Joshua Cutler (Boise State; Google Scholar), A Hebrew Republic of Taxation? Henry George's Single Tax, Hebraic Law, and Unearned Income, 57 Idaho L. Rev. 227 (2021):
Can millennia-old religious ideas offer insights into modern tax law? I explore this question through the hugely popular, yet largely forgotten, tax movement of political economist Henry George. Seeking to explain why poverty always seemed to increase along with progress, George proposed that, as societies advanced, land owners were able to capture an increasing share of unearned wealth. To remedy this, George proposed a “Single Tax” on the unearned income from land. George’s tax movement gained popularity largely because it was founded on widely-held ideas originating in the Hebrew Bible. Yet, the religious foundation of George’s tax movement has been largely unexplored. I trace key elements of George’s theories to ideas and institutions originating in the Hebrew Bible. In Hebraic thought, because mankind did not create the earth, no person can claim full ownership of the land or its wealth. This principle was embodied in the Hebrew Bible’s laws mandating an equal distribution of land and institutions to maintain this distribution over time. Centuries before George, medieval rabbis had already used these laws to derive a flexible, effective taxing power. Further demonstrating their durability and cross-cultural appeal, these Hebraic institutions would come to have a strong influence on European and American political thought through an intellectual tradition known as the “Hebrew Republic.” Henry George’s ideas can be seen as an unwitting revival of this tradition.
While the Single Tax itself was never implemented, George’s movement illustrates popular and powerful ideas that can still be applied to modern tax law. As an example, I focus on the theological idea of unearned income, which was key to George’s movement and to the Hebraic institutions. While distinctions between earned and unearned income are prevalent throughout the current tax code, they are confused and complex. A religious understanding of unearned income, based in the Hebraic concepts used by Henry George, potentially offers a more coherent rationale for distinguishing between earned and unearned income. I discuss how this might work in two specific areas of the tax code: the passive activity loss limitations and the special use valuation of family farms under Section 2032A.
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