KING  STREET  LAND  TAXES     By JOHN MASSAM
Some owners made improvements to heritage commercial buildings in King Street, Perth, Western Australia, and the tenants protested because the increased property tax was passed on to them. Property tax ought to be on the land value component, not on the buildings or other improvements.
   Revaluations in Perth city, after improvements to King Street had been made, have led to an outcry by business people in that area. The values have gone up, and so have their land taxes. The owners of the land and buildings expect these business people to pay the taxes, and the business people say they can't afford them.
   What is really going on here? (By the way, similar problems have been met all over the world for hundreds of years.) And, why are there empty shops (and offices) in the city, in the suburbs, and even in the country towns? Why do people feel that land rates, and the council rates, are too high?
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   Firstly, most people never stop to notice if they are paying too much Income Tax, Sales Tax, Fuel Tax, etc., etc. Secondly, most of them have probably never considered if the land system needs overhauling. Most people have never wondered if it is fair for landowners to increase rents if the shopkeeper paints and improves the look of the premises.
   In fact, many landlords charge more rent if the shop's takings increase, but very few lower the rent if the takings fall!!
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And, is it fair for Local councils and Parliaments to charge more rates and taxes if there are improvements to a block of land or premises there? Is it fair?

Obviously, it is NOT fair to put a heavier tax on a person who spends money turning a run-down building into an attractive premises. Neither is it fair to allow a person who invests some money on improving the premises to TAKE extra rent, or get a greater Capital Gain, if that person is a Landlord, BUT to allow the landlord and the Local and State Governments all to take money off that person if that person who paid for the renovations is a Tenant!!

How, then, to avoid these problems? Well, progressive councillors and politicians years ago knew that the way to do so was to charge rates and taxes on Unimproved Capital Value of each block of land. Valuers work out what the land would be worth if there was no building or improvements on it, but all the parks, gardens, river, other buildings, the trainlines, bus routes, electricity, etc. were all in place. The result, wherever this operates, is that people who DO SOMETHING TO IMPROVE THE AREA donít have to pay a huge increase. They and their neighbours will probably get a small increase in rates.

HERITAGE BUILDINGS UPGRADED, TAXED MORE _UPGRADED, TAXED MORE

There is a school of thought that, if this principle was applied 100%, and only what is called the economic rent of land was collected by Councils and Governments, all taxes could be taken OFF THE BACKS of WORK and BUSINESS or PROFESSIONAL ACTIVITY. Those who would make the biggest contribution to the PUBLIC PURSE would be those who charge too much rent, AND people who buy or inherit land and whether they do anything with it, will get super profits when the price goes up (and use clever accountants and lawyers to avoid capital gains tax).

Many progressive statesmen and women supported this concept, which is opposed tooth and nail by many Think Tanks, and others whose income depends on donations and grants from the Vested Interests!

And all the empty shops? Well, the income tax laws, and until recent years the lack of Capital Gains Tax, meant that investors could build and build and build, making huge capital gains. For example, the Galleria at Morley was sold recently, two years after construction, and the AIM of the investors was to get 50% profit, though they didn't get that much. The Office block mania of the 1980s has been followed by the Shopping Centre mania of the 1990s.

With taxes falling heaviest on those who do something, and the super-profits going to those who get the best locations to put their money in to, or who just SIT ON LAND WAITING FOR THE PRICE TO RISE, it is no wonder we have empty shops, idle hands (the unemployed), and bankruptcies. __ THE END __

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Progress and Poverty, Cleveland, U.S.A. SINGLE TAX IS SOCIETY'S LIBERATOR, figure of 

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At the turn of the 20th century, the "Single Tax" movement was one of the most vital and influential forces of the progressive era. Single tax Mayors and Legislators were elected in a number of states, most notably Mayor Tom L. Johnson of Cleveland. A statue of Johnson in Cleveland today shows him holding the book that inspired his political career: Progress and Poverty. The Single Tax poster at right was used as an advertisement for The Public, a Chicago Georgist newspaper published by Louis F. Post, the eminent author and advocate who served as Assistant Secretary of Labor in the Wilson Administration.
Pictures and captions by courtesy of   Henry George Institute of New York State, U.S.A.

Find more on: http://www.multiline.com.au/~georgist/lin.htm, or e-mail to: georgist@multiline.com.au, or call at Georgist Education Association, 10 Broome St. (off Douglas Ave., near Canning Hwy., on the 106 bus route), South Perth, some weekdays 11am - 3pm. Telephone (08) 9367 5386 before coming.

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HERITAGE BUILDINGS UPGRADED, TAXED MORE_ UPGRADED, TAXED MORE
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This Page by John Massam 22 Oct 96, created with HTML Assistant© by John Massam 26 October 1996, 2 A4 pages, last revised 12 June 1998
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Authorised: John Charles Massam, Georgist Education Association Inc., 10 Broome St., South Perth, 6151, Western Australia. Tel.: (08) 9367 5386
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