G. H. DUNCAN WRITES ON PROBLEM OF TAXATION

The following article was written especially for the Crimson by G. H. Duncan, a member of the New Hampshire legislature, lecturer, and proponent of the "single tax", who is to speak at the Liberal Club at 7 o'clock on Wednesday evening.

One of the problems which is always confronting us is taxation. With the recent increases in public expenditures that problem is becoming more and more pressing. As an indication of how much attention is being paid to it in legislative circles it may be stated that during the years 1927-28, no less than twenty-two special investigating bodies were in operation in as many states in an attempt to find more equitable means of distributing the burden to the tax-paying public.

How unsatisfactory present methods are was shown at a recent meeting of Massachusetts assessors. It was reported in the press that when Commissioner Henry F. Long asked those assessors who had not violated the oath of office to stand, no one arose. In the financial comment in the Boston Herald of December 13, 1929, it was stated, referring to current selling of stocks to register losses for the reduction of federal income tax payments.--"The psychology of tax evasion is peculiar. Men scrupulously honest in money matters in general apparently feel no compunction about adopting any schemes which are legal which permit them to pay less taxes".

Yet community expenses and public enterprises must be paid for by some one. It is generally recognized that all routine and special public undertakings are intended to be of benefit to some part of the public; therefore each member of the public should contribute, on some basis, toward payment. But the assessor, under the law, asks, not--"How much have you benefited?", but "How much can you afford to pay?" This is a policy which we would not tolerate in our private affairs: and it is not strange that the application of that policy to us in our tax-paying relation arouses resentment.

Any public enterprise which is economically warranted must reflect in some direction the benefit which accrues thereby. And if we could only find that element in the public economy which reflects the benefit, and use that, and that only, as the basis of taxation, it seems that a large part of our tax difficulties might disappear. Let us examine, then, the elements in the public economy.

The prime factors in the production of wealth are natural resources--land the most common--and human labor. To these the common-sense of man has added a third factor, which is essential to our present scale of production, capital--that portion of wealth which is laid aside to assist in future production. Current wealth production must be apportioned, on some basis, to the three factors in the form of rent to land, wages to labor and interest to capital. And from rent, wages and interest, one or all, must come the current living expenses of individuals, current expenses of the community, paid for by taxes, and the reproduction of and additions to capital.

Now it is clearly evident that the value of the factors labor and capital must be the cost of reproduction, the number and amount of each being relatively limitless and that, both being relatively mobile, location has little to do with value. But Natural Resources (land) being incapable of reproduction and being immovable, their value depends entirely upon location; and that location--value, in turn, depends upon accessibility and desirability, affected in large part by the expenditure of public money for highways and other public improvements. So it is seen that if we could collect taxes on the basis of land values we probably could take much of the "trouble" out of taxes