In every city, old ramshackles and vacant lots are to be found even upon the leading thorofares. Side by side with magnificent modern office buildings are to be seen wooden shacks and tumble-down one or two storied buildings which have long survived their usefulness. They remain, however, because they enable the owner of the land to collect rent enough to pay the taxes, while he profits by the increase in the land values due to the growth of the community. Yet the man is not to blame, it is our system of taxation which is at fault.
Many examples of these things may be seen in Toronto, and for purpose of illustration we have selected the two northern corners of Bay and Richmond streets. On the west side is the beautiful building of the Foresters, a brick and stone structure eleven stories high and one of the finest in the city. On the east side the same area of land is occupied by seven buildings. Three of these are four storied brick warehouses assessed at $18,000, while the remaining buildings are of the dilapidated kind.
The assessed value of the land on which the Foresters Temple stands is $35,157 and the building is assessed for $450,000. The opposite corner about the same extent is assessed at $37,343 and the buildings at $23,000. The tax upon the land is therefore about the same, but the Foresters have to pay about $8,500 extra taxes every year because they expended nearly half a million dollars in employing labor and beautifying the city.
Can anything be more absurd? A land owner keeps a vacant lot unimproved, or allows old buildings to cumber the ground and we tax him very lightly, as tho he was worthy of all encouragement. But when any one has the enterprise, or shall we say the temerity, to erect a beautiful building, and thereby increases the accommodation for men, employing labor and adorning the city, we treat him as tho he was a bad citizen and levy a fine upon him. Call it what you will, a tax or an assessment, it is still a fine, tho unfortunately for him, it is collected not once but every year as long as the building remains valuable. The facts that he has increased the accomodation there is for business or provided homes for the people are not considered as extenuating circumstances. The fine is in proportion to the benefit he has conferred on society.
When will men learn that the way to encourage the creation of wealth, the erection of homes and. the carrying on of industries, is not to fine men according to the benefits they confer upon their fellows, but to exempt all these things from taxation and place the tax on the land value? It must be remembered that land values are created by the community, not by individual effort, and are therefore justly chargable with the expenses of the community.
Alan C. Thompson in The Canadian Single Taxer, reprinted in The American Cooperator (1903)