Land Taxes

The first three duties yielded a small though increasing revenue in the early years. Serious difficulties however soon arose in con nection with the assessment of the values required by the statute, which ultimately led to the practical suspension of the Undevel oped Land Duty and Reversion Duty and the crippling of the Increment Value Duty. Proposals for remedial legislation were put forward in the Revenue Bill of 1914 but owing to the out break of war were not proceeded with. The position was re viewed at the end of the war and it was decided to repeal the three duties. This was done by the Finance Act, 1920, and pro vision was made to repay all the duty collected since their imposition. The Mineral Rights Duty alone remained in force.

Australia.

In Australia the new land taxes have taken the form of taxes on the "unimproved" value of land, the value of buildings and other improvements being excluded from assess ment. The taxes were partly designed to break up large holdings and to this end the rates of tax are usually graduated so as to bear heavily on large landowners. Victoria introduced a tax on land values in 1877 and was followed in course of time by the other States. The most important development, however, occurred in 1910, when the Commonwealth instituted a federal land tax (graduated from id. to 6d. in the £) throughout Australia, in addition to the existing State taxes. For 1926 the Common wealth scale ranged from id. to 9d. in the £, and there were graduated taxes in Queensland (id. to 8d.), South Australia (id. to ild.) and Tasmania (id. to 3id.). The tax was levied at a flat rate in Victoria (2d. plus 5%), Western Australia (id. or 2d.) and New South Wales (Id.).

The land tax revenue raised by the Commonwealth and the separate States for 1925-26 contrasted with their total taxation revenue was :— New Zealand.—As early as 1878 New Zealand instituted a tax of 2d. in the £ on the unimproved value of real estate. Although abolished in 1879 and replaced by a general property tax, the land tax was re-instituted in 1891, and after 1893 was again restricted to the unimproved value. For 1925-26 the tax was graduated from about id. to 71d. in the L. The tax produced 11,266,000 towards the total taxation revenue of L17,254,000.

Germany.

Various towns adopted an increment (W ertzu wachs) tax on land beginning with Frankfort in 1904, followed by Berlin, Cologne, Hanover and many others. In 1911 nearly all the local taxes were superseded by a general Imperial tax levied on the increase in the value of land on sale, allowance being made for expenditure on permanent improvements. The rate was graduated from io%, to 30% of the increase in value, according to the proportion which the latter bore to the cost price plus expenditure on permanent improvements. In 1913, however,

in view of the introduction of the Defence Contribution and Property Tax, the Imperial Government ceased to levy the in crement tax, leaving it to any of the States and communes to continue it locally if they desired. The fact that in Germany the tax was imposed (except for two years) as a local tax and not as a national tax is of some interest in the theory of land values taxation. The increase in value will vary considerably over the whole country according to local conditions, and local land values taxes give the fiscal advantage to the particular area whose local conditions affect the value.

BIBEIocRAPriv.—Annual Reports of the Commissioners of Inland Revenue (in particular 1st, 13th, 28th, 43rd, 48th and 54th) ; Dowell's History of Taxes and Taxation in England (2nd edn. 1888) ; Bourdin's Land Tax (4th edn. 1894) ; W. Kennedy, English Taxation, 1640-1799 (1913) ; Blue Books on Taxation of Land, etc. (Cd. 4750 and 4845) ; Seligman's Essays in Taxation (9th edn. 1921, bibl., Macmillan) ; Report of Select Committee on Land Values, 1920 (Cmd. 556) ; J. D. White, Land Value Policy (1924, United Committee for Taxation of Land Values) ; Commonwealth of Australia, Official Year Books, Annual Reports of Commissioners of Taxation, 4th Report of (Com monwealth) Royal Commission on Taxation (1920) New Zealand, Official Year Books, and Report of Royal Commission on Land S.

Income Taxation (A. L. BE.) United States.—Land taxes were one of the earliest taxes imposed in America but they were not merged into general prop erty taxes until many years after the formation of the Republic. With the adoption of the Federal Constitution, restrictions were placed upon levy of direct taxes so that land taxes have been preserved for use of State and local governments.

With development of general property taxes, land along with improvements and personal property came to be taxed at a uni form rate in jurisdictions levying this tax. This system became the prevailing method of taxation employed by State and local governments. In 1926 the various States received $375,674,160, or 22.7% of their revenues, from this source. The relative im portance of the tax for State purposes has been declining due to the development of other sources of revenue. The cities, however, rely upon the tax for 63.8% of revenues. In 1926, cities of over 30,00o inhabitants collected $1,747,163,136 from this tax. The importance to counties and minor divisions of government is even greater. In 1922 they received 92.1% of revenues from this tax.