Friday, April 07, 2006

The tax radicals of Mobile Bay

Today Fairhope, Alabama, is known for its shops and restaurants, its parks and pier, its beautiful shaded houses overlooking Mobile Bay. A century ago, however, Fairhope was known as an experiment in radical government.

Fairhope was founded by transplanted Iowans in 1894 as “a model community or colony, free from all forms of private monopoly,” according to the original charter. The founders were disciples of reformer Henry George, a Philadelphia native who never lived in Alabama. Beginning in the 1870s, George told anyone who would listen, and many who wouldn’t, that land was the source of all monopoly privilege, and should be taxed accordingly.

In fact, George argued that the land tax should be the only tax -- no income taxes, business taxes or sales taxes, just a single land tax, an annual rent paid by the land “owner” to the community for the privilege of using a plot of land for another year.

(Henry George had a lot of wacky notions. For example, he was one of the first Americans to call for the secret ballot, having the audacity to argue that whom you voted for was no one else’s business. Because George pointed to how well the secret ballot worked in Australia, his critics derided the secret ballot as “kangaroo voting.” Resistance was such that the secret ballot didn’t become law in all states until 1950, more than 50 years after George’s death.)

By creating the Fairhope Single Tax Corporation, the founders implemented George’s tax ideals as best they could. They felt they had a “fair hope” of success, hence the town’s name. They had no control, however, over all those other taxes that the county, state and federal governments still wanted someone to pay. The founders also couldn’t prevent outsiders from buying adjacent land and doing as they pleased with it.

So the Fairhope experiment never caught on, as its founders had fairly hoped. In fact, Alabama thumbs its nose at Henry George by taxing just about everything except land. (Timberland, for example, accounts for 71 percent of Alabama’s real estate but less than 2 percent of its property tax revenue.)

But the Fairhope Single Tax Corporation is still around, and it still owns 4,500 acres of land in and around Fairhope, issuing 99-year leases and occasionally donating tracts to the town for parks and such. The corporation’s office, which includes some historical exhibits, is at 336 Fairhope Ave., a few blocks west of U.S. 98, and is open 8 a.m. to 5 p.m. Monday through Friday. Phone: (334) 928-8162.


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