RATING ON UNIMPROVED VALUES.

Lyttelton Times, Volume C, Issue 11752, 2 December 1898, Page 6

RATING ON UNIMPROVED VALUES.

I TO THE EDITOK. Sir, —As Mr Ell. who has written four or five columns in favour of rating on unimproved values, appears to grudge my occupying about one-third of that space for my reply, and to feel his disadvantage in position, I will endeavour to make this as brief as the subject will remit. I do not, like him, apologise for delay on the ground that my leisure time is fully occupied, but I have no leisure, and have been tmwell. Mr Ell seems to think that because certain members of the Legislature objected to the ratepayer’s in any particular locality having the light to decide by vote which particular system of rating they prefer, they have not the public welfare at heart, and that because he and some legislators believe in rating on unimproved values, and that with the fact that it would relieve luxation on iniprovemen'ts, .is sufficient to justify the change. It does not seem to have occurred to him or them that the opponents may think that they, are better judges' of political economy than the average ratepayer, and may also -object • because the rule of the majority is not always, the most just. If the principle of taxing land; values only is fair, surely Parliament should be most qualified to decide it, and bring it into force throughout the colony. Mr Ell states that he agrees with me that taxation should he in proportion to ability to pay. but. submits no argument to show how the change he advocates will carry this out. Finding (that he cannot justify his proposal on the ground of fairness, or as involving equality of sacrifice, he now changes his ground, arid says that, it will tend to prevent the aggregation of land in few hands, that it will more fairly distribute wealth, and prove the greatest good to the greatest number. I am afraid Mr Ell will consider me a hard case, as I believe norje of these contentions can be upheld. In reference to the first of these contentions, as all owners of naked land under the new system would be taxed heavily in proportion to vaJue and ability to pay, it seems to me that the rich ■nan will he best able to retain his "property. Jr i s most probable that the poor mail’s small holding, when depreciated in value by the' tax, will in many ' cases be absorbed by his richer neigh-’ hour or by the mortgagee, and we all know that very large '■ estates have, already been formed by meaps of mortgages to large, public companies. In reference to the Second contention, if the Act will tend to distribute wealth, it can only do so at the expense of many of the present owners of tiie land. The voting power of .the majority may do it, and in doing it will as effectually rob the minority as any highwayman could rob, but with, the difference that tne minority can offer no defence against the State-protected 'robbers. The Act may certainly distribute wealth,but that it will fairly do so cannot be maintained, rnjd in case of a. distribution taking place under it, it would lead to further distributions at no distant date, when the original distributors would probably regret that they had not been content to suffer the evils they knew of, in preference to experimenting in political economy.Lastly, I cannot agree that the Act will do the greatest good to the greatest number, because in this colony the greatest number of ratepayers are holdings, on which the improvements are small in proportion to those on the larger holdings, and because I think for any good to accrue it must be obtained by the exercise of principles of equity. To rob people by unfair taxation would destroy crnfidence in the justice of.the laws, take away inducements to thrift, and re-establish in all its former authority, that good _olcl rule —

“ That they should take who have the power,

That they should keep who can.”. Further, I think, even supposing the majority obtained a small reduction in their local taxation by the change, it would not last long, because taxation is rapidly increasing throughout the colony. The rates in Christchurch and suburbs are about double what were twenty years ago. . They are sure to increase, through some of the beautiful schemes being adopted that are continually being submitted as desirable, and through the evident determination of the Government to impose further burdens upon the local bodies. As taxation increases, the taxation on land- values only will increase, much faster than if levied on both land and improvements. In all probability the increase of taxation would, in a. few years, absorb the small saving at present to be gained by the medium properties by taxing land only, and the owners of such properties will find that in vbting for the system they, have sold themselves for a mess of pottage. They will have let off the rich man, done no good to themselves, and unduly oppressed their poorer neighbours. Mr Ell refers to certain blocks of land that have recently been sold in Sydenham at from ’£2so to '.£300 per acre, which he states have been locked up for years for the rise that would surely come. Such instances as these appear to be the main object of attack of the single-taxers. They are comparatively isolated cases,, and laws are not usually, and should not be, made to punish a. large number of, persons in order to get at a few isolated individuals. If these Individuals obstruct public progress by- not making proper use of their lands, it would be more honest to ta.ke their lands from them on giving them the value at the time 'it is taken, than to indirectly rob them of that value by taxation. Even for the" cases quoted a'great deal can be said, and I will rive a' few facts to , show that the owners of these lands have not reaped all the unearned increment, and are not quite so bad Mr Ell would make them, appear. The land west of the Windmill "Road was not acquired by the present owner at anything like £3 per acre. - A large part of.it was purchased at about £l6O per acre, , The block was assessed in 1882 m one lot at £4OO per acre, exclusive of. improvements. It has been in the market foT sale in small lots for. about ten yeans at from £IOO to £75 per rood. Some’ of it has recently been sold at much less than that, and to enable it to be sold, nearly 25. per cent of the land has had to be sacrificed for streets, and £3O per acre spent for their construction. Further, to induce sales, remarkably easy terms have been offered, and still about twothirds of the land is unsold. The land east of the Waltham Road was assessed in 1882 at £SOO per acre in the block. Most of it has been in the- market at nominal values for over ten ' years. It took over seven years to sell five acres of it. To enable it to be sold, about 20 per cent of the land had to be sacrificed for streets, and nearly £4O per acre for construction of streets and drainage. _For many ,ye&rs the rates on these lands have ranged from 25s to 30s an acre. If jour readers are curious to ascertain how much of the unearned increment: these owners have got by holding - their lands,- they,can do,so from these figures, and I venture to say that they won’t find much in it. Mr EH says if these lands had boon rated on the unimproved value they would have paid £4 8s per acre, and as thatis-a greabdealmore than the rent received, and the nominal value could not be got, it is evident that the Introduction of such a system of taxation would have made it impossible to hold the land, and as it would also cause all comparatively unimproved properties to be similarly affected, there would be no market for them, and the ownersrwould either have to submit to part with their properties at tremendous sacrifices, or submit to the same result by the more gradual process of excessive annual taxation. Mr Ell asks if sections with sale notices upon them were included in the two hundred unimproved sections in Sydenham referred to in my last letter, the owners of which are either unable to build or see no inducement to do so. Possibly some of the sections referred to have such notices on. them, the owners being anxious to sell while the boom lasts, but, £pr his edification, I may say that' the number of such sections on the roll is more nearly three bundled than two. as I made a.n allowance to provide for doubtful cases. ■ - - Finally, I would remind your readers again that, in consequence of Hr Ell computing his examples on the basis that all rateeuxuiertheAofcarercai-maimpiPved-'va

instead of making allowance for its provisions, .exempting certain rates, his examples are iiicoiteCt and misleading. He says that an amending Act will put that right. A Bill to do so was under consideration of the 1 House last session, and, judging-by ils reception, and its ultimate abandonment, it is -very doubtful whether such a Bill will ever pass. Some of the former supporters of the principle in the House have evidently seen the error of their ways, and whether such an amendment ultimately passes or uoi, it should be remembered that if the Act is adopted in any district, it is adopted as it stands, with all its imperfections.—l am, etc., CHAS. ALLISON.

Sydenham, Nov. 30, 1898. TO THE EDITOR. Sir, —Before dealing with the main question, I have just a woid for your correspondent “ St Albans/’ If he wishes to retain'the respeot of those with whom he may come in contact in newspaper correspondence, he should not be guilty again of placing within quotation signs a statement . purporting , to be an , extract from Ids : opponent's letter. - In his last letter there appears within, quotaiqn signs, ' the. ■ folowing“ Under the new syriem a •well-to-do labouring man wiith a house at £2oo'and land at £IOO, would get a reduction of 10s 8d per year." There is no shch ; statement in my reply. In -his.’first loiter he- ' stated, “I have half an acre 1 of land, valued' at £IOO, and house improvements valued at £200.” He then proceeded to calculate his total rate at Id, and the rate on his land 3d, and, of course, made his rates come out the same under the present' and proposed systems. I called his attention to the fact that in each case he' had dropped the fraction 41-6 M. He has again deliberately dropped them. I now ask nlm again, (to play the man, restore the fractions, use the figures which Bused in my paper, and which as I explained, were the total of the different rates, excepting the sanitary rate. If he will do this, and calculate his total value of £3OO at Id and 41-64ths of a penny, and his unimproved value of £IOO at 3d and 41-64ths of a penny, he will find that the proposed system would benefit him to the extent of 10s.8d. Should he again resort to such shabby means, I must decline to have any further correspondence with him. I .have no interest whatever, dirtily, or indirectly, in St Albans, but, as one who has long been a convert to the principle-of taxing land values, believing that the system in its operation would produce, the greatest good to the greatest htimberj l' dm interested in its adoption,’and long before the appearance'of my paper, I had coiripiled a table of calcidatibns, which I furnished,, together with requisition forms; to several St Albans ratepayers. I have done ■ the like with respect to Linwood and Sydenha.m. I have no wish to see his friend who is trying to buy seven acres injured, and I would remind him that any system of taxation, however carefully planned, will be sure to press heavily on some one. He said his friend was trying to purchase his land for £6O per acre; that it was assessed at £9O an acre, evidently the true value, otherwise it would have been reduced by the Court. Therefore, had he succeeded in his purchase, he would, in due course, have come into possession of 50 per cent of unearned increment, that is, £2lO of value created by the. community. Now, it is well-known that the value of land for building lots is on the rise in his district, and with the expenditure of the loan money, together with the improved class of homes now being erected in different parts of the borough, will cause a further rise ; and there is little doubt that in the no distant future that his friend would have core in possession of land worth £2OO an acre, which lie had purchased for £6O per acre, and while his land was growing in value the possession of it would provide him with the means of gaining a livelihood, and so relieve him of t|pe many anxieties borne by the man. who is solely dependent on a fluctuating, labour market; for employment. As I pointed out in my reply to your correspondent, the effect of the system cannot be judged by isolated cases. In bis letter he states “ that rating on unimproved values will not benefit ' the artisan and labourer very much, if any, and that it will take a lot of rates off the ‘ big, bug ’ with his £7OO to £IOOO worth of improvements/’ With, respect to Ms first contention, that the artisan and labourer will suffer, I would advise the people of St Albans to draw their own conclusions from the following, the owners being artisans, labourers, shop assistants, etc., men working for weekly wages. I will take eight cases, the capital value varying from £2OO to £360, the size of the sections from a quarter-acre to one rood two perches, and the rateable value from £SO to £66. On the total value the rates vary from £1 7s 4d to £3 9s 3d, and on the unimproved value from 15s 3d to £l.' I will next take nine properties of a total value from £66 to £235, the sections varying in value from £l2 to £4O. The rates on total value would range from 9s to £1 12s Id, aiid on the unimproved value from 3s 9d to 12s Id, a- saving in rates of from 5s 3d to £l. Next, six examples from' one road, the total value varying from £177 to £390,; and the unimproved value from £l4 to £3O, On the total value the rates would be £1 4s 2d to £2 13s 3d, and on the .unimproved value from 4s 3d to 9s Id, a saving of 19s lid to £2 4s 2d. I will now take eight examples from another .street, the total value varying from £212 to £585,. the unimproved value from £35 to £45. On the total 'value the rales would be £1 8s lid to £2 12s 7d, and ten the unimproved value from 10s 7d! to 15s <d, a saving, from 18s 4d to £1 19s. The great majority of the cottage® in St Albans are owned by the,-wage-earning class, and I claim that the thirtv-one examples I have given apply to fully 75 per cent of them, so that, if the proposed system were put in operation in St Albans, nearly every cottager would be benefited. ~ . Now, with regard to the “big bug" with the £7OO to £IOOO worth of improvements, who .seems to be blinding my friend, for be does not ,seem to be able to get rid of his prejudices. He does not seem to be'able to see that the value of £7OO or £IOOO in' a. ! building repretonts'wages paid for consbruefidn/'ahd mpney for material, which has cost a.lot of labour to produce, and that the man who spends Ms money so is a benefactor. On the other hand, £IOOO put into land does not give r * se k° labour. “ St Albans should regard the man who sinks his business profits in a well-appointed boms as 'a good colonist, and nob as an enemy to the community. But, judging by what be has written, it would appear that he would not object to 1200 or 1400 cottagers paying more rates, so long as’that was the means of “ getting at” the man who had been criminal enough to build a ten or twelve-roomed bouse with his money, instead of locking it up in a bank, in. land, or farming it out at 7 per cent and 8 per cent interest. Bub, if it will afford “St Albans” any satisfaction, I may tell him that this proposed system of rating would have the effect of making one rich trust,. owning fifty acres

of land, which is very valuable, and rapidly growing more valuable, pay over £4O a : year more, and'£hat 4- ; rich company owning a block of land (without any improvements hri it), apdVhow- paying- £5 16s. under the proposed system would pay £l2 17s. An absentee now paying on a valuable block of land, with no*improvements thereon, £2O Bs. would pay under the proposed system £45 4s.

In conclusion, by rating on land values, the improvements on the land, the homes of the people, representing in value the very large sum of £329,815, would’entirely escape taxation. By this means 1 the poorer classes pf the community would be benefited by having their rates reduced, and, at the same lime, they would participate in the unearnedincrement; which our departed Grand Old’ Man, Sir George Grey, long ago instilled into our minds was the rightful possession of the 1 people.—-I am, etc,, H. G. ELL. (Future letters on tins subject must bo limited to fifty or sixty lines.—-Ed L.T.)