenues desired.  Such a system, combined with the federal income tax, seems destined to be the chief dependence for the national government.

Sec. 9. #Proposal of the single tax on land values.# Besides the general property tax there are found in the country as a whole a large number of special property taxes.  Some of these have been introduced as substitutes for the general property tax; such is the special taxation (above referred to) of mortgages, and bonds.  Other special property taxes have been introduced because they were believed to be good in themselves; such are special franchise taxes on corporations and some kinds of taxes on land.

The special taxation of land, or of land values, has been strongly urged by Henry George and his followers since the publication of the remarkable book “Progress and Poverty” in 1879.  The doctrine there set forth is that the state should “appropriate land rent by taxation,” should “tax land values, irrespective of improvements.”  It is maintained that “a single tax” of this kind would be quite sufficient for all the purposes of government.  The main arguments adduced for this plan may be reduced to three propositions:  first, private property in land is essentially unjust, because land is made by nature, not by men; second, the plan would make assessment simple and certain by limiting it to the unimproved land, and making unnecessary the more difficult assessment both of tangible improvements and of intangible personal property; and third, it would work a marvelous reform in social conditions, abolishing poverty and greatly increasing production.