Of all the patterns of tax distribution, the progressive tax has generated the most controversy. In the case of the progressive tax, the conservative economists who oppose it have taken the offensive, for even its advocates must grudgingly admit that the progressive tax lowers incentives and productivity. Hence, the most ardent champions of the progressive tax on “equity” grounds admit that the degree and intensity of progression must be limited by considerations of productivity.

We have refuted elsewhere the various arguments that form part of the Henry Georgist edifice: the idea that “society” owns the land originally and that every new baby has a “right” to an aliquot part; the moral argument that an increase in the value of ground land is an “unearned increment” due to external causes; and the doctrine that “speculation” in sites wickedly withholds productive land from use.

A property tax is a tax levied on the value of property and hence on accumulated capital. There are many problems peculiar to property taxation. In the first place, the tax depends on an assessment of the value of property, and the rate of tax is applied to this assessed value. But since an actual sale of property has usually not taken place, there is no way for assessments to be made accurately. Since all assessments are arbitrary, the road is open for favoritism, collusion, and bribery in making them.

Although a tax on individual wealth has not been tried in practice, it offers an interesting topic for analysis. Such a tax would be imposed on individuals instead of on their property and would levy a certain percentage of their total net wealth, excluding liabilities. In its directness, it would be similar to the income tax and to Fisher’s proposed consumption tax. A tax of this kind would constitute a pure tax on capital, and would include in its grasp cash balances, which escape property taxation.