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 respec 
tively 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