RATES AND TAXES.
[To THE EDITOR OF THE " SPECTATOR "J SIR,—In your leader on " The True Unionist Policy " in your issue of January 18th you lay down two propositions in respect to local rates :—" (1) that men should contribute to local burdens in accordance with their ability"; and " (2) that their ability should be measured by their total wealth, and not by their possession of a particular form of property or their engagement in a particular industry,"—the particular form of property being obviously land. To many on this side of the Atlantic who habitually read and agree with their ,Spectator the enunciation of these propositions by you must have come as a veritable shock, inasmuch as they are an
endorsement in the baldest form of that general Property-tax for local purposes which every authority who has given any attention to the subject of taxation has denounced as the worst form of local taxation ever devised. Professor Seligman, of Columbia College, New York, the leading authority on taxation in the United States, says of it :— •
" Practically, the general Property-tax as actually administered is beyond all doubt one of the worst taxes known in the civilised world. Because of its attempt to tax intangible as well as tangible things, it sins against the cardinal rules of uniformity, of equality, and of universality of taxation. It puts a premium on dishonesty and debauches the public conscience; it reduces deception to a system and makes a science of knavery ; it presses hardest on those least able to pay ; it imposes double taxation on one man and grants entire immunity to the next. In short, the general Property-tax is so flagrantly inequitable, that its retention can be explained only through ignorance or inertia. It is the cause of such crying injustice that its alteration or its abolition must become the battle-cry of every statesman and reformer."
To attempt any discussion here would be impossible; but allow me to ask :—(1) How would you define " ability " ? Is it the apparent ability indicated by the possession of personal
property or the receipt of income, or is it real ability deter- mined by taking into account a man's debts or unavoidable expenses? (2) Do you suggest an Income-tax for local purposes? If so, what scheme can you devise that will be either practical or just? (3) If you propose to tax personal property, have you considered the effect on business of all kinds, its injustices, unfairness, and impracticability ? (4) What scheme for the assessment of personalty or income can you suggest that the history of taxation in the United
States tells us has not been already tried and proved a ludicrous failure ? (5) Do you propose to allow one munici-
pality to tax the property of its citizens located in another municipality, or their incomes derived from property so located? (6) What reason can be given for compelling one of two men who enjoy equal civic advantages to pay twice as much taxes as the other merely because he is, or is supposed to be, twice as well able to pay them, other than a reason which is little better than Socialism ? (7) Why is not the occupation of real property to which the city has given its whole value (other than that which it formerly had for agri- cultural purposes) a perfectly fair basis on which to compute the amount of the occupants' respective contributions to the cost of civic maintenance ?
The fact that the whole effort of tax reformers in the United States and Canada has been to get away from the system which you propose, and reach a system resembling the one which you condemn, must be my excuse for writing this [Our correspondent has missed our point. Presumably he has not read, or has forgotten, the numerous articles in which we have stated our policy as to local taxation. We have never advo- cated a general Property-tax, for we are well aware of the abuses to which it is open. What we have advocated is an Inhabited House Tax as the instrument for local taxation,—or, to put it practically, rates only on dwelling-houses. A man's house varies with his income in the vast majority of cases, and the degree of ability to contribute can as a rule be measured by the rateable value of his dwelling-place. No doubt were our policy adopted it would be necessary to take off the rates many burdens now imposed on them, but this is in any case a much-needed reform. The localities are now doing and paying for many things which ought to be done and paid for by the central Government.—En. Spectator.]