Spencer Heath Archive

Item 726

Pencil notes by Heath on 3X5 cards.

Sometime after 1936?

Original is in item 714.

/TAXATION ON LAND/

     Taxation on land reduces production and the demand for land and so prevents rent and diminishes the amount of rent paid (1) by the direct amount of the taxation, and also (2) by the indirect detriments to production that the taxation imposes on land users. It is a multiple detriment on rent.

     Taxes collected on the supposed or estimated value of unused land must be paid out of the production of the land that is in use. Those also must fall on land users, hence, on the earnings of labor and capital, thus reducing the demand for land and so causing more land to go out of use and less wealth to be produced and less rent to be paid.

     Taxes taken out of rent after it is paid are only a flat deduction from rent. They reduce gross rent to net rent by the amount of the tax only. Such taxation is most favorable to land owners.

     Upon the sale of any land the new owner has discounted all the old taxes on it and pays no taxes on it whatever, unless new ones are imposed. Each succeeding new purchaser takes the land absolutely tax free. No investor in land ever pays any taxes on it except new and unexpected ones. Also all new taxes that are expected or feared will be capitalized against the present owner. New owners will fully discount all present and prospective taxes in the purchase price.