Land Reform, Not Tariffs: Why Government Should Be Funded by Unimproved Land Value Rather Than Import Taxes

Part I: Original Article

      Tariffs should not be increased; but rather, eliminated.
     For one, increased tariffs against other countries hurt American consumers; that's because the tariffs are paid by the domestic American company that imports the goods. Some people reason that importers like that will pass costs on to the foreign company that exports the goods; while that is true, costs are also passed on to the people who buy the imported goods (i.e., American consumers).
     Secondly, general tariffs on the importation of goods, do not punish foreign exploitation of labor as they are intended. If we, in America, want to punish the exploitation of foreign labor by foreign countries and companies, then we should consider "labor tariffs", which do more to achieve what advocates of tariffs sometimes claim to want. Yet nobody is using the phrase "labor tariffs" at all.

     But if our goal is to keep low-quality products out, then we should impose quality controls, and perhaps higher fees (if necessary) to pay for more thorough inspections.

     Ordinary tariffs (i.e., taxes on the importation of goods) don't solve either exploitation of workers or low-quality goods. They only make low-quality goods more expensive for American consumers to buy and for American importers to import.

     Even if tariffs could be proven to be a good or necessary thing, to increase tariffs before increasing domestic production would be to put the cart before the horse.
     That's because those tariffs usually trigger retaliatory tariffs on U.S. goods by foreign countries, resulting in more retaliatory tariffs by the U.S., and so on and so on; resulting in an inflationary spiral (that is, more expensive goods for everyone, at home as well as abroad).

     And, since domestic production is down (which is the reason people want tariffs in the first place), that will leave Americans prematurely starved for low-cost goods imported from China, and in desperate need to start ramping-up domestic production again, as quickly as possible.

     Granted, domestic production is probably about to go up (or so the Trump Administration thinks). But others - such as myself - are not so sure about how it is that production is going to go up, given other ongoing problems.
     For one, the Trump Administration might be deporting many undocumented immigrants. How many workers will be deported in the process? And how will that affect our labor force's ability to produce?

     Additionally, there is an ongoing drought in the Western United States. It's possible that America's ability to harvest a sufficiently abundant amount of food in the few coming years - and other problems related to the misallocation of land and water - could cause deficiencies in feeding the American people (and in the countries where people buy American-made food).

     It's possible that the Trump Administration is overestimating America's capacity to start producing again quickly.

     Before considering increasing tariffs, we should simply do what tariffs intend to achieve; that is, we should increase production at home.

     But we should do it without giving into the kinds of financial fraud and environmental devastation and labor exploitation that the Republicans and the neoliberal Democrats tolerate (and sometimes even spearhead).
     And we should also do it without resorting to tried-and-failed old methods of sourcing tax revenue which unduly punish productivity and make goods unnecessarily expensive.

     That is why we need Georgism, the "Single Tax" on unimproved land value.

     This tax on non-improvement of land, should include taxes on the owners of abandoned construction projects, large swaths of land, land rendered unusable for others due to blight or hazards, and land speculation by large banks and land developers.

     Land Value Taxation - and split-value taxation (wherein buildings are taxed at a lower rate than land) - would allow ordinary people to engage in untaxed (or minimally taxed) production, in their homes and garages and on their front lawns. It would also help reduce landlessness for the average person.

     These taxes will make land cheaper overall. This will make it cheaper to mix labor and capital upon the land, for productive use, and it will end and replace taxes on production (including tariffs and sales taxes).

     However much the Trump Administration brings production back from abroad - and whether the administration sticks to their tariff plans or not - there is plenty that we can do, here at home, to help bring back production.

     Land Value Taxation will allow us to do this; by simplifying and streamlining our tax code, so as to stop punishing productivity by the average property owner (while making it easier and cheaper for the average tenant to become a property owner).

     Increasing property ownership by American residents, will also help prevent something that many Americans (especially those living in the Western United States) fear; that too much land in the continental U.S. could be sold to Chinese property owners, developers, and/or speculators.

Part II: Addendum

     Below are two images - that I did not create - which I have seen, circulating on the internet, since publishing the original article above.
     The first image illustrates my point, as to why tariffs won't work; while the second image shows why tariffs would not be sufficient to fund government.

Written on February 2nd, 2025

Edited and expanded on April 14th, 2025

Addendum added on May 22nd, 2025

States Could Experiment with Export and Resource Backed Currencies

Written on September 15^th, 2016

 

Edited and Expanded on October 4^th, 2016

 

            Balancing government budgets, instituting Georgist taxation, and legalizing competing currencies, could potentiate new ways to back legal currencies.

Imagine that community land trusts flourish; that state and local governments had balanced budgets, based their revenue sources solely on user fees, voluntary contributions, and a Land Value Tax; and that they governments establish citizens' dividends and residents' dividends and permanent funds, funded by exports and fees on natural resources.

If each state were to produce its own official state currency, within its own boundaries, controlled by a state public bank, based on and backed by its chief export, it would provide a local alternative to the fiat paper dollar, and to gold and silver.

 

The three states whose chief export is gold - Utah, Nevada, and Massachusetts - would have only gold, silver, and paper dollars as their official legal currencies; unless they were to produce their own state currencies to compete with the $10 U.S. Golden Eagle, or legalize Bitcoin, or undertake some other measure. Perhaps two or all three of these states would adopt a single gold currency.

Four states - Illinois, Michigan, New Jersey, and Texas - export gasoline more than anything else. North Dakota exports crude oil the most; and Montana, West Virginia, and Pennsylvania claim coal as their biggest export. Unless these eight states were to join into a single currency backed by fuel and energy exports, we would likely see them adopt "Gas Dollars", "Crude Oil Dollars", and "Coal Dollars". Gallon tanks of gas might even become media of exchange.

Six states claim food products as their chief exports; they might join into a united currency - or currency composite - based on the average of the values of food exports across all six member states. Colorado and Nebraska would have a "Beef Dollar"; South Dakota and Virginia would have a "Soy Dollar"; Iowa would have a "Corn Dollar"; Maine would have a “Lobster Dollar”; and Idaho would have a “Potato Dollar”. Well-preserved potato, corn, and soy products - as well as beef jerky - might become media of exchange under such systems.

Eighteen states export vehicles more than any other good. Alabama, Maryland, and South Carolina would have a "Car Dollar"; while Michigan and Missouri would have a "Truck Dollar". States adopting an "Airplane Dollar" include Arkansas, Arizona, California, Connecticut, Florida, Georgia, Hawaii, Kansas, Kentucky, Louisiana, Ohio, Oklahoma, North Carolina, and Washington State.

New Hampshire, New Mexico, Oregon, and Vermont would have an "Electronics Dollar", exporting electronic devices more than anything else. Delaware, Indiana, Tennessee might have a "Medicine Dollar", chiefly exporting medical goods.

Other states would take unique approaches to establishing their own currencies, having unique chief exports. We would likely see such things as the "Alaska Zinc Dollar", the “Minnesota Needle Dollar”, the “New York Diamond Dollar”, the “Rhode Island Metal Waste Dollar”, and the “Wyoming Soda Ash Dollar”. Finally, the District of Columbia - exporting arms and armaments - would adopt a “D.C. Arms Dollar”.

 

Of course, the downside to each state having its own currency backed by its chief export, would be that states would be largely incapable of avoiding promoting their own industries; and this would interfere with free trade. States and the federal government subsidize - and grant other favors and protections to domestic industries - too much as it is; and such currencies would only embolden government to put more taxpayer money into increasing exports.

The federal government would be obligated to get involved, given its role in ensuring regular, uninhibited, uninterrupted flow of interstate commerce in such goods. This is especially so, if states were to attempt to tax the same goods they back their currencies on, when those goods come from out of state.

Truth be told, if every state subsidized its own chief export in order to keep its state currency strong, then the states couldn't rightfully blame each other without being hypocrites. But on the other hand, the federal government doesn't hold states accountable for favoring themselves or for interfering with free trade, and that rationale ought to stop.

     Another thing to consider is whether states should be encouraged to back their currencies on - instead of their chief exports - their chief natural resources (by whatever measure). This might ultimately prove to be better for the economy and for the environment, because when a state's chief natural resource is a mineral resource or an agricultural product - like wood, fiber, oil, coal, or gasoline - it might be less hazardous to the environment, and more popular among the voting populace, that the real value of the product lies in leaving it in the ground.