At 139 square miles, Detroit is more than a thousand times bigger than the tiny north Jersey enclave of Free Acres, which straddles the line between Union and Somerset counties. But in an effort to rejuvenate his much-maligned city, Detroit Mayor Mike Duggan has proposed a tax system with roots in the same intellectual soil that spawned Free Acres more than a century ago—the economic theories of Henry George, who died in 1897.

Perhaps the most surprising thing I learned while reporting CivicStory’s new piece on Free Acres is that the economic theories that inspired its founding in 1910 are far from dead: Although intracommunity tensions forced Free Acres to largely abandon its Georgist tax structure in the mid-1930s, some modern-day policymakers believe that George’s 19th-century ideas can help solve 21st-century problems.

George proposed a so-called “single tax”--a tax on land alone, rather than on the homes and businesses that occupy it—as a cure for inequities created by rapid economic growth. Contemporary economists are more likely to talk about a “split-rate tax,” which permits taxation on buildings but allows communities to tax land at a higher rate.

When land and buildings are taxed at the same rate, as New Jersey and most other states require, economic incentives are skewed, Georgists argue: Fixing up a house raises your tax bill, whereas leaving prime real estate vacant—and thereby depriving the surrounding community of the jobs and tax revenue that development could bring--costs little. A land value tax recalibrates those perverse incentives, encouraging urban development and, at least in theory, discouraging suburban sprawl by making cities more attractive places to build.

In Pennsylvania, which has permitted split-rate taxation for more than a century, the decline of the steel industry pointed up the usefulness of George’s ideas, says Joshua Vincent, executive director of the Center for the Study of Economics, a Georgist research foundation based in Collingswood, N.J. “When the steel mill goes under, the owner blows up the building, and their taxes go down,” Vincent says. “To have the raw land and its inherent value taxed--the only way you can do it is to have a land value tax.”

Detroit’s split-rate tax proposal stalled in the Michigan legislature last month, but Mayor Duggan still hopes to get it on the city’s November 2024 ballot—114 years after Henry George’s ideas inspired the founding of a utopian enclave in New Jersey.

Deborah Yaffe is a freelance writer based in Princeton Junction, N.J. She worked as a newspaper reporter in New Jersey and California for 14 years and is the author of two books: “Other People’s Children: The Battle for Justice and Equality in New Jersey’s Schools” (Rivergate Books, 2007) and “Among the Janeites: A Journey Through the World of Jane Austen Fandom” (Mariner Books, 2013).

Yaffe is the humanities reporter for an incubation grant funded in part by the New Jersey Council for the Humanities and the National Endowment for the Humanities.

New Relevance for an Old Tax Plan