42 
THE A B C OF TAXATION 
on purchase price, plus interest on any mortgage, plus 
taxes. 
Proposition 4. — Neither a tax upon ground rent, nor 
the ground rent itself, adds anything to the cost of land 
for use. 
(a) Economic rent, ground rent, measures the value 
of all public, quasi-public, and social service. If the 
whole ground rent is not a burden, but merely an 
equivalent for social values received, neither can interest 
and taxes, two of the parts of which ground rent in our 
illustration is composed, be a burden upon the user. 
A tax upon rent comes out of rent, which, as has been 
explained, is the natural tax that every user has to 
pay to some one, and hence it subtracts nothing from 
wages and adds nothing to the cost of living. 
Proposition 5. — You cannot pay |6,ooo for the land 
and in addition pay either the mortgage interest of |ioo 
or the tax of |ioo, because that would make land cost 
you I400 per annum which by our assumption is worth 
only $300. 
(a) The tax upon land cannot be added to the ground 
rent—which is kept at its maximum by market 
demand — but is a part of, and must come out of, 
ground rent. If it could be added, that fact would 
itself indicate that the ground rent was I400 instead of 
$300, which is contrary to supposition. Land worth 
only I300 a year cannot be made worth I400 a year by 
putting a tax of $100 upon it. 
(ib) Let it not be forgotten that ground rent, in the 
sense in which the word is used, is the same homo 
geneous thing, one and indivisible, the world over — 
what land is worth for use. It is rent —or use value 
— not cost of construction or cost of production —