The Freeman 1972 - The Ludwig von Mises Institute

106 THE FREEMAN Februarysmall plots and redistributingthese among the peasants. Becausethere are always fewer such workableparcels than families, and because,though each parcel of landmay be of the same nominal acreage,each has a different nature,fertility, location, and degree ofdevelopment (with or withoutclearance, grading, irrigation,roads, buildings, and the like),each must have a different marketvalue. The·distribution of land cannever be universal and can neverbe "fair"; it must necessarily favora selected group, and somemore than others within thatgroup.But apart from all this, such ameasure always reduces efficiencyand production. From the momentit is proposed that property beseized, its owners "mine" its fertilityand refuse to invest anotherdollar in it, and some may noteven raise another crop. It doesnot pay to use modern equipmenton small farms, and in any casethe owners are unlikely to havethe necessary capital. "Land reform"of this type is an impoverishmentmeasure.The Henry George scheme of a100 per cent "single tax" onground rent would also discouragethe most productive utilization ofland and sites, and adversely affectgeneral economic development.But to explain adequatelywhy this is so would require solengthy an exposition that I mustrefer the interested reader to theexcellent analyses that have alreadybeen made by Rothbard,Knight, and others. 4Progressive TaxationAmong the' "advanced" nationsof the West, however, the mostfrequent contemporary method ofredistributing income and wealthis through progressive income andinheritance taxes. These now commonlyrise to near-confiscatorylevels. A recent compilation 5 comparingthe highest marginal income-taxrates in fifteen countriesyielded the following results:Switzerland 8 per cent, Norway50, Denmark 53, West Germany55, Sweden 65, Belgium 66, Australia68, Austria 69, Netherlands71, Japan 75, France 76, UnitedStates 77, Canada 82, UnitedKingdom 91, and Italy 95 per cent.Two main points may be madeabout these hyper-rates: (1) theyare counter-productive even inraising revenues, and (2) they dohurt not only the rich but the poor,and tend to make them poorer.4 Murray C. Rothbard, Power and Market:Government and the Economy (MenloPark: Institute for Humane Studies,Inc., 1970), pp. 91-100. Frank H. Knight,"The Fallacies in the 'Single Tax'," TheFreeman, Aug. 10, 1953.5 First National City Bank of NewYork.