LOCAL AND IMPERIAL TAXATION.
rTo THE EDITOR OF THE " SPECTATOR.'1 SIR,—I crave permission to offer a few remarks on the letter of your correspondent, "C. A.," in your last number, on the above subject. I certainly had not overlooked the fact that local rates are paid by railway and trading Companies, but only so far as they occupy land or houses, and these rates are not assessed, as in the case of land, on the gross income derived from their occupation, but only on the assessed value of the real property to occupied. For instance, the great banks and mercantile houses in London only pay local rates on the house or premises actually occupied by them, not on the incomes amassed in them. Again, if one of the great railways, instead of being assessed on the rateable value of the land occupied by the railway and the buildings at the terminus, itc., were to pay on their gross income, as land does, it would amount to £300,000 a year at least. Your correspondent leaves out of account the interest on consols, mortgages, debentures, preference stocks, Ac., amounting to some sixty or seventy millions annually, which pay absolutely no local rates or taxes.
I do not exactly make out what your correspondent means by the assertion "that local rates are legitimately regarded as some slight compensation for what took place two hundred years ago." I presume this alludes to the handing over Church lands to cer- tain families at the Reformation under Henry VIII. If so, he ought to be aware that this took place to a very limited extent, in Scotland at least, and that the bulk of such property has frequently changed hands since by the legitimate process of pur- chase and sale, and that the present proprietors are in no way liable for the original defect (if defect it be) in the original title.
Your correspondent then proceeds to ask,—" Does not a purchaser of land regulate the price he pays by the nett, not the gross, income P" It is to be presumed that he does, and this is one of the most curious and unaccountable facts con- nected with the subject. Until within the last five or six years, land generally commanded a price equivalent to from thirty to
thirty-five years' purchase of the annual gross income, and it is notorious that the return (nett) from such purchases rarely came up to 3 per cent., more often 21 per cent., on the purchase- money, while all other investments were expected to pay at least 4 per cent. or upwards. It would occupy too much space were I to attempt to explain the collateral reasons which led to this result, but of the result itself there can be no doubt.
I venture to think that I have shown that my figures are not fallacious, and that land and real property in general are sub- jected to heavy burdens in the shape of local rates and taxes, from which most other investments were comparatively free.— I am, Sir, &c., A SCOTC1I LANDOWNER. [It is obvious that the Reformation cannot be referred to as an event which took place two hundred years ago.—En. Spectator.]
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