Publisher's Synopsis
Excerpt from Final Report of the Committee on Taxation of the City of New York
Increases in the selling price of land are a waste in the cost of pro duction, irrespective of whether one land speculator loses what another gains, or whether it is a net clear acquisition of any one land speculator. The average annual increase in the selling price of land in New York has been for the last decade about The total increase for the decade has been about Calculating interest at five per cent, and net ground rent also at five per cent, this means an annual charge of $125, ooo, ooo on a decade's increase in land values, to be paid by manufacturers, business men in general, tenants and home owners. This constitutes a dead weight fixed charge upon the workers of the city, of no use to any one except land speculators.
Gradually transferring taxes from buildings to land values, during a period of ten years, would prevent most of the speculative increase in the selling price of land, and would save the community this fixed but wasteful charge, which tends to increase the cost of living and interest rates, and to keep land out of use longer, thus restricting employment.
Speculation in land differs from speculation on the stock market. Speculation in land lays a burden in perpetuity upon the city; specula tion on the Stock Exchange is a game in which only gamblers lose or gain. Those who complain of their heavy burdens on real estate ig nore the fact that, while in 1880 real estate paid 87 per cent. Of the taxes for the city, in 1913 real estate paid only 75 per cent.
The untaxing of buildings will lead to the lowering of rents. More houses will be built, and the competition of these houses will bring down rents, not only in the outskirts, where the new houses are built, but in the city's slums and centers. These lower rents will apply not only to the tenants of residential apartments but to the tenants of commercial structures. In either case, there will be an economic saving, due to the lower rent. In the case of tenements, the lower rents will mean an increased surplus to be divided for general purposes, which will tend to increase wages and to lessen unemployment. In the case of lower rents for business purposes, it will make New York City more attractive to industrial ventures, and will, to the extent of lessening of taxes, increase the funds available for the payment of wages or the ih vestment of capital, and thus contribute to general prosperity.
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