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Collection: The Collected Works of John Stuart Mill

95.: Local Charges on Real Property 12 MAY, 1868 - John Stuart Mill, The Collected Works of John Stuart Mill, Volume XXVIII The Collected Works of John Stuart Mill, Volume XXVIII - Public and Parliamentary Speeches Part I November 1850 - November 1868 [1850]

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The Collected Works of John Stuart Mill, Volume XXVIII - Public and Parliamentary Speeches Part I November 1850 - November 1868, ed. John M. Robson and Bruce L. Kinzer (Toronto: University of Toronto Press, London: Routledge and Kegan Paul, 1988).

Part of: Collected Works of John Stuart Mill, in 33 vols.

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95.

Local Charges on Real Property

12 MAY, 1868

PD, 3rd ser., Vol. 192, cols. 152–4. Reported in The Times, 13 May, p. 7, from which the variant is taken. The debate, in Committee, was on a resolution by Lopes Massey Lopes (1818–1908), M.P. for Westbury: “That, inasmuch as the Local Charges on Real Property have of late years much increased and are annually increasing, it is neither just nor politic that all these burdens should be levied exclusively from this description of property”

(col. 145).

mr. j. stuart mill said, the honourable Baronet who had introduced the Motion (Sir Massey Lopes) had rendered a real service to the House and the country, for no one who had considered the subject could doubt that it required a much more systematic and deliberate consideration than it had yet received, not only on account of its great importance and the amount of taxation it involved, but because its importance was constantly increasing. In the natural progress of things more and more duties were continually being imposed on the Government, which duties would be almost always best performed by the localities, and at the same time, as the taxation of localities must constantly increase in order to meet increasing expenses, if there was any injustice in this taxation it must be an increasing injustice. The honourable Baronet, and those who took his view, thought that the local taxation was entirely borne by real property; but he (Mr. Stuart Mill) conceived that although real property bore an extra proportion of that taxation, it by no means bore the whole. The local charges consisted of two parts, one of which was proportional to the rent of land, and was therefore equivalent to a tax on land, the other was proportional to the rent of houses, and equivalent to a house tax. Now, a house tax did not fall on the owner, but on the occupier, and within moderate bounds was one of the fairest of all possible taxes, and one of those that came nearest to a perfectly fair income tax. Indeed, the house rent a person was able to pay was probably a better measure of what he could afford to spend, than could be afforded by the mere numerical amount in pounds sterling of his income. So far as the house tax fell on the ground rent it was a charge on property; but the ground rent bore only a small proportion to the whole rent of a house, except in cases of peculiar eligibility of situation, which favourable situations were a kind of wealth having a constant tendency to increase without any labour or outlay on the part of the owner, and therefore a fair subject for some degree of special taxation. He admitted that in most of the rural districts the burden was mainly on the rent of land; but he did not think the grievance so great as had been represented, because the prescriptive, and what might almost be called the constitutional mode of levying local taxation was to levy it on rental, and property had generally been acquired by inheritance or purchase, subject to that peculiar burden. If the burdens on land had a tendency to increase by the progress of apopulation, wealth, and civilizationa , so had the income from land, and income derived from real property was nearly the only one which increased by the effects of the industry, outlay, privation, and frugality of other persons than the owners; and inasmuch as the value of land did constantly increase from generation to generation, and the income from it increased independently of exertion or outlay on the part of the owners, this made it fair to regard it as in some degree a proper subject for increasing taxation. No one could doubt that the time had come when the whole subject of local taxation must be more fully considered. If they considered that portion of taxation which he thought fair in principle—namely, the house tax—they would find that this had become so heavy in many localities that the difficulty of increasing it had become a serious obstacle to any new outlay for general improvements. How it was possible to raise the additional sums that might be required in a manner less burdensome, because more equal and just, would have to be more and more seriously considered, and the different modes by which this could be accomplished would have to be well meditated. One mode, which had been partially adopted in this country, deserved consideration as one of the possible modes—namely, that of placing a certain proportion of some of these burdens on the general taxation of the country; for when this was done in the way of a fixed proportion it did not destroy, although it might weaken, those motives to economical legislation which so strongly recommended making these expenses local rather than general. There were great difficulties in adjusting the amounts of taxation on the various descriptions of property, and these questions would probably occupy their minds for a long time to come. He was glad that the honourable Baronet had introduced this subject to the House, and no doubt it would be seriously considered by the new Parliament. In the excellent speech of the honourable Member for Edinburgh (Mr. M’Laren) there was one principle which, if adopted, would involve an injustice—it was that of taxing terminable incomes, he did not mean at a lower rate than permanent ones, for that he entirely approved of, but of taxing them only according to their capitalized value.1 That would be a great injustice; but this was not the time for further discussing that principle.

[The motion was withdrawn (col. 161).]

[a-a]TT] PD society

[1 ]Duncan McLaren (1800–86), M.P. for Edinburgh, col. 147.