24
THE A B C OF TAXATION
to take for public purposes the future increase in ground
rent will be interested to note what an opportunity for
putting such a plan in operation in Boston is shown by
the above figures to have been lost twenty years ago.
X. —Corresponding Exemptions
In any calculation of the effect of the imposition of
all taxes upon ground rent, it must be borne in mind
that the landlords, who are the owners of the ground
rents, also own buildings and other improvements upon
the land, together with a large per cent of the personal
property, so that they, as a class, would find the
additional tax upon their land offset by the exemption
of buildings and personal property.
XI. —The Exemption of Assessed Values
One reason why, under a just system of taxation,
large-hearted landlords would cheerfully offer their
necks to the tax yoke is the fact that so far as concerns
their investment in land most of them are now privileged
to be entirely exempt. In other words, the present
tax is not a tax burden upon them, even though this
fact is not to their prejudice. But while it is true that
the capitalised value of any tax on land is deducted
from its selling price, and that any purchaser, after the
tax is once imposed, gets his land tax free,* so that
the landowners of Boston who have bought their
holdings since the present tax rate was reached are
practically exempt from taxation, it is also true that
*A tax, as a first lien, is practically a first mortgage to which any regular
mortgage must be second. The effect of the tax in the first case and the
mortgage interest in the second case upon the selling value of land is exactly
the same. When the State imposed a tax of $10 upon a lot of land hitherto
untaxed and worth $1,000, the effect upon the selling value was the same
as though it had taken a first mortgage of $200, leaving to the owner as the
selling value an equity of $800.
