New-York tribune., 1909-11-28

The principle of taxing the unearned
increment of real estate values. which
has been embodied i'm the pending Brit
ish finance bill and is ono of the features
Of that instrument 10 which objection
is made by the Opposition. seems likely
10 be generally adopted in Germany. at
least as a part of the municipal schemes
Of taxation. Ii has indeed for some time
been pTactised in Hamburg and some
other cities. and now Berlin is consid-
ering the adoption of it, with pros
pect that other large cities will follow
the example. The tax which is actually
levied in Hamburg and which it is pro
POSED Ia levy i'm Berlin is not so large
as that which Mr.. Lloyd-George pur-,
poses imposing upon British land owners
who. as Mr.. Chamberlain once quoted
concerning them. toll not. neither do
they spin" and yet grow rich through
the appreciation of values caused by
neighbOring improvements to which
they themselves do not contribute. Yet
the principle is the same and that Is the
all-impOrtant thing; for once the prin-
ciple is established the detail of per-
centage can be fixed at will.
The basis Of reckoning for this tax in
Berlin is TO he the difference between
the amount received for property when
sold and that which had formerly been
paid for il by the present seller. In
making the computation ; per cent is
10 be added 70 the price which was paid
for the property, as allowance for the
costs OF transfer. and 3 per cent more
TO compensate the holder for the period
when the property may have been un-
profitable All expenditures for perma-
Lent improvements on the property are
to he deducted from the price received.
Then upon the increment thus aScertained
a graduated tax is 10 be levied, begin
ming with per cent on increments not
exceeding 500 and rising TO > per cent
on all exceeding $1,000 Moreover.
where the increment is 10 per cent or
more of the purchase price, additional
taxes are Ia be levied. beginning with
10 per cent Of the first tax when the
Increment IS from 10 10 20 per cent Of
the price and rising 10 100 per cent when
II is more than 100 per cent of the price.
Thus. il a man pays $1,000 for piece
Of property. spends $500 on it in per-
manent improvements, and then sells il
for 5000, there will he added 10 the
$4,000 > per cent or $50. for transfer
costs and , per cent. or $3.50. for the
time when the property made no return
to the holScr. making the purchase
price, for taxing purposes. 5000; then
from the sale price viii he deducted the
5000 for Improvements. reducing it TO
$1,000. The unearned increment thus
ascertained will bc $1,000. and upon il
he will bc taxed per cent. or so. Then.
as that increment amounts Ia ~ per cent
of the purchase price. n surtaX of ~ per
cent of the first tax, or 81. will he
added. making the total levy S24. This
arrangement provides for the taxation
cf the unearned increment of property
cl'y rs il changes hands In what WAY
tine impOSt Will be levied upon property
which does not change hands remains
10 bc seen. though il would seem that
equity demands that such levy bo
made. II does not appear that there is
any particular opposition 10 this tax in
Germany, and there is certainly no agi-
tation against il as a socialiStic device
f"r deSpOiling land owners and for abol-
iSEing private property i'm land.