New-York tribune., 1902-03-10
UNEARNED INCREMENT,
puRAsE WHICH FRIGHTENs ENGLISH
TORIES OF LANDHoLD-
ING AND TAXPAYING IN ENGLAND.

London, February o.
,rhsre is a phrase which sets fine old Tories in
t,enzv Of excitement and indignation. 1t is
,,earned increment" AS soon il is whis-
e,ed whether in or out of Parliament. there
: loud and prolonged rumble Of disapproba-
ron from the opponents of revolution, spolia-
tim conhscation and chaos Unearned incre-
,nent spells all Of these dreadful things as soon
es any inquisitive reformer calls for investi-
cation Of existing methods of taxation. A de-
bate in the Commons this week has shown what
a magical word l. IS to conjure with. when the
dominating Influence of a small body of privi-
legged landowners is challenged. 1t was aca-
deuic discussion on a private bill embodying
the principle that vacant urban land which de-
rived substantial advantage from improvements
and municipal growth should contribute to the
burdens Of local taxation. Americans accus-
toned 10 the idea of special assessments for To-
:al improvements would not have scented any
thing revolutionary in the proposal They
would have considered il the most natural thing
N the world that vacant land in cities should
be taxed in the first instance. that the valua-
ton should be raised as its availability for
BUILDING purposes increased and that the own
srs chiefly benefited by local improvements
should be subject to special assessments. The
good old Tories in the Commons listened in
credulously for a space. and then We're appalled,
by the ominous words. 'unearned increment"
That established the revolutionary character Of
the measure, and it buried with the short
est possible shrft.
Three facts We're disclosed in the course OF
this debate. First that the system of rating.
local taxation had remained fundamentally
changed since the reign Of Queen Elizabeth. Sec
ondly, that the burdens Of local taxation had in
creased l35 per cent in twenty-eight years
Thirdly that the rates were paid not on land but
exclusively buildings the occuper or tenant
bearing the burden and the landowner being ex-
smpt. AS the expenses Of municipal govern
ment increased the cost Of administrative outlay
was steadily levied upon occupiers in proportion
70 the rental value Of their premises: and as
permanent improvements in drainage and street
paving and lighting became necessary, the same
class OF patient taxpayers found the money for
them. Meanwhile. unbuiIt areas held by large
landowners were not taxed either for ordinary
administration or for special improvements
They escaped taxation even when holding large
urban or suburban tracts which were gradually
rising in value through growth of population
or through local improvements; and when they
finally sold or built UP their vacant property
they profited handsomely by the unearned IN
crement- Mr.. Trevelyan, who brought on the
debate IN the Commons, illustrated the system
by referring TO a London landowner, who had
paid 5000 for q site and had finally sold IL TO
the County Council for $4,000. after holding IL
for twenty-five years and paying no taxes.
There were tumbledown buildings upon the
property when he made his purchase. and these
he cleared away and kept the land unused. The
ratepayers were steadily improving the town at
heavy expense, while he waiting for his un-
earned increment Of $4,000 That seemed a
strong case for a revision OF the system OF local
taxation by the introduction Of site valuation
a new source Of rating for the relief OF overbur
deaed occupiers The Conservative members
would have none Of IT, The system in force
since the good old days OF Queen Bess must not
he interfered with The occupier must be left to
sweat II out by himself!
Many arguments were offered In favor OF
taxing unused land. 1t was urged that much
vacant land in large cities with overcrowded
quarters would be brought into market and
built up, If the premium upon keeping 1t
used and untaxed were removed. 1t was esti
mated that with rate Of two shillings to the
pound the land valuation of the metropolis,
existing burdens OF occupiers might be reduced
one-hak. A royal commission had recommended
q general revision of local taxation these
lines, and the London County Council at vari-
GUS times had urged changes in the law with
special reference to levying a portion Of the
cost OF improvements upon untaxed landown-
ers who were enriched by them. Value was i'm
parted 10 sites by the movement OF population
and by the settled and progressive order OF
municipal administration and there was no con-
vincing reason why the owners Of vacant prop
erty should not pay adequately for the ser
vices now received gratuitousy. Land would
he cheapened by taxation; the problem Of hous-
ing working people would be solved more easily,
suburban districts would be improved more rap
Idly and ways and means would be found for
easing the burdens OF ratepayers, who were
complaining of the increased cost of living in
large towns. These pleas were urged in favor
Of the reform of local taxation on enlightened
principles. but all to no purpose. for the last
word had been said, far the Tory land
advocate had ventured TO refer to the unearned
increment. That settled it. and the bill
rejected summarily.
The debate really hung upon the fringe Of
very large subject. 1t merely affirmed the prin-
cple that vacant land should be taxed as well
aSbuildings and not be exempted from the bur
deus of municipal service 1t did not bring in
the betterment principle for which the Progress
sives Of the London County Council have been
standing during recent years. series of costly
improvements in the metropolis has been car
ried out entirely at the expense Of the rate
payers. Damages have been assessed for every
injury to private ownership. but part Of the
cost Of these extensive operations. such the
new thoroughfare from the Strand to Holborn,
has been thrown back upon those who are bene-
fitted by the Improvement. A Liberal House OF
Commons once passed a London bill with a
clause authorizing special assessments for bene-
ht but the House Of Lords, under the leadership
of large landowners, rejected the measure
revolutionary invasion of private rights. The