44

THE  ABCOF  TAXATION

(a)  Unlike  the  tax  upon  land,  the  tax  of  $100  upon
the  house  cannot  come  out  of  the  $300  rent  (house
rent  or  interest)  except  indirectly  through  its  effect
upon  wages  as  before  mentioned,  because  house  rent
cannot  normally  be  less  than  interest  on  the  actual
cost  of  building  the  house;  it  must  instead  be  paid
by  the  user  of  the  house,  over  and  above  his  interest,
making  his  house  rent,  the  annual  cost  of  his  house
for  use,  I400  instead  of  I300.
(1b)  To  repeat:  a  house  rent,  otherwise  $300,  is
increased  to  I400  by  a  tax  of  fioo  on  the  house.  In
contrast  with  this,  you  may  either  take  off  a  present
tax  of  1100  from  the  land,  or  you  may  increase  that
tax  to  I200,  and  in  neither  case  will  the  cost  of  the
land  to  the  user  be  affected.  Take  off  the  fioo  tax
from  the  house,  and  the  cost  of  the  house  to  the  user
will  be  reduced  from  I400  to  $300  a  year;  of  land  and
house  together,  from  I700  to  |6oo.
Proposition  9.—  The  moral  of  this  illustration  is
that  you  get  for  use  annually  I300  worth  of  land  for  I300,
and  a  house  costing  $300  for  I400.  In  other  words,  a
tax  upon  land  is  a  part  of,  is  included  in,  and
comes  out  of,  ground  rent,  and  is  no  burden  to  the
user:  while  a  tax  upon  a  house  is  a  clear  addition
to  house  rent,  and  comes  principally  out  of  the  user
of  the  house.
To  recapitulate:  (1)  It  has  been  shown  that  a
house  tax  of  |ioo  that  has  been  regularly  levied
takes  in  taxation  |ioo  a  year  of  the  user’s  income.
(2)  It  has  been  shown  that  a  land  tax  of  $100
takes  in  taxation  no  part  of  the  income  of  the  user  or
present  owner,  provided  that  he  purchased  the  land
after  the  tax  was  imposed.