From an 1899 newspaper:
The Scottish Liberal Association has just issued the following as a fighting leaflet, written by Mr. Edwin Adam. M. A., vice-president of the Scottish Land Restoration Union:
Why are house rents so high, and the accommodation so bad? Mr. Joseph Chamberlain told us that a good three-roomed house could be built for £150, but that, unfortunately, did not include the cost of the site. It remains a "castle in the air.” The Edinburgh Town Council can borrow money at 2½ percent, and yet it makes a loss in giving one-roomed houses at £6 10s a year.
Because the cost of the land is so enormous. This is the opinion of the Royal Commission on the Housing of the Working Classes. Building and land in and around Edinburgh is feued from £40 to £200 an acre, and sells at from £1,200 to £6,000 an acre. Eight thousand pounds has just been refused for seventy yards of ground which the city of Glasgow wished to acquire for widening the corner of Buchanan street.
The remedy is to put a tax on the land value, whether the owner allows that land to be used or not.
Taxation of land values means putting a tax on the value of the land apart from the value of any improvement placed upon the land by the occupier’s industry. It would put the tax on the site, and not on the house built upon it.
The present system of local rating puts the tax upon the improvement— the better a man uses the land the more tax he has to pay. The less he uses the land, the lower the use he makes, or allows other to make of the land, the less he contributes to the public expenditure. This enables him to hold it idle, and wait for the rise in its value, which will result from the continued growth and expenditure of the community, to which he has contributed nothing.
We wish better houses and more houses. The present system permits the man who refuses to allow building on his ground to go free: puts the rates on the man who builds. This is unjust.
When Jenner's shop in Princes street, Edinburgh, was burnt down, the site was worth £100,000. Had the owner resolved not to rebuild, he would have paid no rates, but the value of the site would have continued to rise, because of the continued increase of population and public expenditure. He, however, not only rebuilt, but spent some £95,000 in making the building an ornament to the town. He is therefore rated on £7,000, which represents the annual value both of the site and of the £95,000 spent on the building. The new system would rate him on the value of the site, say on £4,000 a year, whether he rebuilt or not, and would leave him to enjoy all the value of the building.
Let owners of land pay their rates on what they say their land is worth. This would compel them either to use it, or let others use it, at its present market value.
Would a slum proprietor be able to demand a fancy price for his houses which have been closed by the sanitary authority, if he had to pay rates on that fancy price?
Would the Duke of Buccleuch have been able to hold out for £120,000 for 100 acres of almost barren foreshore and a flooded-out quarry, which Edinburgh required for gas works, if he had to pay rates for that, and all the similar land he holds on a value like that?
Would sites for the Usher Hall in Edinburgh be quoted at fancy figures if the owners had to pay rates on what they say is the selling value of their property? Why should they be allowed to name one value for rating, and an enormously greater for selling? The North British Railway Company refused £65,000 for the Canal Basin. That stands in the valuation roll at a rental, which represents a capital value of only £30,000.
Taxation of land values is a just system of taxation. It puts the burden of public expenditure on those who ultimately benefit by that expenditure.
It merely takes for the municipality a portion of that value which is created by the work of the municipality.
It would discourage idleness among land owners, and force them to use the land or let others use it, at its present market value.
It would not, like the present system, only rate a man according as he used and improved the land, but would leave to every man the full value of his own improvement.
It would encourage building. More houses and better houses would be built. It would therefore lower rents.
We should have land owners asking builders to come and build; they would be advertising for laborers, and not the laborers be begging for employment. It would therefore raise wages, and the conditions of labor would be improved. Monopoly would be taxed and industry would be free.
reprinted in the Oakland Tribune, 1899-03-25, in Pomeroy's single tax column
Comments