RATES AND BENTS AND TRAM FARES

Evening Post, Volume LXXXV, Issue 34, 10 February 1913, Page 3

RATES AND BENTS AND TRAM FARES

Sir,— >V>u juiclu vita «.« much wisdom " continue to differ iVciu " the law of gravitation ap from the /1»u of rent. The one is not more certain in its opera* tion than tho other. So far us rates fall on houses, mills, factories, shops, nnd warehouses, they are certainly " a palpable factor 111 raiting rents" and forcing up the cost. of living. But, economically speaking, the chr go for the übg of houses, thopK, etc., which is thus increased, and which we ordinarily speak of as " rent," is not really rent at all, but an annual interest charge, based on tho cost of conntruction 01 the houses, shops, and so forth. In economics the ,term "relit' 1 is used only in iegard to the annual charge for the use of the land alone. It mcaiiß, in fact, the annual "unimproved valutf 1 ' of the land, and all economists of standing aro in absolute ngreemeht that any (ax, local or national, on rent— i.e., on j tho unimproved \aluo of land— falls wholly on tho landlord, and cannot be shifted upon anjone else. w It is true that rents have risen eincß lating on unimproved \p lues vas adopted in Wellington. But the rice in rents is 1 duo to the increased population and PiWDcriry of Wellington, not' to rating on unimproved values. It is very cer--tain that, all things being equal— that is to nay, if there had badii no such incroas* in population and prosperity— Ulo rents of Wellington would be lower with rating on unimproved values than they Were before that Rj-Ptem come into force. Or, to put it another way, it is very certain that if the same growth in population and prosperity had taken place without the rating' of 'unimproved values, rente ih Wellington to dtiy would • bo a great deal higher than thoy now are. The reason of this is that a, rate or Jax «m land values tends to force idjo land into the market. The heavier tHe "Ate or tax on unimproved values, the more idle land is forced into the market, and tho lower vents and prices wall be. _ To reduce (nun fines? by putting tho interest ami pinking fund charges for the trumwuv loahs on unimpro\od vnhuw will, therefore, tni'Rii, nol 1 only lower ti'ahi fares but rlpo lower rent". I have just returned from Napier, and while there I found that the mcio circulation in Napier of a petition for a poll to Hilopl rating on ininnpi'o\eil values is getting on tho nerves of tho epeculatorn pud causing them to cuf up their blocks of idle land and offer Ihoin for sale. — L oni, etc., ARTHUR WITHY. Wellington, 31it Jatiuarj*. fOn our correspondent's own showi'tip tho tax 011 unimproved vqlucr oijlv opeiates to reduce rents, when there is unused land adjacent, while the method by which ho w;ould reduce tram faro-* you d be simply robbing Potcr to pay Paul; that is to say, by diverting re\omie from general to ft special pur.