Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1906-09-27
PURDY TALKS OF TAXATION
Tenth Annual Convention Of League Of
American Municipalities in Session.
OVERSIGHT HUNDRED nEIteATts PRESENT
First sesssoa HELD an Auditorium az
Chicago Addressed NJ Mayor
tslDunne, Response by
President Rhett.

CHICAGO, Sept. 2s-The tenth annual
convention OF the League OF American Mu-
Inequalities convened at the Auditorium to-
day, with over 500 delegates present from
all. parts Of the United states and Canada.
Mayor Edward F. Dunne.~was accorded an
ovation in Welcoming the visitors. Presi-
dent Rhett Responded
Mr.. Lawson Purdy OF New York deliv-
cred an address on 'grhe Influence OF Tax
alton on the Prosperity of Cities" He said
in part:
In 1873 Ernest Ensley, a wealthy planter
OF TENNESSEE. urged an amendment 70 the
constitution 80 that nothing should be
taxed which is Of value 70 the state, that
and would come TO It. This rule has be-
come an axiom, but before It can be APP
psss. fhS must Be- a s aS9 sis
cuss only what can be accomplished in
most cities by executive officials under ex-
The interests of the city and of its citi-
Gems are Identical Revenue must be ample
and economically administered Needless
expenditures must be avoided, such as the
unnecessary streets, so common in all our
cities, which must be severed, paved,
lighted lighted cleaned and Policed. TO avoid
ment Of the city must be uniform and
compact, yet without ovetcrowding. Every
Cities not R the 70 lots us Sss put to- the bsa
use. We see WORKOUT wooden buildings on
lots which ought to be improved with
mepts on sites needed for factories, lots lots
entirely entirely yassnt and unused needed for
land, intersected by streets, which ought
TO be uSed for gardens ttt..
who Pays Taxi
The principal source Of revenue in all
American cities is the tax on real estate,
who pays the real estate tax The only air
nculty in answering this question arises
because real estate is two things Of differ
is necessary to distinguish the effect OF the
tax Insofar as IL falls on the value of land
from its effect so far as IT falls on i'm
buildings is the same the effect OF the
tax on any other labor product. The tax
tends to check the erection of buildings
and when the supply is decreased the rent
rises by the amount of the tax The tax
on. land not only cannot decrease the sup
ply OF land as does the tax on buildings
but really Increases the supply, because II
induces some owners to sell or improve
sooner than II there were no tax. The
value of land, exclusive OF improvements
makes land CHEAPER and easier TO get, re-
duees rentals and tends to force land TO be
put to the best use. The tax is no burden
on owners so long as the rate is UNIFORM
because the purchase price paid was re-
duced by the amount Of the tax capitalized
at. the current rate of interest.
Assessments are generally imperfectly
made with disregard OF the law, which
requires an assessment at market value
Moreover, buildings are almost always
overassessed. as compared with land
Buildings can never be worth more than
the cost Of reproduction, and very soon
after -they are erected. deteriorate from
wear or by comparison with more modern
buildings. Land on the other hand. in all
progressive cities, IL worth on the average
more each year than the year before In
order 70 secure an equitable assessment it
be sepafstely stated as a IN the snC eItS
OF New York and I'M Ma ssachusetts and
Maryland. and 1t is. desirable that, either
In other ways. the greatest publicity should
be given to the work OF assessors.
An eGuitabIe PIan. >' -~.s
II the real estate tax is equitaby as
sessed, buildings willis assessed at less
Comparison Of bur Sities with. those Of Of
Europe proves that 'ourta real estate,
enormous value in our development and
prosperity. European cities derive very lit
tie revenue from the value of land and are
our example, Paris has recently adopted
a small land value tax n place Of the
or dqfy on oTS Sgcb to
tunately, have greater powers OF local
self-goyernment than American cities. are
on land values for economic rather than
revenue reasons. In England the present
ministry ~ committed to such tax as
a matter OF party policy.
IL land were assessed at its market
value. as the law directs. and buildings
were not overassessed the profit now
gained by retaining worn-out buildings on
lots needed for improvement. or by put
ting up one-story stores as taxpayers, b.
stead of buildings suited to the site, will
be materially reduced. Taxes on build
ings will be less and homes will be better
and cheaper The increased contributions
Of the tax on land will relieve the burden
of taxes which check production, increase
the cost OF goods. reduce the opportunities
for employment. and thus tend to lower
wages. We have pointed out that un-
necessary streets should not be opened.
They are opened because the vacant lot in
dustry is profitable The smaller the profit
in Withholding land from use the fewer
will be the unnecessary streets. II the
city is compact. lots not Immediately
needed for building will not have a fcti-
tious value and will be utilized TO advan-
tage for market gardens. With these adj
vantages growth will be more rapid. and
with added growth land values will In
crease. so that the more the source of
revenue is tapped. the larger Will grow the
flow of revenue.
An honest and intelligent assessment OF
real estate for five years would add to the
wealth Of the country hundreds of millions
OF dollars and improve the conditions OF
life for all our citizens. And to get II is
simple. easy and in obedience to existing
NJ