New-York tribune., 1915-12-19
MANY ANSWERS
TOTAX QUESTIONS
Realty Interests Opposed
to Putting Buildings in
Exempt Class.

Many progressive real estate organl-
zations have replied in writing 20 all
the queries asked by the Mayors com
mittee on taxation, which Is consider
ing what effect the untaXing Of build
incs would have on rents. the claim OF
those who support the theory being
that the proposed change would result
in a reduction of rents.
The Real Estate Board Of this city
filed a complete brief, and besides was
represented by Messrs. Clarkson, Dow
ling. Mcclure, Buttenwieser and Tired
well as the recent hearings. The briet
Of the Real Estate Board was prepared
and submitted through a sub-commit-
tee composed of David A. Clsrkson,
chairman; +. A. Tredwell. Joseph l..
Buttenwieser. Robert +. Bowling, Lau-
renee VI. s. Mcclure, Edward {. Cam
mann, Richard Collins, f. A. Alexander,
J. {. Bennett. John P. Leo and Charles
II. Ayres. The board emphasized the
fact that the change would diminish
care for economy in city affairs
Some replies by the boards commit
tee are as follows:
OFF the transfer OF the present tax
on buildings TO land values had the
effect of checking the increase in land
values. TO what extent would property
owners be compelled TO increase their
depreciation reserve on account or their
buildings, and would such increase IN
depreciation charge be added to rents
A.-If the present tax on buildings
were transferred TO land IT would d.
minish land values. and consequently
owners, to cover the depreciation OF
their buildings, would have to add such
a depreciation charge to rent in order
TO obtain a return sufficient to yield the
prevailing rate Of interest on capltal.
of the untsxing of buildings
should result ir. the construction OF
more buildings and larger and more
commodious ones, would the effect be
through competition 70 reduce rents IN
all buildings or only in the older
smaller and less commodious ones? A.
-Accepting the hypothesis that this
change of taxation would result IN
fall in rents, il would affect the Older
and poorer buildings most severely.
of the effect of untaxlng build
ings would be 10 stimulate the con
struction of buildings, and thereby
through competition TO reduce the
rental per unit Of space occupied, to
what extent would the renters take
larger accommodations for the same
money rather than occupy the same ac.
commodations for less money? Al
such fall occurred the choice OF oc-
cupancy of larger space at the same
rent or the same space at lower rent
would depend Upon the enterprise OF
the tenant and the prevailing condl-
tions in the business world at the time
of the change.
OFF the untaxing Of buildings
would lead TO reduction IN rents,
could the reduction in rents ever be
greater than the amount of the tax 50
transferred? If SO, why? A.-The re-
duction in rents might conceivabl" be
greater than the amount of tax trans
ferred if il led 10 such change In
values as would result IN panic IN
real property.
Q.-Would the assumed tendency TO
shift TO the tenant the benefit Of the
lower tax on buildings meet, under the
actual conditions in New York City,
with a friction-that is, are there any
peculiar conditions connected with the
mobility Of the population which would
interfere with this assumed reduction
in rents? A.-The necessity of certain
classes of workers to live near their
places of employment, the desire OF
many to remain in the neighborhoods
to which they have been accustomed
and the natural tendency of foreign
peoples TO concentrate in district all
would tend TO check the mobility of the
renting population.
Q.-To the extent that taxes form an
element in rents, do tenants at the
present time in New York City feel
that they are interested in the city
budget-that is, in the city expendi-
lures which result in city taxes? II it
be assumed that the benefit of the un-
taxing of buildings would accrue to the
tenants, would this mean lessening OF
interest in the budget of the great
mass of tenants? Would this fact ac-
centuate the tendency TO have all the
taxes paid bt one class of the popula-
ton and to have the expenditures voted
by another? Is this healthy tendency
in a democracy? A.-As long as build
ings are taxed and some portions Of the
city's expenditures fall upon tenants
they have an interest in keeping down
the expenses of government. If il is
true that the proposed untaXing of
buildings throws the payment of the
greater part of the taxes on the land
owners, who form but a small class OF
the community. and relieves. for the
most part, all other classes from taxa
tion, il would certainly diminish care
for economical government. II would
be most unfortunate in a democracy TO
have all, or practically all, expenditures
paid for by those who by reason of
their small number have but little voice
in the government. Would not such a
condition afford an almost irresistible
temptation for the many, for their own
benefit. 10 exploit the few? Would not
the use Of taxes for all kinds of ex-
travagance and schemes elsue? II all
taxes were placed upon land, would not
the taking OF all land value by taxation
result as was so forcibly predicted by
Henry George in his Progress and
Poverty" in these terse sentences:
81 do not propose either 10 purchase
or to coniscate private property in
land. The first would be unjust: the
second needless. Let the individuals
who now hold it still retain, if they
want to, possession of what they are
pleased TO call their land. Let them
continue 10 call il their land. Let them
buy and sell. and bequeath and devise
it, We may safely leave them the she'll
IL we take the kernel. II is not neces-
ssry TO conhscste land; 1t is only neces-
Sary 20 conhscate rents. We
may put the proposition into practical
form by proposing TO abolish all taxa.
ton save upon land values.
That is the first step upon which the
practical struggle must be made. When
the hare IS once caught and killed cook
ing him will follow as matter q,
course. When the common right TO
land IS so far appreciated tha. ali taxes
are abolished save those which fall
upon rent there Is no danger II much
more than IL necessary TO induce them
to collect the public revenue being left
to individual lsndholdsrs.-