April 5, 1913





RECORD   AND   GUIDE





711





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1





I AN INCREMENT TAX WOULD STOP SPECULATION





If Real Estate Should Fail Them, Where Could Thrifty Folk Invest
Their  Savings ?—A  Long  Chain  of  Evils  Would Attend  a  Surtax.

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I





THE palpable injustice of imposing
any additional tax burdens upon
real estate in any form causes one to
hesitate in even seriously considering
the proposed tax upon unearned values,
and yet when such a suggestion came
from the Commission on New Sources
of City Revenue the matter was forced
upon our attention. It does not require
a statistician to show that the investor
in real estate who holds it over a long
period of years, even in a community
of rising values, does not secure so great
a return as legitimate investors in other
kinds of property. This does not mean
that fortunes have not been accumu¬
lated in real estate, but even where this
has occurred the instances have been
exceptional and due to other causes than
the rate of return to the investor.

The thrifty are inclined to look upon
land ownership with favor. Some of
the reasons for the low rate of return
are obvious and the chief reason arises
from excessive taxation. The practical
difficulties of administering tax laws di¬
rected against other classes of property
tend inevitably to place a greater burden
upon a kind of property easily reached.
The real-estate owner usually derives his
profit from speculation, pure and simple,
but speculation involves risk, and to
deprive one of the possible profit due
to temporary fluctuations in value would
be to remove the last incentive to land
ownership and development.

Incomes from Property Decreasing.

This is a period of national prosperity
and yet income dependent upon the use
of real estate has been steadily diminish¬
ing during the past decade, and it is
clear that diminishing returns from land
ownership are due to some causes other
than the fair distribution of wealth in
an admittedly prosperous community. If
these causes do not appear upon the sur¬
face on analysis, they may be traced to
taxation.

Material prosperity appears in our
great nation;;l resources, the immense
production from farm, mine and factory,
which   are   showing   a   steady   increase





from year to year. In the distribution
of the vast wealth thus accumulated;
labor has been receiving its full share
and this is clearly shown in improved
living conditions among the wage earn¬
ing classes. In all progressive nations
the value of day laborers' work increases
as well as the capacity of their employ¬
ers to pay them, but at the same time,
as a rule, and at least relatively speak¬
ing, the supply of labor diminishes on
account of the increase in cost of pro¬
duction of workmen and the growth of a
leisure   class.

High Rents Not Due to Landlords.

The high cost of living to-day is
pointed to by the labor unions as making
high wages imperative. However true
this may be, our workmen are not sub¬
jected to the necessity of accepting dis¬
tress prices for work, which happens in
nations in their decline and in over-
populated nations. Whatever the cause
and significance of the high prices for
food, any increase in the cost of living
has in no way operated in favor of the
landlord, but greatly to his disadvantage.
The present scale of high prices is in
a measure traceable to bad banking
methods and the general inefficiency of
labor, and not to increasing rents, for it
is unquestionably true that in a distribu¬
tion of accumulated wealth land owners
are receiving less than their share, and
that the smaller purchasing power of a
dollar is here felt more than by any
other class in the community.

Now, if land already overburdened is
to be subjected to a new tax based upon
the unearned increment, and owners are
to be deprived of any increase in value
due to community conditions beyond the
control of an individual, some provision
must in justice be made for their com¬
pensation when values are necessarily
reduced, as so often happens. The evi¬
dences of such losses in our city are
abundant.

Depreciation of Values.

The downtown business section, from
Canal to 23rd street, has suffered serious
losses    in    assessed    valuations    nearly





enough, many think, to offset the un¬
usual increases in the Fourth avenue
and Fifth avenue sections. In many
parts of the city speculation has led to
overbuilding, and this too is a condi¬
tion which the individual land-owner
cannot control. Unless, therefore, the
last incentive to real estate ownership
is to be removed, no argument can be
found to justify the new so-called in¬
crement tax.

Community ownership may be justi¬
fied, but to deprive individual ownership
of every possible advantage and profit
offends one's sense of justice. It means
confiscation and the driving out of capi¬
tal, and cannot fail to retard growth in
a progressive city.

For these reasons, therefore, the so-
called increment tax would be unjust
and arbitrary. Here, as elsewhere, in¬
justice will breed dissatisfaction, and
the result cannot fail to retard a healthy
development.

ROBERT W. THOMPSON, JR,

52 Wall Street.





City and Country Costs.

For newcomers, where to live in New
York and its suburbs, is a problem
whicli takes years to solve to their sat¬
isfaction. This is as true of wealthy
families as of those who are limited to
a moderate expenditure, and as true of
bachelor men and women as of families.
Apartment house life seems pinched and
incomplete to those who have had spa¬
cious homes and grounds in the country,
yet, where shall a home be found in
the suburbs that will respond to every
requirement? While rents are apparent¬
ly higher in town, they yet include the
cost of heat; and, if one lives in the
suburbs, there is the cost of daily trans¬
portation to be added to the sum of the
coal bill, the water tax, and the rent.
Holiday trips of observation to one
quarter or another, in and out of town,
fail to find the ideal conditions. The
real secret of getting along will be found
in making a compromise, on the old prin¬
ciple that one can't get all he wants
in one  spot.







THLETIC   r/CiO





Open Freight Yard at Riverside Drive,  Manhattanville.