The single taxers point out in the first place that in a new and sparsely settled community the land has little or no value; but as the population grows by natural increase and by immigration the rent of land rises until in the great cities it reaches marvelous heights. The general increase in the demand for land is brought about by the increasing population which has produced the increased rental and this is capitalized in the enormous values of city land. But, say the single taxers, the rent of land and the value of land have increased whether the owner of the land has worked or slept. The rent and the value are produced by society and not by the owner, and therefore they belong, say the single taxers, to society and not to the individual; and society ought to appropriate them through taxation.

In the second place, say the single taxers, the single tax on land value looked at clearly from the fiscal point of view is an ideal tax. Most taxes can be shifted and are not ultimately borne by the persons who pay them in the first instance. Thus a tax on imported goods is paid to the government by the importers, but as a whole it is not likely to be borne ultimately by the importers. Depending upon market conditions, a large part of it is likely to be shifted to the ultimate consumer of the goods in the form of higher prices; some of it may be borne by the dealers who handle the goods while a part of it may be shifted back to the producer in the foreign country. But, say the single taxers, a tax on land values is paid by the owner of the land and is ultimately borne by the owner of the land. To illustrate: suppose that the rental of a tract of land is one thousand dollars a year and that the current rate of interest on safe investments is 5 per cent. This gives the tract of land a capital value of twenty thousand dollars. If now the government levies a tax of 50 per cent on the ground rent, taking one half of the thousand dollars for itself, the owner of the land who pays the tax, five hundred dollars a year in this instance, must bear it finally for the reason that he is unable to pass it on to his tenant in the form of higher rent. If the policy of collecting a 50 per cent tax on rent is generally recognized as a permanent governmental policy, the result will be that the capital value, the selling price of the land, will be cut in half. The land which would formerly sell for twenty thousand dollars will now sell for ten thousand dollars. If the government should increase the single tax on land values to 75 per cent of the rental, bringing in seven hundred and fifty dollars in this instance, and leaving two hundred and fifty dollars to the owner, and if this should be recognized as a permanent policy, the land value left in the hands of the owner would sink to five thousand dollars. The whole of the tax for all time to come would be borne by the present owner, for he would not be able to pass it on to the tenant since the tenant already pays the full economic rent and if the landlord attempted to make him pay more than the economic rent he would refuse to rent the land. If the landlord sold the land he would not be able to pass the tax on to the purchaser because the purchaser would be willing to pay only the capitalized rent which he would himself receive. Thus, if the purchaser would receive a net rental of only two hundred and fifty dollars he would be willing to pay for the right to receive this amount no more than the sum of money which when put at interest at the current rate would produce this amount. In the present case this would be five thousand dollars. It appears, therefore, that the owner of the land at the time the single tax policy is adopted as a permanent policy will have to bear the whole future burden of the tax.

As a third merit of the single tax, the single taxers urge that after the land is once sold the tax becomes burdenless to new purchasers for the reason that they have discounted the tax; that is, in purchasing the land they have capitalized only the part of the rental which they are to receive and not the part of the rental which is to go to the government. The former owners have been hit hard by the tax but no one will ever feel it again although it will continue indefinitely to furnish revenue to the government.

A fourth argument which the single taxers put forward is that with all other taxes than that on the land removed, industry would be free to develop and would not be hampered by the many vexatious tax restrictions under which it suffers at the present time.