THE  SINGLE  TAX

159

chaser  must  also  assume.  He  will  then  purchase  the
land  not  at  $4,000,  but  at  $2,000.  The  tax  charge  of
$  100  and  the  mortgage  interest  charge  of  $100  respectively ­
  reduce  the  selling  price  of  land  by  the  same
amount,  $2,000.  The  mortgage  and  the  tax  together
therefore  reduce  it  by  $4,000;  and  the  purchaser  will
buy  the  land  at  $2,000,  the  value  of  the  equity  that
remains  after  both  mortgage  interest  and  tax  have
been  paid.  This  $2,000  is  the  capitalisation  of  the
annual  value  of  the  lot  after  all  charges  have  been  met.
The  gross  value  is  the  taxed  value.  The  net  value  is
an  untaxed  value.
It  follows  from  the  above  too  brief  analysis  that,
under  the  present  system,  the  selling  value  of  land  is  an
untaxed  value  and  land  owners  who  invest  to-day  are
entirely  exempt  from  taxation.
As  this  exemption  of  the  present  owner  holds  true
to-day,  so  it  will  be  true  in  future  of  each  new  purchaser
subsequently  to  the  imposition  of  any  new  tax.  It
is  in  the  very  nature  of  things  that  the  burden  of
a  land  tax  cannot  be  made  to  survive  a  change  of
ownership.
But  when  we  turn  to  the  case  of  the  taxation  of
houses  we  find  that  no  parallel  appears.  Whereas  a
tax  upon  the  lot  could  not,  in  the  nature  of  things,
increase  its  annual  rental,  or  cost  for  use,  a  similar
tax  upon  the  house  is  added  directly  to  the  annual  cost
to  the  user.  If  a  house  costing  $6,000  to  build  is
subject  to  a  tax  of  |ioo,  this  amount  must  be  paid
annually  in  addition  to  an  interest  charge  of  $300.
Increasing  or  decreasing  taxation  upon  the  lot  has  no
influence  upon  its  annual  cost  to  the  user;  while
increasing  or  decreasing  the  tax  upon  the  house