Spencer Heath Archive

Item 2510

Five typed pages by Miss Frances Alice Norton (later Frances Norton Manning), acting as publicist for Heath, containing Heath’s commentary on an article by Dorothy Rosenman in House Beautiful for February, 1945

 

 

From House Beautiful February, 1945

Page 54

by Dorothy Rosenman

Chairman:- National Committee on Housing

Author- “A Million Homes A Year”

Article:- Property Taxes Are No Sneezing Matter

 

Miss Norton asked Mr. Heath to read the above article by Dorothy Rosenman and make his analysis and comments. The comments follow:-

 

 

“As one who for some years has pondered the whole subject of public income and the evils incident to its forcible collection, by the familiar processes of taxation, I’m eager to commend your keen and comprehensive article on the subject of Real Property taxation, appearing in the House Beautiful for February.

In this admirable article you state the critical situation that has developed, and you discuss the merits and objections to some eight palliative measures, and finally conclude that ‘There must be a sweeping change in the method of taxing property, plus a means of supplementing the municipal income.’

 It is here that I would propose the possibility of a new, broader and wholly constructive policy of public revenue – neither defensive or palliative – for the preservation of Real Estate values, against the burden of what we have no choice but to accept as public services.

 What is contemplated is the actual performance, of

essential public services, by the appropriate Real Estate interests, itself.

 For the purpose of inducing new revenues to itself, in recompense for the new services performed, and thus building up entire new values instead of trying merely to preserve those that exist.

There should not be, nor is there, in principle, any essential difference in the conduct of different kinds of community business. All such services differ from other businesses and services in nothing but that they are supplied, not to a special and limited clientele but to the population in general, and by common participation of all the established occupants of the community, including all others present and sustaining social or business relationship.

By this description, a geographic or municipal community does not essentially differ, except by its larger size, from a Hotel or other business property, that affords occupancy and common services to whatever population (however changing) is contained within the physical bounds. There are, indeed, municipal communities having smaller population than those contained in large Hotel or Apartment properties and other business properties of a community kind.

Unless a community – a place on the earth – is property, there is no one in position to be recompensed voluntarily for the services, the common services, with which the community is in any manner supplied. All business communities have owners, and it is the recognized function of the owners to distribute among the occupants, whatever advantages of living, or of doing business the community may afford. This they do by the free and voluntary process of making contracts with the occupants whereby each becomes possessed of that portion of the property that he most desires and in or on which he can most efficiently and abundantly produce. And, beyond this condition of occupancy by voluntary contract, it is also the obvious function of the owners to maintain all the advantages and services appertaining to their community property, to extend the existing services and, as time goes on, to provide new ones, all in accordance with the growing wealth, numbers and needs of the occupants and inhabitants. All of this is quite commonplace, in the successful ownership and administration of community properties of the usually more restricted type. These properties within their limited confines, afford to their occupants, most (if not all) of what are treated as public or Governmental services in political communities — such as physical security , water and drainage, horizontal and vertical transportation, and recreational and cultural facilities of many kinds.

Yet, those properties must, and do, receive their ample or at least sufficient revenues through none but the voluntary contractual obligations of their several occupants. Their entire administration is conducted without resort to violence, or coercion of any kind, on the part of the owners who administer them. And if violence or fraud should be attempted by any of these community servants or employees, the community owners are quick to prevent or punish this and they do this as a service to their occupants and for the preservation of their income and the values of their property.”

 

(The above was dictated by Spencer Heath from written notes. I now relate verbal discussion upon his rereading the article by Dorothy Rosenman.)

 

 “She makes the usual analysis and objections, to the matter of taxation and in the end is inconclusive. This was to be expected from anyone attacking the subject on the surface. She realizes toward the end of her article there must be something more fundamental than anything thus far proposed. She concludes that municipal revenues must be raised /in some/ other manner or from some other source.

She criticizes the whole situation as it is, and she is not able to definitely endorse any of the remedies proposed. These remedies are old hashed over morsels, chawed to pieces for years. She virtually says there’s not much hope in any of them. She really does nothing about it.

Now, if we were to point out to Dorothy Rosenman the sanity of an entirely new orientation of thought along the lines of public service administration (its wider than mere Taxation) is required.

If public services were formed in a practical manner as other services are, they would make money. (Money for those who performed them) And this money would be the natural support for the public services performed. It happens when any business makes money, it must make it for the owners of the business. It cannot make it for anyone else. A peculiarity of the public business is that it is unlike other community enterprises /in that/ it is not conducted by the community owners. For instance, take fire protection, water, police, transportation — these are public services. They are not performed by the community owners. At the present time we have political organizations seizing the properties through taxation to provide the funds to maintain these community needs. This destroys the values of all property. If it were service like other services, it would create values and have its own income. If the owners of the community now suffering under these deprivations would undertake on their own account, to perform some of these community services without robbing their customers, then these services would create new values. The increased desirability of the community would be reflected in its real estate value. Take the water works, the present method is for the politicians, to seize the property and destroy the security. If and when the water is produced, the community will be fortunate if it has any advantages from the water service in excess of the disadvantages it has suffered from the manner (unbusinesslike) the services have been provided. The real estate and other values of the community will have been so depressed by the direct and indirect effects of taxation that the advantage of having the water works in the community is in the long run not sufficient, to overcome the depression of values.

1.  Small town. One water works.
2.  Water is needed.

3- Under the department of public works, and under the supervision of Public administration the water works are built.

4- The public servants appointed in charge of Public works do not put up the money. The people living in the town put up the money. This money is acquired by the appointed employees of the public servants by seizing the funds of the people and forcing them to pay.

5- The water works are in the town, but the people have water but are minus money and become less secure as taxes eat into their income.

6- The constructive picture is to have the owners of the town (The Real Estate and Property Owners and especially the unimproved Real Estate) get together /and/ voluntarily provide water service. They should pay for it themselves.

  

7- This would logically and necessarily result in the real

estate values and rentals /being/ higher and bid up by those

residing there and those wanting to reside there. The higher

rentals and value increase replaces what would have been heavy

taxation on lower values and cheap rentals.