1. Start-up (1879-1886)

Henry George publishes Progress and Poverty in 1879, it becomes a great success, and it catches the eye of attorney Thomas Shearman, who suggests the “single tax” label. George approves, and one of the most important partnerships in U.S. tax law history is formed.

2. Clarification (1886-1890)

George runs for mayor of New York City in 1886 to gain exposure for his “single tax” movement. He loses the election, but learns that his movement is politically viable, plus he learns of a few key misconceptions about his tax, which he clarifies by launching a new weekly newspaper, The Standard, in January 1887. George states that The Standard’s purpose of clarifying misconceptions had been served by 1890, but that he let the newspaper continue until 1892 for the benefit of others.

3. National Appeal (1890-1895)

George establishes the 1890 Platform of the Single Tax League of the United States in September 1890 during the first national Georgist convention, a three-day event in Coopers Union, New York. In his weekly newspaper, The Standard, George also demands that any group identifying as “Georgist” adhere to the 1890 Platform, or he will not list the organization or club in the back pages of his newspaper. In 1893 Shearman proposes a national Georgist income tax entitled “A Just and Practicable Income Tax” before the Ways and Means Subcommittee on Internal Revenue in Washington, D.C., but the tax is rejected. Judge Maguire and six Georgist Congressmen add an income tax amendment targeting landlords to the 1894 tariff Act, but the entire tax law is struck down as unconstitutional by the Supreme Court in Pollock v. Farmers’ Loan (1895).

4. Mandatory Handicapped (1895-1913)

Both income tax appeals being rejected, Shearman and George propose a tax on imputed land incomes using state and local property tax laws. George dies in 1897 and Shearman in 1900, but the tax on imputed land incomes continues to be advocated under the leadership of Charles Fillebrown, Joseph Fels, and others.

5. Voluntary Handicapped (1913-present)

The 16th Amendment removes the impediment caused by Judge Maguire and company in the Pollock case of 1895, but the movement continues to advocate a tax on imputed land incomes. A few years after the 16th Amendment is ratified the Supreme Court rules that a federal tax on imputed land income is an impermissible property tax, but that a tax on actual or realized land income is supported by the 16th Amendment. Nevertheless, the Georgist movement continues to advocate the tax on imputed land incomes, using state and local property tax laws.

Notes:

The last 10-20 seconds of this 4-minute O'Donnell clip provides some background about the transition from Stage 2 (the clarification stage) of the Georgist movement, to Stage 3 (the national appeal stage) mentioned above:

In the progressive era (the early 1900's) most people understood the two different kinds of income taxes, one where income is used to measure the benefit enjoyed by the taxpayer who holds a government-granted privilege (i.e., "income not derived from property") vs. where the actual property/land gain is the target of the tax (i.e., "income derived from property")

Reaching Stage 5 was a great achievement for the Georgist movement because it gained the right to tax what we today call "capital gains," but it was a bitter-sweet victory. Yes, Georgists won the right to tax the landlords and bankers they were targeting in Stage 3, but what I call "the great conflation" was soon to follow.

In Eisner v. Macomber (1920) the Supreme Court would explain why Georgists didn't have the right to tax imputed land incomes, but that was a relatively minor problem, which simply presented a timing issue. The more important issue was that now, after the 16th Amendment, Congress had the taxing powers it didn't have in Pollock v. Farmers' Loan (1895).

The much greater problem, which threw the entire movement into confusion, was conflating land (the natural universe) and bank bills (Federal Reserve notes) with "capital," neither of which would have been remotely acceptable to George.

Listen to how the 1920 Supreme Court, while denying the power to tax imputed income, describes "income" and "capital," keeping in mind that whenever the Court mentions the word "capital" it is also referring to "land":

"Income may be defined as the gain derived from capital, from labor, or from both combined, provided it be understood to include profit gained through a sale or conversion of capital assets . . .Here we have the essential matter: not a gain accruing to capital; not a growth or increment of value in the investment; but a gain, a profit, something of exchangeable value, however invested or employed, and coming in, being 'derived'---that is, received or drawn by the recipient (the taxpayer) for his separate use, benefit and disposal---that is income derived from property. Nothing else answers the description." Eisner v. Macomber (1920)

The "Pollock income tax" is the one caused by Henry George's movement, and it was put in play right after the 16th Amendment was ratified. This is the income tax which targets unearned gains, no matter what currency is used, and even if no currency is used (i.e., barter). Yes, this tax permits the tax on the unearned gain, and does not cause a direct property tax on the underlying property (which is usually land).

Prior to ratification of the 16th Amendment, however, there were already two income taxes in play, the currency-regulating "Springer income tax" on income received in national bank notes (and the Federal Reserve note), and the "Stone Tracy income tax" on corporate privileges. Both of these income taxes are levied because of the federal privileges conferred, and the income is used to measure the benefit enjoyed while exercising the privilege.

Stage 3 (the national period) was the high-water mark for the Georgist movement. George couldn't ask for anything more than political viability and national enforcement of his "single tax," which meant that his tax could also be enforced globally in a uniform manner. To not emphasize this critical Georgist stage would be a disservice to George, and it's even worse to totally ignore it, as though George preferred trying to tax imputed income using state and local property tax laws.

This is a screen shot from the 1894 tariff/income tax to which Georgists added an income tax on landlord unearned rents and gains. This Section 27 of the Act is what caused the Supreme Court to strike down the entire tax, which ended the Georgist national appeal (see Stage 3 above) and made the 16th Amendment necessary (or else only wages could be taxed as income):

To understand the Georgist movement, it's important to understand the difference between a general income tax (which we have now) vs. a special Georgist income tax which only targets unearned incomes. Therefore, if any Georgist leaders are condemning ALL income taxes, they have an agenda which does not properly reflect the historical Georgist movement.

Here's what George's lawyer, Shearman, stated in his book, Natural Taxation (1898), after the Supreme Court ended the Georgist national appeal in April 1895:

"The GENERAL income tax, upon earnings and profits as well as upon fixed property, stands condemned by universal experience, as an incentive to perjury, a premium upon unproductive land, a special burden upon the honest, the simple, the widow, and the orphan. Nature shuts this door also in the face of honest men." Thomas G. Shearman, Natural Taxation (1898), page 45. (emphasis added)

Before explaining the need for the land-only property tax that most Georgists are still seeking today, Shearman (who died in 1900) briefly explains the situation after the Supreme Court ruled against their landlord income taxes in Pollock v. Farmers' Loan (1895):

"The recent judgment of the Supreme Court [in Pollock v. Farmers' Loan (1895)], exempting rents from income tax and casting doubt upon the whole system, will probably stir up a movement for such an amendment [i.e., the 16th] . . . The taxation of incomes in general, while rents are entirely untaxed, is a monstrous anomaly, which will certainly be remedied at a comparatively early day [i.e., the 16th (1913)]." Thomas G. Shearman, Natural Taxation (1898), page 42

And here it comes, the foundation of the land-only property tax on imputed incomes, which again, was supposed to be shelved right after the 16th Amendment was ratified in 1913:

"But as the purpose of the present inquiry is to ascertain what ought to be done . . . an income tax, levied exclusively at the sources of income, could be made to reach, with great approximation to equality, all rents, dividends, corporate payments of interest, and perhaps mortgage interest . . . but no other incomes ought to be taxed." Thomas G. Shearman, Natural Taxation (1898), pages 43-44.

After the devastating defeat in Pollock v. Farmers' Loan (1895), Shearman and George seek alternatives, and being firmly against all tariffs, sales taxes, and other impediments to free trade, recognize only 3 taxes which don't get passed onto consumers: (1) the recently disabled income tax, (2) succession taxes, which today refers to the estate/gift tax; and (3) general property taxes, levied at the state and local levels.

Shearman states on pages 40-41:

"As the only forms [of non-trade taxes] now in use, by means of which an adequate public revenue could be obtained, are an Income Tax, a Succession Tax, and . . . a General Property Tax, our attention may as well be confined to these taxes."

Again, their solution is to tax the unearned (imputed) income gains from land, not by using an income tax at the federal level (which was denied them in 1895), but by using state and local property tax laws.

In light of the Georgist history surrounding special vs. general income taxes during the national period (1890-1895), it would be doing a great disservice to George to hold that today's takers of actual/realized unearned income should be let off the hook, just because imputed income cannot be taxed at the federal level. It defies logic and reason that those professing to be Georgist would allow egregious global privatization of unearned income simply because it cannot be taxed as imputed income at the state and local level.

If one identifies as a Georgist who recognizes all 5 stages of the Georgist movement, then one has to accept that imputed income cannot be taxed, however, that does not mean that unearned income should generally go untaxed, but that every possible opportunity to cause "realization" of income should be taken advantage of.

In short, Georgists who want to see Georgism enforceable on a global scale must work to repeal any loopholes or exemptions which prevent income from being realized, and therefore taxable, and there are a few key ones.