THE UNEARNED INCREMENT.

Te Aroha News, Volume XXVII, Issue 43117, 23 July 1907, Page 4

THE UNEARNED INCREMENT.

JJW that discussion is rife on thie unetairaed increments it is interesting; to note how Germany deals with the. question 1 . There the un earned in ere- j meat- is subject to taxation, amd the adoption of this taxation is a recognised part of Germain municipal ad-! ministration. For the purpose of tire' tux, the increment is held to be the excess of the price value on resale or transfer of any real estate over 1 the price or value at the previous transfer, the owner being allowed to deduct all expenditure on permanent improvements. For instance a man who sells for ,£16,000 a block that closb him £IO,OOO, has to pay 10p. j .r cent of the increment, or £6OO, to tha municipality. In Frankfort the authorities take 5 per cent of the increment when it is from 30 to 35 per cent, and an increasing proportion as the increment is greater, until the tax is 10 per cent on increases of 60 pter cent. Generally the maximum proportion of increment taken as taxation is 25 pier cent. In Berlin re c entlv a large plot of land which was originally bought. for £42,500 was .sold lat £BO,OOO, and the municipal treasury received £4875 out of the transaction. Land that is built upon, is usually leps heavily ta|xed than land that is still unused. It. is problematical whether 'New Zealand will ever follow on the lines of Germany though there are many who hold-wand who adduce good argu--1 ments in favor of their contentionthat alt least a certain proportion of the unearned increment should benefit the State and not the individual Wholly. It is pointed out with considerable force that at the present ' time there is no marked desire on ; the part of the people to tax the individfual profit created by want may .be termed the natural advance of the colony, the expenditure of publia monies, and the construction of public works —such as railways, roads and bridges. But if the agitar tiom for the purchase of the freehold at the original value —though that value may now 'be trebled — is continued there may come a. day when fch.€( people as a 'whole will contend that the colonv should share in the benefits that are now accruing to the individual from the unearned increment.