Los Angeles herald., 1910-01-24


E9 the fate of the house of
Isl EeIl lords and the character of
Id UMl the British constitution, is
kSlsdzyAJ the result of several radical
innovations in the methods of taxa
ton in Great Britain as provided for
in the budget introduced in the house
OF commons on April 20 last. 1t is
commonly known as the Lloyd-George
budget, taking the name of the chan
cellor of the exchequer, who prepared
and submitted it. In the campaign the
Tories called it the "Socialistic budget
and the Radicals boosted of it as the
peoples budget" 1t contained many
new and progressive features, such as
a bureau of employment, a housing
and town planning measure and other
provisions for social reform. But the
chief feature, and the one which
caused it's rejection by the house of
lords, was the proposition to put tax
on land. That was denounced as So
cialism and robbery, and it caused the
lords and the landlords to preeipitate
this great political battle.
In the United States, where the tax
on land is a generally accepted and
never questioned method of obtaining
revenues by and for the, several states,
this issue is difficult to understand. In
the first place, England has never
taxed land. The revenue derived from
real estate is known as 1.-The rates,
and is calculated at so much per cent
on the rent produced by leasing the
land. If the land is not rented no
taxes are paid. In every case the
lessee or tenant, and never the owner,
pays the rates. This system was ar
ranged by the peers, who are the
principal land owners, 21S years ago,
when they exchanged to King William
this money revenue, to be paid by their
tenants, in lieu of all service, tenures
and levies of soldiers due to the crown
from the peers under the remaining
rules of the feudal system.
Now comes Mr.. Lloyd George with a
scheme for the taxation of land values.
1t is complicated affair, which at
first could produce but little revenue,
but it was looked upon as an entering
wedge. The principal proposals of the
budget with respect to land values
are threefold: The increment duty, the
reversion duty and the undeveloped
land duty. The first provides that in
the future the increase in the value of
land due to the efforts of society as a
whole, and in nowise to the industry
or ingenuity of the owner, shall be re-
garded as unearned increment and
that 20 per cent, or one-ffth, of such
increase shall be paid to the treasury.
Exceptions to this rule omit all
purely agricultural land, all land
worth less than $3.50 an acre, all prop
erty occupied by the owner as a home
and many other detailed exemptions.
The first 10 per cent Increment is also
exempted. The amount of the I'M
earned increment is to be determined
by commissioners, who will take the
total value of the land at the general
assessment to be made at once under
the budget, and from that they will
deduct the value of all Improvements
added by the owner or lessee, the value
added by advertising or by other eff
fort of the owner, and the 10 per cent
exemption. OF the remainder one-fifth
would be the tax due. This tax is to
be paid when the land is sold or when
it changes hands by reason of the
death of the owner. In case it is
owned by a corporation not liable to
death duties then the tax is to be paid
in 1914 and in each seventh year there
after
The second feature, the reversion
duty, is tax of 10 per cent upon the
value of the benefit accruing to land
owners at the expiration of leases of
longer than twenty-one years dura-
ton from improvements made by the
lessees. In England. where nearly all
are lIldut UPON ltdSGu
land, it is not unusual for land own
er, by the expiration of a lease, to be-
come possessed of valuable buildings
and other improvements for which he
was in no way responsible. The gov
eminent wants 10 per cent of the in
crease in the value of his property
thus created.
The third feature is the tax on unde-
veloped land-a direct tax of half
penny in the pound, a tritle over per
cent, payable annually, the land to be
reassessed every five years. This at
tacks those owners who keep land idle
waiting for the community to increase
its value, and, horror of horrors it pro-
poses tax on the game preserves!
Important as are these innovations to
the English people, they pale into in
when contrasted with the
machinery provided for the purpose of
enforcing them. The landowners and
the lords were not so much frightened
at these taxes, for they are very light,
as they were by the provision for the
assessment and valuation of the land
of the kingdom.
The last land assessment in England
was made by William the Conqueror
after his conquest of Eng
land in 1866. The records were then
in the Doomsday Book, and
that has stood for S44 years as the only
land survey in England. In the United
States, where land assessments are
made at frequent intervals and where