fXI ii(^ MUNICIPAL TAXATION AT HOME AND ABROAD. jy^' ^ C"^ ,5-- MUlNICIPAL TAXATION AT HOME AND A LOCAL GOVERNMENT— mB;^B^B:(nmE&SS3 AND VALUATION. JFi//i Statistiis rclaling to the rrincipal Alitiiicipaliiies of the World. J. J. O'MEARA, iOLICITOR. CASSELL AND COMPANY, Limited LONDON, PARIS &f MELBOURNE. 1894 [all rights reserved.] H-.r yss- PREFACE. *2 " No one ought to feel discouraged from endeavouring to show T 1 1 c/i if, after full consideration of the subject, he feels convinced that ^ many taxes might be reduced, and many repealed, without any oc risk with respect to securing a sufficient revenue for all the ^ services of the State." — Sir H. Parnell on Financial Reform, The publication of this work is due to the importance of the subject of which it treats, and ^ to which it earnestly invites attention. So many "^ interests are involved in the question of Munici- t pal Taxation, that every attempt to promote dis- cussion respecting it is entitled to indulgent consideration. A local debt of over two hun- dred millions sterling, and the ever-increasing ^g demands of our municipal institutions, do not o warrant the citizens of the United Kingdom in •a; ^ passing carelessly over our municipal budgets, 388297 vi PREFACE. and neglecting to examine the sources from whence the supplies are levied. One of the peculiarities of our forms of local government is that those who should be, and ultimately are, most interested in them, fail in the inclination to study their " ways and means," although they have to meet the demands of the budgets, and the budgets are the summary of the conditions and possibilities of municipal life. Ratepayers should familiarise themselves with the machinery of government, rather than with the government of the machine. With this object I shall first endeavour to put every man, who will fairly and earnestly enter into the inquiry, in possession of a general knowledge of those systems of levying local supplies which affect the United Kingdom, and to show the real cause of the discontent existing among those upon whom the incidence of the local rates is placed. I shall then point out the most favourable way in which, in my opinion, PREFACE. Vll extended and permanent relief can be adminis- tered, and a more equitable system adopted. I shall also give a general view of the systems adopted in the various European countries, and in the United States of America, for the purpose of comparison, so that the result of the work of the world's economists may be more easily seen. As regards the statistics given in reference to these latter, while every care has been taken in obtaining the figures from the various foreign sources, perfect accuracy cannot be guaranteed ; yet I consider them sufficiently reliable to effect the object for which they are intended. I tender to Her Majesty's Consuls through- out Europe my grateful acknowledgments for their extreme courtesy and kindness in supplying me with the various items of information which I sought from them. I would invite my readers to reflect dispas- sionately upon the injustice of our present system of taxation and its inequitable incidence, in the vni • PREFACE. earnest hope that they will not remain wilfully blind to the crisis that must inevitably follow its continuance, but that they will see the expedi- ency and justice of the remedies I propose, and have the honesty and courage to advocate them. J. J. O'Meara. Lr. Mount Street, Dublin, iSg^. CONTENTS. Preface Chapter I. — Local Government and Indebtedness. Division of government — Limitation of functions of minor grades— Local government — The English ideal — Its objects — Athenian citizenship — Civic duty — Functions of municipal authorities — Their effect — Nature and object of borrowing powers — Growth of local debt — England, Scotland, and Ireland — Urban versus rural — Purposes for which loans were utilised — Their classification — Manner of repayment of loans — Municipal Stock — Its advantages — Table of municipal stocks — Chief centres of employment of municipal credit — Population and in- debtedness of our principal municipalities — Like tendency exists abroad — Population and indebtedness of principal European cities — Also in United States — Cause of local indebtedness ........ Chapter II.— Taxaiign and its Incidence. Taxation — Sources of Municipal revenue — Original and de- rivative — Special and general taxatior. — Direct and in- CONTENTS. PAGE direct taxation — Their meanings — Adam Smith — Taxation maxims — Imperial and local taxation — Nature of local taxes — Source from whence derived — Relative percent- ages in England, Scotland, and Ireland — Increase of local taxation not proportionate to development of property assessed — Comparisons— Property exempt from local taxes — Marquis of Salisbury — Demand for taxation of personalty — Local works benefit all classes of pro- perty — Old Scottish system of assessment, " means and substance " — Mr. Lamond's criticism on abolition of system — Taxation should be just — All should bear expenses of Government ...... 30 Chapter III.— Valuation of Property. Mode of valuation of real property in England — Rateable value — Gross estimated rental— Actual rent the criterion of value adopted — Not conclusive — Mode of valuation in Scotland — Property rateable — Rent-roll not just criterion — Committee on rating and valuation — Uniformity absent in England and Scotland — Classification of land in Scotland — Different method of valuation in Ireland — Rateable hereditaments — Essentials necessary to value land, etc. — Favourable adoption of Irish system — Its uniformity — Exceptions therefrom — Exemption from rateability — Easements in England and Ireland — Machinery — Absence of uniformity in English method — Its non-adoption by Imperial Government — Comparisons — Common measure of valuation . . . . .56 CONTENTS. XI PACiE Chapter IV. — Occupier and Owner. Incidence of local taxation as it affects the person assessed in England and Ireland — The occupier — Immediate lessor — Incidence different in Scotland — Occupier and owner — Classification of occupiers' liability — Deductions from occupiers' payments — Compounding — Rent increased by compounding — Occupation — Unoccupied premises — Occupiers' disabilities — Town holdings committee- Recommendations — Committee on local taxation, 1870 — Recommendations, Committee of 1878 — Recommenda- tions — Existing and future contracts — Betterment — Oc- cupiers' primary responsibility for certain rates — Salutary effect of division of liability . .... .90 Chapter V. — Suggested Reforms. Amount of local taxation not complained of — Its incidence is — Suggested reforms — Imperial probate — Succession, legacy, etc., duty — Property respectively liable to each — Municipal probate duty — Equity of — Imperial income tax — Income liable under each schedule — Permanent and precarious incomes— Cobden — Mr. Chamberlain, M.P. — Graduated and progressive tax — Arguments in favour of — Municipal income tax — Equity of ... . Chapter VI. — Municipal Taxation Abroad. United States of America. Real and personal property — Method of assessment — Tax roll — Valuation of land — Various standards of value — Xll CONTENTS. PAGE Interests nssessed — Description in tax roll — Personal property — Definition — How ascertained — Evasion of Assessment — Examples — Comparison of State and local taxes — Poll taxes — Income tax — Miscellaneous — Collec- tion — Sale of real property for non-payment — Procedure — Equalisation of assessment — Boards of equalisation — Betterment — Its principles — Assessed only on real pro- perty — Charge on land — Not on owner — Collection . 131 Chapter VII. — France. Division of territory — Local Government — Exceptional posi- tion of Paris — Taxation system — Centimes additionnels — Ordinary centimes — Extraordinary centimes — Special centimes — Contribution fonciere — Lands and buildings — Valuation — Contribution personnelle et mobiliere — Poll tax — Inhabited house-tax — Door and window tax — Contribution des patentes — Trades licence tax — Divisions of trades and professions — Proportionate tax — Dog tax — Octroi — Its disadvantages — Miscellaneous sources of revenue — Exanq)les in Nantes— Assessment authority — Collection — Criticism on Fiench taxation — Land and building laws — Tenure ....... 160 CHAPTEii VIII. — Germany. Prussia — Local Government — Surtaxes — State taxes— Land tax — Classification of land — Valuation — House tax — Classillcalioii — \'aluation — Class tax — Classification CONTENTS. Xlll PAGE — Graded income tax — Classification — Mode of assess- ment — Trade Licence tax — Local taxation in Berlin — Frankfort-on- Maine — Land and building laws — Tenure — Wiirtemberg — Local taxation in Stuttgart — Saxony — Local taxation in Dresden — House-rent tax — ^J. S. Mill — Progressive income tax — -Low limit of — Taxation in Leipzig — In Chemnitz — Bavaria — Taxation in — Land tax — Valuation — House tax — Areal tax — Free ports — Fiscal methods different from other German common- wealths — Hamburg — Local taxation — Collection — Bremen — Local Taxation . . . . . .186 Chapter IK. — Austria. Basis of local taxation — Land tax — Collection — House tax — Its two divisions — House-rent tax — House class tax — Mode of assessment — Abatements — Licence tax — Classi- fication — Mode of assessment — Exemptions — Income tax — Classification — Miscellaneous taxes in Vienna — Criticism of Austrian taxation — United States Consul on taxation in Vienna ........ 2li Chapter X. — Switzerland. Fiscal system — Federal revenue — Direct cantonal taxation — Classification of lands and houses — Ground tax — Valuation — Exemptions from property tax — Capital tax — Assessment of personal property — Income tax — Classi- XIV CONTENTS. PAGE fication — Abatement — Indirect cantonal taxation — Its vai'ious forms — Communal taxation — Its various forms — Deductions not permitted in communal returns — Can- tonal taxation in Ziiricli — Its democratic and progressive tendency — Property tax — Income tax — Citizenship tax — Communal taxation in Zurich — Who are taxed — Tenure of lands and buildings — Freedom of control — Irredeem- able payments for land not admissible .... 232 Chapter XI. — Belgium, Netherlands, Denmark. Belgium — Basis of local taxation — Stale taxes — Rental tax — Window and door tax — Furniture tax — -Servants' tax — Horse tax — Licence tax — Tariff and classification — Local taxation in Brussels — Collection — Tenure of dwellings — Netherlands — Basis of local taxation — Land tax — Per- sonal tax — Licence tax — Miscellaneous taxes — Tenure of buildings — Denmark — Local taxation in Copenhagen Local income tax — Real estate tax — Its divisions — General ground and areal taxes — Paving tax . . . 247 Chapter XII.— Italy. Taxation system— Communal powers— Supplementary taxes- Land tax — Buildings tax— Other communal taxes — Taxes discretionary to the communes — Their various forms- Communal dues— Octroi— Collection— Farming collec- tion — Tenure— Right to redeem rent . . . .261 CONTENTS. XV I'AGE Chapter XIII. — Sweden and Norway. Taxation system — Division of real estate — Income tax — "Bevillning" tax — Mode of assessment — Church tax — Same per capita — Provincial liquor licensing tax — Its allocation — Exemption of personal property — Military burdens — Tenure — Norway — Political independence — Taxation — Tenure and property in buildings . . . 274 Chapter XIV. — Russia, Poland, Spain, Turkey, and Greece. Russia and Poland — Imperial Taxation — Communal system — Cantonal system — Taxation in Warsaw — Tax on im- movable property — Hearth tax — Industry tax — Hackney coach tax — Excise tax — Miscellaneous taxes — Tenure of lands and buildings — Spain — Novel fiscal system — Mode of assessment — Consumers' tax — Turkey — Difficulties in connection with- — Greece — Retrogression — Taxation of PirKus ......... , 283 Appendix I. Taxation of land and buildings in British colonies . . . 297 Appendix II. Table of the financial condition and resources of the principal municipalities of the world in 189 1 compiled from answers to queries submitted by author . . .311 MUNICIPAL TAXATION. CHAPTER I. LOCAL GOVERNMENT AND INDEBTEDNESS. All civilised countries have their systems of Local Government. In all, the sovereign authority confers upon minor grades of government the duty of giving effect to its ordinances, and the power to administer within certain limits the public affairs of the community over which they preside. Such minor grades of government arc various. Wherever civic liberty obtains, the form of such minor grade is accommodated to the opinions of the com- munity : whatever that community may prefer, and such institutions so established as to facilitate admission of alterations, as greater light and knowledge become diffused. The decentralising temper of the age is en- croaching more and more upon the domain of the supreme authority, yet the equilibrium which these countries have constantly maintained between local and central government is one of the chief securities upon which our constitution rests. The limit of legal right to exercise sovereign B 5 JMUNICIPAL TAXATION powers is found in the special functions assigned to each such minor grade of government. Should any of them undertake duties outside those as- signed to them, they are acting illegally ; for, in so doing, they encroach either upon the jurisdiction of one of the other grades of government, or upon the domain of activity which Parliament, the supreme authority, by failure to enumerate in any of its grants of power, have thereby declared shall not be entered upon by such public authority. The harmony of such institutions is, in con- sequence, found in the public law, which assigns duties to those bodies which it creates, while at the same time it limits their activity to the performance of the duties assigned. Towns have their Municipal Corporations, and the inhabitants of rural districts have likewise some measure of autonomy ; and between all, re- lations necessarily exist which affect the persons governed and their property. The nature of our constitution, particularly of those parts which relate to the municipal institution, cannot but be a subject of interest at the present time, when changes are every year effected. By means of these institutions, towns and boroughs are capable of being made the greatest blessings to the country, as they are the neces- sary consequence of great masses of population AT HOME AND ABROAD. 3 collected together in particular spots, for the good government of whom they afford the readiest means. The confirming, improving and simpli- fying these institutions according to the best and safest principles, should be the practical object of the statesman, patriot, and legislator. Advocates of Local Government reform seek to establish a graduated system in which every citizen, with the slightest capacity for public affairs, and desire to employ it, should be able to take his share in local administration ; a system ex- tending from the parish to the kingdom ; a system of orderly subordination of authority to authority ; a system free from intricacy, and such as to leave full scope for the development of the interests of each locality by the men best qualified to under- stand them ; a system of local independence, subject only to the control necessary to preserve imperial unity ; a system which would attract the energies of the best men in each district. The ideal which obtains in the United Kingdom is thus summarised by Mr. Chamberlain, M.P. : " The leading idea of the English system may be said to be that of a joint-stock or co-operative enterprise in which every citizen is a shareholder, and of which the dividends are receivable in the improved health and the increase in the comfort and happiness of the community. B 2 4 MUNICIPAL TAXATION " The members of the council are the directors of this great business, and their fees consist in the confidence, the consideration, and the gratitude of those amongst whom they Hve. In no other undertaking, whether philanthropic or commercial, are the returns more speedy, more manifest, or more beneficial. In Birmingham, for example, the initiative of the unpaid members of the council, and their supervision of the loyal and assiduous labours of the paid officials, have been the means of saving the lives of more than 3,000 persons in a single year ; and, inasmuch as for a single death many cases of illness not actually fatal may be reckoned, it is easy to see what a mass of human suffering has been lightened, and how much misery has been prevented. Under these circumstances, the primary object of all concerned is not so much to lessen expenditure as to spend most wisely and to invest the money of the community in such a way as to secure continuously equally satisfactory results in the condition of the people. " This is the ideal at the present time ; but of one thing we may be certain. If ever the principles of action should change — if the best men should be so occupied with their own fortunes that they should leave the care of the commonwealth to those who will see in this duty only an opportunity for plunder — if ofiice is sought, not for the good AT HOME AND ABROAD. 5 which can be done, but for the political patronage it may afford — if paid officials lose their pride in their work and their loyalty to the public that employs them — if incapacity is overlooked and corruption is condoned — then, if those things happen — the dignity, the efficiency, and the economy of our public service will all disappear, and the institution of local government, so long our pride and our glory, will be discredited in the eyes of the people, and will become a by-word and a reproach." To exist as a nation implies the being bound together in an association or league, or into a series of associations or leagues, for the promotion of some positive ends. The diffusion of intelli- gence, the development of health and whatever else contributes to the formation of manliness of character; the extension of trade and the happiness of the people ; the exaltation of the national name, honour, power, and greatness ; the maintenance and advancement, in a word, of the civilisation of the country — these are amongst the prime func- tions and purposes which belong to a proper political organisation. The obligations resting upon a State are ex- tensive and multifarious, as are the powers in- herent in that assemblage of numbers to which it owes its origin ; and the functions with which it is 6 MUNICIPAL TAXATION endowed, and which, from time to time, are dele- gated to its minor organisations, ought to be of the same high order with the duties it is called upon to perform. Its institutions should make provision for the most effective training and application of all the better tendencies of society, and they should be invested with the means of concentrating and calling up into exercise all the public spirit and patriotism that exists in the community. An indentity of interest exists between our cities and the nation. In the distant past, in- dividual liberty found its bulwark in the Greek cities. In every age of the world, in every great time, and among every great people, the hopes of men and women who have looked forward into the coming future of their country have gathered round the idea of a great and beautiful city. It was so in ancient Greece. In the glorious times of Pericles the idea of a beautiful and ennobled Athens was the living inspiration of the heroes of Attica — Athens, honoured among men for its healthy and prosperous people, and, above all, for the idea of civic unity which animated the lives of the whole population. It was not a man or two, nor a leader here or there — it was the whole population which itself constituted Athens, and inspired every man of them with the dignity of Athenian citizenship. AT HOME AND ABROAD. 7 Throughout the world it has ahvays been the cities that led in the rising struggle for individual freedom and happiness which have given modern history its character. We may not have all the incentives which lead some to personify their cities ; but when we con- sider the importance of our own, the increasing drift of the rural population into them, the magnitude of the interests, material as well as political, which hang upon their development, and the possible influence which their failure could exert upon the future history of our country, we must believe that the field for the exercise of the duties of citizenship is wide, and that nothing is more desirable for our social development and political peace than the growth of an intelligent devotion of each citizen to his own city, and a personal active interest in its healthy and honour- able development. More implicitly does a man serve his country by looking upon such duties as his personal service, and by recognising the fact that all great ends are attained by means of individual exertion in the first place, and by union and co-operation in the next. Whatever the form of the minor grade of government may be — municipal corporations, County Councils, Grand Juries, or Boards of 8 MUNICIPAL TAXATION Guardians, or boards of greater or lesser degree — whether one or more bodies, within the same area, direct the various objects of pubHc utihty, all are the creatures of the State, and wholly under its control. They are created by law, general or special, or by charter, and find in such law or charter the limit of both their duties, privileges, and responsibilities. According to the accepted theory of law, a municipality performs nothing for itself, but in caring for local affairs it performs a gratuitous service to the State. This theory gives colour to all contracts of inferior governments, but the character of sovereignty cannot attach to its promises or obligations, as it is the creature of the Imperial Legislature, and acts as the agent of the State. Thus it is universally provided that muni- cipalities maybe sued and made defendants in civil suits. The purposes for which local authorities have employed their public credit are peculiar to the position which they hold in the general structure of government, and the rules by which their trea- suries should be managed are shaped by the peculiar duties imposed. These duties are various, and are of ever-increasing importance. The special functions of municipal authorities may be broadly summed up as follows : — The enactment of bye- laws, and appointment, payment, and dismissal of AT HOME AND ABROAD. 9 all necessary public officers and servants ; making, naming, maintaining, cleansing, lighting, watering, and general regulation of roads and streets ; pro- vision for an efficient system of drainage, and removal and disposal of sewage and house refuse ; the contribution towards the maintenance of lunatic asylums, hospitals, prisons, industrial schools, and court-houses ; the care of the public health, includ- ing the inspection and regulation of lodging-houses, the removal of nuisances, the enforcement of the adulteration acts, and the provision of special hospitals for infectious cases, and of the means of disinfecting unclean houses ; the provision of means of cleanliness and recreation, such as baths, wash-houses, parks, and pleasure-grounds ; the supply of light and water ; maintenance and con- trol of markets, fairs, abattoirs, and regulation of weights and measures ; establishment and main- tenance of free libraries, museums, and art and technical schools, and of all public buildings necessary to local administration ; the control and management of the City estate, and the levy and collection of rates when such property is not sufficient to meet the public expenses ; the exe- cution of sanitary and other powers under the Public Health Acts ; the execution of schemes under the Working-Classes' Dwellings Acts of sanitary improvement for the purpose of benefiting lO MUNICIPAL TAXATION the condition of the poorer class of residents ; the appointment and supervision of poHce and fire brigades ; the superintendence and enforcement of educational regulations ; the provision for facili- ties in traffic, and enforcement of the regulations in connection therewith ; and generally in the management of all those things which locally affect the community. Within these limits local administration is of much service to the com- munity. It brings into play local knowledge of its requirements. It stirs the inhabitants of the locality into an interest in public matters ; it gives them training in practical business, in controlling expenditure, and in exercising some measure of responsibility for their collective acts. In all these functions, also, its teaching is more effective because they are under the review of the technical officers of the central government, who keep them within the strict fence of the power delegated to them by the public or local statutes, but whose supervision and control is entirely compatible with local freedom. To carry out those duties borrowing powers are conferred upon local authorities, which they may exercise in various ways should the revenue from the property of the community be insufficient to defray the expenses incurred. They may borrow in the open market, either in the mode AT HOME AND ABROAD. II prescribed by the Act conferring the powers, or under the provisions of the Local Loans Act, and either with or without the sanction of any Government department. They may also borrow from the Government itself through its Public Works department. Most of the loans are raised on the security of the rates levied by the local authority ; but under the Municipal Corporations and certain other Acts, loans may be borrowed on the security of land and other property belonging to such authority. Loans raised for gas, water, market, harbour, and the like undertakings, by a rating authority, are usually charged on the revenues of the undertaking, with the rates as a collateral security in case of deficiency. In municipalities, new borrowing powers secure money for new purposes, while existing taxes expunge old debts. Most local debts are contracted for some definite purpose, and their proceeds are employed in such a manner as to establish in the com- munity some particular form of public service ; it is natural, therefore, that the expungement of a local debt should conform to the manner in which its funds were invested. For example : Suppose capital to be borrowed for the purpose of paving streets or providing a sewage scheme, the service thus rendered is common to all 12 MUNICIPAL TAXATION members of the community, but of such a nature that the debt must rest upon taxes. But, what is of more importance, the local council cannot proceed as though the City would never be called upon to repeat its expenditure, for pavement and sewerage are subject to wear, and must sooner or later be replaced by new systems. From this it must appear that the payment of a local debt is not to be determined by the general industrial conditions of the country, but that sound policy demands the repayment of existing obligations before the public authorities find it necessary to borrow fresh capital for new improvements. But should the investment be of a permanent nature, it obviates the necessity of clearing off accounts before a similar expenditure of fresh money is required. It is of importance that the rate of taxation should not be changed with unnecessary rapidity, either by the rapid rise in tax rates, or by the rapid fall after the repayment has been accomplished. All loans must be applied strictly for the pur- poses for which they are raised, and as a check upon extravagant expenditure by the local au- thority, the power to mortgage the local rates for certain purposes is limited. Local debts have now, however, assumed such dimensions that they cannot be left out of account AT HOME AND ABROAD. 1 3 in estimating the burdens which have been im- posed on the property from which the local rates are derived. It is true that a portion of them — e.g., the greater portions of the loans of harbour, pier, and dock authorities — are not wholly charged on the rates. A further portion, consisting of the loans raised for the purposes of water-works, gas works, electric light works, markets, etc., and other undertakings producing revenue, is secured, as before stated, in many cases primarily on the revenues of the undertakings in respect of which it has been raised, and constitutes a charge on the rates only to the extent to which those revenues may be found insufficient to meet the repayment of the principal and interest. But, after allowing for these loans, about half of the gross debt falls directly on the rates, which have not only to bear the interest, but also to provide for the repayment of the principal within a pre- scribed period. It represents, therefore, a liability which for many years to come will have to be met by the ratepayers of the future, and its continuous increase of recent years forbids the hope that the properties which bear the rates, mortgaged to secure its repayment, will, within any measurable distance of time, be relieved from the additional local taxation which it has imposed on them. These considerations point 14 MUNICIPAL TAXATION to the necessity of ascertaining what proportions of so much of the debt as is charged on the rates will have to be repaid by urban and rural ratepayers in the United Kingdom respectively. ENGLAND. n 1 TT 1 T-. 1 4 Partly Urban and n i n i Purely Urban Debt. x, ■',, r> i Purely Rural. •' Partly Rural. ' ;^i83,9t5,i89 ... ^13,393,410 ••• ^3,906,859 SCOTLAND. In Scotland the rural debt is not separated from the urban debt, in consequence of the areas overlapping. In 1891 the debt of the several burghs amounted to ^i 1,575,644, and that of the burghs under the Roads and Bridges Act ;^4i 3,050, making a total of ;^ 11,988,698 municipal liabilities. If to this we add the other liabilities secured upon the rates — viz. : Harbour Authorities, ^9,229,842 ; Parochial Boards, ^362,481; and Ecclesiastical Boards, ^14,902— we have the grand total of ii's 1, 595.923- IRELAND. In Ireland the various local Municipal Authori- ties owed at the end of the year 1890 the sum of j^ 3,887,326, to which, if we add the debt due by the Harbour Authorities on the same date, the Urban Municipal and Harbour debt will amount to ^6,352,516. No returns appear to be published AT HOME AND ABROAD. 1 5 of the Rural indebtedness, or that of the Urban Poor Law indebtedness. From the purely Urban debt, the debt of Harbour and Dock Authorities, amounting to ^30,958,246 for England, ;^9,229,842 for Scotland, and ^2,465,190 for Ireland, must be deducted in order to arrive at the debt charged directly or as collateral security on the rates. The purely Urban debt, so charged, was therefore ;^ 1 52,956,943 for England, ;^ 12,366,081 for the Municipal, Parochial, and Ecclesiastical debt in Scotland, and ;^ 3,887,326 for Urban Municipal debt in Ireland. The proportion which the debt bears to the rateable values of the areas in respect of which it has been incurred varies greatly in different localities. When the rateable value and the debt of a particular district has been ascertained, this information of itself by no means shows the amount of the burden falling on the ratepayers in respect of such debt. To ascertain this, it is neces- sary to discover the extent to which the debt is covered by revenues other than rates. At the same time the proportion which the debt bears to the rateable valuation is a very important element in considering what is the local burden. In Eng- land the rateable valuation of purely urban dis- tricts is ^^98,837,72 1 ; of partly urban and partly rural districts, ^^120,519,112 ; and of purely rural l6 MUNICIPAL TAXATION districts, ^^53, 278, 287. In Scotland the rateable valuation of purely urban districts is ^12,518,192, and of purely rural districts £11,406,6^0. In Ire- land the rateable valuation of the municipal dis- tricts is ^3,044,796. These figures, especially as regards England, indicate the extent to which the Local Debt presses on the urban as compared with the rural districts. Can we distinguish the various purposes for which loans have been raised by local authorities, and show the amounts owing in respect of each purpose ? For answer to this inquiry we are obliged to rely upon the data furnished by the Local Government reports. The facts desired were not given until 1883-4, but since then they have been published each year. The following are the purposes of the loans outstanding in 1891 by all local authorities in England and Wales, which will sufficiently indicate the purposes for which such loans are required in the United Kingdom : — Poor Law purposes ... ... ^7,056,166 Lunatic asylums ... ... 3,686,662 Police stations, gaols, and lock- up houses ... ... ... 1,122,548 Schools (including reformatories and industrial schools ... 18,616,269 Carried forward ^30,481,645 AT HOME AND ABROAD. IJ Brought forward ^30,481,645 Highway and street improve- ments 28,275,890 Electric lighting 56,942 Gasworks 14,991,197 Public lighting ... 46,095 Waterworks 38,325>9i2 Sewerage and sewage disposal works 19,969,077 Markets... 5.380,982 Cemeteries and burial grounds 2,492,185 Fire brigades 489,741 Public buildings, offices, etc., not included under other headings ... 4,3i5>7o7 Parks, pleasure grounds, com- mons, and open spaces ... 3.992,137 Public libraries, museums, and schools of science and art 489,693 Baths, wash-houses, and open bathing places 950,308 Bridges and ferries 4,053,596 Artisans' and labourers' dwellings improvements 3.814,035 Diseases (Cattle) Prevention Act (compensation) 76,239 Hospitals 669,234 Tramways 1,317.555 Slaughter-houses 121,631 Allotments 14,164 Carried forward ^160,323,965 MUNICIPAL TAXATION Brought forward ^160,323,965 Land drainage, embankment, river conservancy, and sea defences ... ... ... 3,147,417 Private improvement works ... 940,969 Other purposes ... ... ... 5)336,645 ^169,748,996 Harbours, piers, docks, and quays 3 1 ,466,462 Total debt ... ...;^2oi, 215,458 The debt for harbour.s, piers, etc., includes the stim of i^5o8,2i6 owing by Town Councils and other urban sanitary authorities, and charged on the local rates. There are many significant items in the fore- going table. From a survey of the items men- tioned it seems that the debts resting upon the cities and minor civil divisions are capable of a threefold classification. In the first class are in- cluded those debts incurred for the purpose of rendering a direct though a general service to the public. The building of highways and streets ; the maintenance of a fire department ; the con- struction of sewerage works, and the like, are examples of such services. The second class in- cludes those debts incurred for the purpose of rendering a direct service to the public, but of a particular rather than a general character. This AT HOME AND ABROAD. 19 division comprises such services as the supply of water, or gas, or heat, to the citizens of a municipal corporation. The purchase of burial-grounds for re-sale to individuals would also be included in this class. The third kind of local indebtedness arises when the governing body employs its public credit for granting assistance to private Corpora- tions, believing thereby to serve the public in- directly through the institutions established. The contraction of local debts is entered upon with foresight, and not under the stress of any emergency, as the Imperial Government often does, so that it follows from this that common business and economic maxims may be more closely ob- served, and general political considerations less strenuously regarded. As has been before stated, a revenue law that makes sudden and rapid changes in the rate of taxation is the occasion of unnecessary incon- venience and vexation, and notwithstanding the rise of extraordinary demands, the evils attending such arbitrary changes may be easily avoided by a resort to credit. It is therefore of common advan- tage that the municipalities should be permitted to distribute the payment of their liabilities over a long period of time. In estimating the number of years for the re- payment of such loans, calculations are often made C 2 20 MUNICIPAL TAXATION upon the income that may arise from the manner in which the proceeds of a loan may be expended, although not always, and the municipality can rely upon other sources of revenue besides the taxes for support of the debt. We have seen that it frequently occurs that local authorities undertake productive industries and derive a steady income from the investment of monies borrowed. Thus the proceeds of a loan are said to be spent for remunerative purposes when invested in such a manner as to render direct personal service to the citizens. The furnishing of gas and other illumi- nants, or of water, are illustrations of such services. In cases of this sort, the burden of the debt is thrown upon the public industry which its proceeds established, and its support and final payment are assumed to rest with those who are benefited by the service in proportion to the benefit received. For example, it is the common practice for water- works to be supported by water rates : public water rates where the supply is for public purposes, and special water rates where the supply is for private or domestic or manufacturing purposes, and it conforms fully to the requirements of finance that these rates should be so adjusted as to pay for the plant and its maintenance independently of general taxation, except so far as the city or com- munity is itself a consumer. Such a method of AT HOME AND ABROAD. 21 management, which leads to the assignment of specific funds to specific services, is not common in National or Imperial finances. But in local affairs, the principle thus disclosed is one of wide application, being the subject of statutable enact- ments, and modifies in a marked degree the general rules of the administration of local debts. In addition to the revenue from productive municipal works, the public creditor has an assured and easy method of securing payment of a city's obligations. Municipalities are compelled to found a sinking fund at the time of issuing a loan for the redemp- tion of the debt in a specific period. Public in- terest is opposed to the perpetuation of local debts, consequently local authorities are bound to make adequate provision for expunging a debt at the time it is created. An additional value is given to those obligations by so doing, and in consequence an additional advantage to the municipality in the launching of its loans. For example, in the year 1890 the Dublin Corporation consolidated its liabilities and converted them into stock. The Corporation was bound by its local Act to form and maintain a loans fund, and to pay into it every year the aggregate amount of all dividends payable in that year, and such further sums as should be sufficient, with accumulation of interest, 22 MUNICIPAL TAXATION to redeem all issues of Corporation Stock at the end of the prescribed period. The following circular, prepared by Mr. Sexton, M.P., at the time of the issue of the Dubhn Cor- poration Stock, will indicate the advantages which such stocks hold out to investors : — " DUBLIN CORPORATION STOCK. 3^ -per cent. Its Value. — The stock is offered at the mini- mum price of par, whilst other stocks are at high premiums in the market. The rate of interest, 3^ per cent., is more than double the usual rate for Bank Deposits ; it is very much higher than the return for money invested in Trustee or Post Office Savings Banks, and it is considerably in excess of the interest yielded by Government funds and British Municipal Stocks at their present market value. The rate of interest will remain unchanged until the term of redemption expires in 1944. Its Security. — The stock and the interest are secured by unlimited rating power. The stock and interest will be the first charge on all the pro- perty, revenues, and rates of the City. Exclusive of rates, the City property is estimated to be of a capital value much exceeding the whole amount of the City debt. Exclusive of rates, the annual in- come from City property is much greater than the AT HOME AND ABROAD. 23 annual cliarge for Interest and Sinking Fund will be when the whole of the City debt has been converted into Stock. The Corporation Loans Fund, prescribed by the Act of Parliament, will be subject to the supervision and direction of the Local Government Board of Ireland. Owing to these concurrent securitie-, the Stock will be free from those causes of fluctuation in value which affect commercial and speculative securities, not excepting the Government Funds. Its Convenience. — Dividends will be payable at any office of the Munster and Leinster Bank, and Dividend Warrants will be sent by post, when so desired, and made payable at any office of the Union Bank of London, the National Provincial Bank of England, or the National Bank of Scot- land. Stock may be converted, at any time, free of all charge, on application by the holder, into Stock Certificates to bearer (with interest coupons attached) for £\o each, or any multiple of £\o, and these Stock Certificates to bearer may be disposed of simply by delivery to the purchaser, without any form of transfer. All transfers and certificates will be free of Stamp Duty, and no official fees will be charged on any transaction in the Stock. As the Stock will bear interest at 3^ per cent, for the term of 54 years, it is an exceptionally convenient and desirable medium of investment for trustees, exe- 24 MUNICIPAL TAXATION CLitors and administrators, for custodians of reserve and sinking funds, and generally for all who desire a permanent and secure investment at a certain rate of interest." Such Stocks are largely availed of by investors and now by the Trust Investment Act, 1889, trus- tees, unless forbidden to do so by the instrument creating the trust, may invest the trust funds in them. The extent to which these Stocks are in de- mand is evidenced by the readiness with which they are taken up, and the buoyancy which they constantly maintain. The subjoined table shows how greatly the value of Municipal Stocks has been increasing in recent years : — AT HOME AND ABROAD. 25 *J r)0>-"00"^"iMrioooocoO'-0 1 fo H,0'-'"0O'-'i-""000MOsO\"0 s i TTTTTTTTTTiTi iTTiT m 1 t^'y.-^lirin^i'iM'M-l'M -<(oM• "v^ ro M ro C) ro ro ro ro ri M M ro n ro ro ro cO ro c -H|(M _^|~,^|c,m-t< -ikM-Hi'M -i|01 «■— ) 1- rOM"-iri — OMDvC>"^^"Mri"roOOT)- 13 vS "2"«°°"";i:2°~'!i?22;i:S22 ►-3-H - a, £ J (4 (U c H^l H^M'?MH-Hk(( H-M-^PI -(pi .-Hl'M.-.Cr-ICl-Hl'M f^=^CJ ro r<-) rn ro C-) CO Tt ro ro m CI -^ r-^ ro ro r<-. r<-) ro -. ^ r^ "-> *1" ^ On On On ■* .> ^^ ri — 00 S Q"^ 2^y.>.^" c ^"ONONON W 1 niti^i 5 icsf « « cQuuQh-lJJ ^ ^c/:cQ 1^ Ln "^CXD 00"^OnOOOOO O^'-nOOOOLo— rOOOroO^OOOOO ^ c -^co u-i u-1 n On CO NO 00r^>-^00000 SjO ONu-iM -tunri ro— O O "~iCO O O O O O E < NO ro n CI ri roco o^co r^r^i-oco^-i-ri ro^n— — fir^vOQcorOcOco I-. M 26 MUNICIPAL TAXATION Municipal borrowing seems to have spread with great rapidity, and a slight consideration of the centres from which these large debts have sprung will show that the larger portion of existing local obligations is chargeable to the cities and large towns. Indebtedness Municipality. Population. Indebtedness. per head of populatior. £ £ S. d. England Birmingham 478,113 10,388,413 21 14 6 Brighton 117,833 816,615 6 18 7 Bradford 216,361 4,691,621 21 13 8 Cardiff 143,346 1,343,192 9 7 4 Carlisle 39,176 178,335 4 II Hull 200,041 1,074,644 5 7 5 Liverpool 517,951 7,893,814 II 7 6 London County ) Council ( 4,232,118 30,621,813 7 4 8 Manchester 515.567 10,399,145 20 3 4 Oldham 131,463 1,528,023 II 12 5 Nottingham 215,000 3,247,032 15 2 Plymouth 85,000 462,000 5 8 8 Sheffield 324,243 3,394,873 10 9 4 Walsall 72,000 250,497 3 9 6 Scotland Aberdeen 129,543 777,977 6 I Edinburgh 261,225 446,355* I 14 2 Glasgow 656,185 6,718,516 10 4 7 Lanark 4,579 15,932 3 9 6 Ireland Belfast 275,000 1.014,675 3 13 9 Dublin 245,001 1,233, '39 5 7 * Exclusive of water and gas debts. The above figures do not adequately present the tendency towards the employment of credit that comes with increasing density of population ; as between the cities themselves greater looseness in fiscal methods may be observed as municipal AT IIOMR AND ABROAD. 27 numbers extend. The average debt per head of these twenty towns is £^ 4s. /d., and as between the towns themselves twelve contain a population of 200,000 and over, and of this number there are but five that fall below the average, while the obligations of many of them are far beyond that of the average town. Pwen abroad the same tendency towards the employment of municipal credit appears to exist, as the following figures as regards the chief European and American cities will show : — Country. Municipality. Population. Indebtedness. Indebtedness per head. £ £ s. d. France Paris 2,447,957 76,490,920 31 4 II ,, Ghent 150,157 1,538,630 10 4 3 Germany Frankfort- ) on-Main \ 185,000 2,450,000 13 4 10 Belgium Antwerp 232.723 7,241,500 31 2 3 Holland Rotterdam 222,270 2,634,500 II 17 ,, The Hague 160,531 981,608 5 9 II Austria Vienna 1,364,54s 5,532,603 4 I I »> Buda Pest 526,263 2,146,970 4 I 7 Italy Rome 440,596 8,902,377 20 4. I ,, Milan 420,000 3,966,915 9 8 10 ,, Genoa 200,495 2,138,184 10 13 3 ,, Florence 184,321 1,704,269 9 4 II ,» Venice 159,038 283,234 I 15 7 Switzerland Ziirich 27,641 1,287,698 46 II 7 Denmark Copenhagan 312,859 1,671,149 569 Sweden' Christiania 156,535 683,334 4 7 3 Russia St. Petersburg 954,400 1,500,000 I II 5 Poland Warsaw 490,417 1,619,865 360 Portugal Lisbon 450,000 2,334,684 5 3 9 U.S. America Boston 448,477 11,713,639 26 2 4 *> Chicago 1,500,000 2,783,297 I 17 7 9* Denver 120,000 308,218 2 12 I »> New Orleans 265,000 3,350,639 12 16 4 >) New York 1,801,739 20,341,544 II 10 7 28 MUNICIPAL TAXATION In many cities municipal debts have grown more rapidly than taxable property or population. Instances of this fact can be multiplied without limit, but they are so often brought to public notice that they are no longer regarded with surprise. The reason of this is not far to seek. The various Imperial Governments having ceased to largely employ their public credit, the cities and minor civil divisions have come forward as the chief borrowers of money. New duties have been imposed upon those who administer local affairs. Many of those cities are of ancient date, and required the application of the best modern scientific methods for the physical welfare of their inhabitants ; the spread of the democratic spirit and the growing demand for the ameliora- tion of the condition of the poorer citizens have entailed obligations upon the various local authori- ties from which their predecessors were entirely free. It is not our purpose to detail these new duties. It is apparent to all that a developing society must of necessity make continually large demands upon civic government, for the principles of common property under public management ex- tends to new objects, and embraces new purposes as a community grows in numbers, in education, and in riches. AT HOME AND ABROAD. 29 People who rail at our growing expenditure forget that it is the nature of well-governed countries to improve ; and that improvement in a government, like improvement in an estate, is almost always a costly process. It is possible to govern cheaply by the simple expedient of govern- ing badly, but efficient government implies efficient machinery, and this must be paid for. We cannot, therefore, share in the anticipation of those who look for any material reduction in the cost of civil government, whether imperial or local. If it were to take place, we should regard it as a morbid rather than a healthy sign. It would prove that the country was stationary, and had ceased to improve, or that the government had ceased to be equal to its needs. As the United Kingdom increases in population and activity, it can no more safely forego an increased expenditure upon government than a railway can increase in traffic without a rise in its working expenses. 30 CHAPTER 11. TAXATION AND ITS INCIDENCE. The political sub-divisions of the nation, made for the purpose of more efficiently administering the affairs of the country, have no inherent power to levy taxation. In the nation alone inheres such power, and the minor grades of government have only such power as is delegated to them. The charter of a municipal corporation — the statute defining its powers — is the source of its power to tax. It has such power on the subject as the statute or charter gives, and no more. The purpose of the local tax is local benefit. The Local Government can administer the affairs of its locality more advantageously than can be done by the imperial or supreme authority, and there- fore the power to tax is given for the purpose of such local government. This power must be plain and express ; it cannot be gained by prescription ; no length of time justifies it ; it originates in the legislative MUNICIPAL TAXATION 3 1 will, declared by express statute, and it must appear in the statute by express words or neces- sary implication. The power to exempt from taxation, like the power to tax, must be also specially conferred, and in statutes conferring the power to tax, the rate of taxation is often limited, which limit cannot be exceeded. However, the charters and statutes under which local authorities are created, and their powers and limits defined, may be changed, modified, enlarged, or repealed as the exigencies of the public service may demand. The development of the Municipal Government and the magnitude of the debt already incurred needs a large periodical revenue. This revenue must, just as much as and even more than a large empire, be derived from the most legitimate sources. The burden of debt ought to be so adjusted that it will not gall the back that has to bear it. Municipal revenue may be divided into two classes, (i) original revenue and (2) derivative revenue. Original municipal revenue is that which the municipality derive directly from their own pro- perty. This source of income in many muni- cipalities is of considerable extent, and, as we shall see when treating of Germany, does not necessi- 32 MUNICIPAL TAXATION tate, in a few instances, the levy of any auxiliary supplies. Derivative revenue is the income derived by the municipality from the obligatory contributions produced by taxation, or those sums which the local authority levies on the wealth of private individuals in return for the services rendered to them by the administrative institutions of the municipality. Those obligatory contributions may be again divided into two classes, (i) special and (2) general, and these are the main source of our local income. In other words, municipal revenue is mainly de- rived from special and general taxes and rates. Special taxes differ from the general taxes in that they refer to special services that have been volun- tarily sought, whereas general taxes refer to general services that are compulsorily offered. Special taxes are such as special fees, costs, charges, or a special rate, or a tax for extraordinary services. It is, however, with the income derived from the general taxation that we have to deal. The reason of such is evident. In order to satisfy certain collective wants, where it is quite im- possible to decide what are the expenses caused by individual citizens, and where the direct per- formance of personal services, which would prove to be uncertain, inconsiderable, and badly dis- AT HOME AND ABROAD. ^^ tiibutcd, would be of no use, there is required a common fund, to establish which voluntary con- tributions would not be adequate. Taxes and rates are the necessary condition of municipal administration. When men are gathered together, it is found best to divide certain necessary work for the sake of economy and efficiency. General taxation is, again, either direct or indirect. Direct taxes are those which affect the citizen's more or less permanent condition, such as his existence, property, profession, or residence ; they are those imposts that are founded on essential and permanent relations between the citizens and the Treasury, which provides for their collection at fixed times. Indirect taxes are applicable to, we might say, acts such as the importation of a commodity, or the consumption of an article ; they are founded on relations merely accidental and temporary, and which, therefore, are usually col- lected by means of a tariff. Carey, in his " Principles of Social Science," thus sums up the relative merits of each system : — " Taxation tends to become direct as men become free. The strength of the State grows with growth in the value of land and labour, and with increase in the proportion borne by fixed to movable capital." D 34 MUNICIPAL TAXATION Adam Smith was the first to attempt to formu- late the truths upon which a tax system should be based. His canons may be described as those of equality, certainty, convenience, and economy ; and Mill says that an examination of the leading authorities shows that, so far as they go, Smith's maxims have " been generally concurred in by subsequent writers," and that their application has been no less generally neglected. These maxims are as follows : — " I. The subjects of every State ought to con- tribute towards the support of the Government, as nearly as possible in proportion to their respective abilities — that is, in proportion to the revenue which they respectively enjoy under the State. " 2. The tax which each individual is bound to pay ought to be certain and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor and to every other person. " 3. Every tax ought to be levied at the time and in the manner in which it is most likely to be convenient for the contributors to pay it. " 4. Every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the State," AT HOME AND ABROAD. 35 To these maxims no fair objection can be made, but it is one of those true propositions which are so abstract and general that, notwithstanding their truth, they are of little use, from the difficulty of applying them rightly to any particular case. We learn very little when we are told that the best tax is that which is most conducive to the public interest, but we do learn something very useful when our attention is directed to any particular merit or demerit which ought to be sought for or avoided in any system of taxation. When it is necessary to raise a large sum by taxation, it becomes nearly impossible to avoid some objection- able taxes. In the class of direct taxation a great sub- division is also in general held to exist, for direct taxation is looked upon as being divided into " Imperial taxation " and " Local taxation." The term imperial taxation is generally intended to include those taxes which are founded on the annual budget of the Chancellor of the Exchequer, and are levied by the direction of Parliament throughout the country, and in most instances by Imperial officers; while the term "local taxation" applies to those taxes (or, as they are more com- monly called, rates) which are not sanctioned annually by Parliament, and which are levied within certain prescribed areas by the properly D 2 36 MUNICIPAL TAXATION constituted authority having jurisdiction for some special purposes within those areas. Is there reall}^ that wide, almost generic dis- tinction which is generally held to exist between the so-called " imperial " and " local taxation " ? It is true that the taxes collected by local authori- ties are not looked upon as imperial taxes, but is that a right view to take of the matter ? The answer surely must be No! for it cannot be held that these rates, not being collected for the benefit of any private individual, but to meet expenditure incurred for the good of the public at large, are as much imperial as those collected for the immediate use of the State for the same purpose. The question of our local imposts ought not, therefore, in any discussion of the equitable re- adjustment of the taxation of the United Kingdom, to be ignored. Obviously the money expended for the relief of the poor, for the formation and repair of the public highways, for the prevention or for the punishment of crime, for the sewerage and sanitary regulations of towns, and for the other various objects of public utility for which local taxes are raised, is as necessary to the maintenance of the country in its political, social, and economical integrity as the imperial expenditure for the army, the navy, or the civil service. The source from whence direct taxation should AT HOME AND ABROAD. 37 be derived has long formed the subject of con- troversies in every country that have not been completely nor anywhere settled. The reason for this is obvious. Property is of so varied a character that an impost levied upon any one kind will compel its proprietor to proclaim that such impost is unjust because it confiscates a certain amount of his capital corresponding^ to the impost, and leaves untouched the capital of the proprietors of the other kinds of propert)'. It is a question that comes home to each one, and is consequently a subject in which all are interested. Local taxes or rates are personal obligations of certain individuals for, as we have said, the con- struction and use of roads, sewers, light, water, protection of public health, and other parochial or municipal provisions for the common benefit of the residents in each locality. They are not, as is generally supposed, taxes on property, but on individuals, the rating of a certain class of each man's property, as a house, being merely a criterion of his general expenditure, and of his potential use of the local works ; and the individual failing, the premises are not liable. A man with a large house is supposed to have a large income, a large establishment, and many servants, while a cottager is taken to be limited in these affairs. In the old times when a man built 38.'J29'7 38 MUNICIPAL TAXATION a house he sunk his own well and his own cess-pool ; nowadays the county or town authority brings water to his door and carries off his sewage in the common sewer. With few exceptions rates are struck periodically, and the demands and payments, allotted according to the rating or valuation, are an annual grant for an annual expenditure out of the annual income of the community. No doubt part of the expenditure is more of a temporary kind, but such expenditure is generally spread over a number of years in the manner we have stated, so that there is a fairly constant average rate from year to year. True it is that sometimes exceptional demands are made from the ratepayers, but even when it is so, the return is made in necessary or exceptional improve- ment and benefit, and a great proportion of the exceptional expenditure is thrown upon succeeding generations. A characteristic of our local taxation, which is of a direct nature, is the narrow groove which it has kept, and the limited source from whence it is derived. The debt, as we have seen, and the expenditure to meet it and current outlay, have been advancing, but without any similar expansion of the source of supply, or the provision of any auxiliary help for its liquidation. The fixed and permanent quality of the land AT HOME AND ABROAD. 39 pointed ic out as most peculiarly fitted to bear the weight of necessary taxation. Next to the land, houses assumed a character of permanency more than any other description of property, and for this reason became objects of taxation. In our fiscal system, therefore, real property suffers an excep- tional liability to taxation. The amount of local taxation incident upon real property is now known with great fulness, as the following will show : — ENGLAND. Local income from rates and taxes (including water and gas rents) levied in 1891 ... ^34,654,591 or 67'37 per cent. Local income from other sources in 189 i, but excluding receipts from loans ^16,782,824 „ 32-6 ,, „ SCOTLAND. Local income from rates and taxes levied in 1891 ... ... ... ^3,020,908 or 8o'o3 per cent. Local income from other sources in 1891, but excluding receipts from loans ;;^753.794 ,. 19*96 ,, ,, 40 MUNICIPAL TAXATION IRELAND. Local income from rates and taxes levied in 1891 ... ... ... ^2,776,021 or 79-24 per cent. Local income from other sources in 1891, but excluding receipts from loans ^727,498 „ 2076 „ The receipts in Scotland do not include those by the fishery or harbour authorities. We thus see that in England real property has to provide 67'37 per cent, of the total local income ; 8o'03 per cent, in Scotland ; and 79'24 per cent, in Ireland. This annual burden is raised upon an assess- ment of the property rated according to the valua- tion put upon it. This valuation is made in the United Kingdom in the manner explained in the next chapter. These imposts upon real property are excep- tionally severe. No doubt there has been a very considerable increase in the value of real property since it was made the object of legitimate ta.xation. Houses, mills, factories, railways, etc., may, and do, increase indefinitely; arable land cannot. The total amount of the local rates raised in England in the year 18S1 was £23,904,860 as compared with a total amount of £27,818,642 AT HOME AND ABROAD. 4I (excluding rates from water works and gas works) in 1891, being an increase of i6'37 per cent, in the latter year. On the other hand, the Poor Law Valuation in 1 88 1 was £[39,636,307, as compared with a valua- tion of £152,1 16,008 in 1891, being an increase of only 8 93 per cent. Thus the local rates and taxes increased within these ten years i6'37 per cent, per annum, whilst the property out of which they are derived only increased 8'93 per cent, per annum. It should be observed that in 1881 the total amount received by local authorities in relief of the rates from Treasury subventions and pay- ments excluding contributions in lieu of rates, but including payment derived from the Local Taxa- tion account, was £2,888,772, whilst similar receipts in 1891 amounted to £7,185,603. If the consider- able relief thus afforded to local rates had not been provided, probably the deficiency would have been met by additional local taxation. In 1 88 1 in England the rate of local taxation in the £, calculated on the rateable value, was 3s. 5' id., whilst in 1891 it was 3s. 7'9d., notwith- standing the large additional relief provided in that year, which represents an additional i r33d. in the £. Again, the local debt has increased more rapidly than the property which has to bear its burden. 42 MUNICIPAL TAXATION In 1 87 1 the local debt in England was £92,810,100, which increased to £201,215,458 in 1891, showing an increase of ii6*8o per cent. In 1871 the valuation was £115,646,631, which increased to £152,116,008 in 1891, showing an increase of 31 '5 3 per cent. Thus, during a short period of twenty years, the local burden increased ii6'8o per cent., and the property out of which it has to be repaid only developed at the rate of 3 ['53 per cent. But while certain kinds of real property have made even this progress, notwithstanding the burden upon them, it is certain that trade, manu- factures, and professions have enormously dis- tanced, in proportion, agricultural industry and house property in the race for wealth. A com- parison of the Income Tax Assessments under Schedule A and Schedule D (the former being in respect of the annual value of lands and houses, and the latter in respect of the annual profits or gains on property, business, and professions, trades, etc.) will prove this. SCHEDULE A. Assessment in 1871. Assessment in 1891. ;^I42,736,057. ^177,725,959- SCHEDULE D. Assessment in 1871. Assessment in 1891. ^189,305,247. ^306,538,198. AT HOME AND ABROAD. 43 Thus, durin*^' these twenty years, lands and houses only increased 24'5 per cent, per annum, according to the Income Tax Commissioners, whilst profits from property, businesses, professions, and trades, etc., increased 61*9 per cent, per annum. It is well to remark that to 1875-6 the tax was charged on £100 and upwards, and since 1876-7 no assessment under Schedule D is made on profits less than ,£150 a year. Needless to say but for this t!ie total assessment would be far larger. Owing, however, to the fluctuating and volatile character of personal property it was always deemed difficult to grasp with certainty, and there- fore escaped being assessed for local taxes ; where personal property is so assessed, the assessors form some general idea of its value by reference to the position in life and manner of living of the owners. However, when reality was originally fixed upon as the property to bear the incidence of taxation, the fact that it was of a permanent and visible character was not the only condition in its favour, but also that it was then considered the best measure of the ability of each to pay accord- ing to his means. It was more just then than under present circumstances, because the great bulk of income was derived from land, very little from trade or foreign commerce. Real property is thus the special fund which 44 MUNICIPAL TAXATION forms the source of local taxation. It consists of local property which is, no doubt, increased in value by expenditure out of local rates. It is a fund which in urban districts cannot increase in extent, but may in value, and therefore, perhaps, be more able to bear taxation. It is the property which local authorities always assess, and which they are, therefore, competent to tax ; but from time to time we hear statements of the injustice of real property alone paying rates, and personal property not being liable to pay any contribution to the local exchequer. There is a large amount of income derivable from property which can never be represented by the rental or valuation of lands and houses. Many millions of capital are, for instance, sunk in the funds, in foreign securities, debentures of all kinds, and in those trading con- cerns which have built up the nation's wealth. To the extent which that capital and the income from such escape from the poor and other local rates, the capital invested in lands and houses is unduly burdened. Speaking on the subject at Exeter in 1892, the Marquis of Salisbury said : " We should be quite certain, then, that this question of rates will be thoroughly overhauled. There is no such crying injustice in this country as the system which places upon the owners of lands and houses the support AT HOME AND ABROAD. 45 of the poor, and, where there are school boards, the education of the poor. These are matters to which all the wealth of the country should equally contribute. There is no reason whatever why the holders of the 750 millions of Consols should go absolutely free and leave to their poorer neighbours who occupy or own lands or houses the duty of maintaining the poor and of providing education. I know that this question is full of difficulty. I know that it has baffled statesman after statesman ; but I have a strong belief that there is not sufficient moving force behind, and that if I had the number of yeomen whom I should like to create in this country, we should very soon see the system of rates put upon an equitable footing." As immense profits arc now made from trade, these profits should contribute their just share of local taxation, along with all kinds of land, house, and other property, as in the case of the imperial income tax. That the demand for the taxation of personality is reasonable, will be acknowledged from a case in point. " A " is a merchant carrying on business in a city in an office rated at say iJ^20, and " B " a workman, residing in a cottage of a similar valuation. Each bears a like proportitMi of the local taxation, although the former may realise an income of ^2,000 per annum out of the business carried on in his office, whilst the workman may 46 MUNICIPAL TAXATION barely obtain a livelihood. The result of the local expenditure may be of more benefit to the merchant than to the workman, by carrying trade to his door and giving him greater opportunities and facilities for increasing his annual income without requiring from him any proportionate increase in his local rates and taxes. This complaint of the freedom of personal property from taxation is natural. Why should the workman in the example given pay a pro- portion of. the local rates equal to that paid by the merchant for the support of our public libraries, washhouses, streets, lighting, and other public municipal undertakings ? or why should a man with ^2,000 a year income pay only on the house he lives in, whilst another man deriving a similar income from house property pays the whole of the local rates ? Income and household furniture bring nothing into the revenue, and all the vast accumulations of works of art that adorn the hom.es of the wealthy and well-to-do, and other creations for luxurx', are untouched by the local tax collector, although the outlay by the local authority is beneficial to all alike, as every material improvement is projected for the convenience of all the people of the city ; and by convenience is meant not mere comfort, but facility of passage tending to the benefit of trade. AT HOME AND ABROAD. 47 Merchants and men of business who thus have tlie benefit of the improvements are infinitely more interested in the success and progress of municipal government towards the resources of which probably they may not contribute. Their assets, it is true, may not be sufficiently localised, nor obvious to the world, and are, besides, so multi- farious, that they do not class under a special name. But if these people had retired from business and invested their capital in lands and houses at possibly a fifth of the annual return that they received from trade, then, if local improve- ments of any magnitude are promoted, they have to pay large annual outlays in the shape of local rates from which they had been previously free, although in receipt of a much larger income. It is expanding commerce which necessitates good, wide and long roads, brings into existence quite an army of police to protect its products, which are generally of a movable character, requires hundreds of thousands of hands to work it ; and surely some portion of the income derived from commerce should be contributed towards the support of the local government. Not only the profits of commerce, but all kinds of personality, should contribute. Good roads are greatly for the convenience of the individual, as well as of commerce ; were roads narrow and in bad repair, 48 MUNICIPAL TAXATION transit might not be safe, neither would wealth accumulate so rapidly. Property or commercial products would not be safe in banks and ware- houses if streets were badly lighted or policed, neither would public safety be secured. In Scotland, under the old law, all the in- habitants of purely burghal parishes were assessed for the relief of the poor " according to the estima- tion of their means and substance " in terms of the Statute of 1579, but in landward parishes "half the burden was laid on the owners of lands and heritages within the parish, and the other half on the whole inhabitants according to their means and substance." By the Poor Law Act of 1845 three modes of assessment were provided, and it was left to each parochial board to adopt which- ever of the three might be considered' best suited to the circumstances of the parish. Half the assessment could be imposed upon the owners, and half upon the occupiers ; or one-half upon the owners, and the other half upon the whole in- habitants according to their means and substance ; or the whole could be imposed as an equal per- centage on the annual income derived from both sources indifferently. Whenever the first mode was adopted, the parochial board was empowered to distinguish lands and heritages into two or more classes, AT HOME AND ABROAD. 49 according to the purposes for which they were used or occupied, and to fix such different rates of assessment on the tenants and occupants of each class as might seem just and equitable. In all these modes it was remarked " that which may be regarded as the national principle, that each man shall be assessed in proportion to his means, has in effect been preserved." • In determining the mode in which a parish should be assessed, the parochial board had not, therefore, to consider the principle as to whether each man should be assessed according to his means, but whether the assessment should be im- posed directly upon his estimated means and substance, or indirectly by assuming that the house or lands occupied by him represented his means and substance proportionally with the other ratepayers. The assessment upon means and substance, other than lands and heritages, was not generally directly enforced, as it was found too inquisitorial ; but gradually an indirect mode of estimating means and substance, by taking annual value or rent as a criterion, was adopted, until finally, by an Act in 1861, the assessment on means and substance was abolished. Public opinion in Scotland now says that those wise and equitable [provisions, designed to secure E 50 MUNICIPAL TAXATION that every one should contribute in proportion to his ability, have been departed from, and that the departure has led to inequality and injustice. Upon this subject, Mr. Lamond, in his " History of the Scottish Poor Laws," says : " They who bring the complaint consist almost exclusively of those who desire a return to the abandoned system of levying the tax upon means and substance in preference to rental. . . . " Assessment according to means and sub- stance was productive of wranglings and bicker- ings of the bitterest kind — charges of conceal- ment and dishonesty, actions for defamation, and every unpleasant thing which should be absent from any system of taxation. The supporters of the old mode of levying the assessment were at one time strong and zealous, and the system did not fall without a struggle. The battle was waged long and keenly in almost every parish where the system was in operation. But as public discussion exposed its inquisitorial nature and the evils following from it, opinion latterly decided against it, with the ultimate result of legislative pro- hibition. . . . " Amid the mass of irrelevancies which have since been written and spoken in favour of assess- ment on means and substances, the following may be gathered and stated as reasons in support of AT HOME AND ABROAD. 5 1 a return to the systems : — (i) Because it is more equitable than the present method, and, as there are difficulties attending any system, it is unjusti- fiable to pursue one which is less equitable because of difficulties standing in the way of carrying out the more equitable ; (2) because it is no more in- quisitorial than the collccLion of the income tax, and no honest community should object to inqui- sition into their private affairs if it is to produce equality among contributors ; (3) because it would catch a great deal of men's " substance " not now subject to the tax ; and (4) because the poor have a moral right to all the monastic and Church property which was seized at the Reformation, and the present system makes no attempt to get these ancient hereditary rights back for the benefit of the poor. " It is obvious that the third of these reasons is the only one which can be seriously listened to, as having any pretensions to validity. The first argu- ment has already been disposed of by the verdict of public opinion. The second is not true. For parochial assessment on means and substance is more inquisitorial than the income tax ; and be- sides, even if it were not, two blacks do not make a white. The income tax is both inquisitorial and objectionable, but in a less degree than the parochial assessment on means and substance was. For in E 2 52 MUNICIPAL Taxation the collection of the income tax any private dis- closures are made to sworn officers and to a board small in number. Further, anyone desirous of preventing his fellow-townsmen from gaining a knowledge of his affairs, has the option of passing over the local commissioners, and making his return direct to Somerset House. But in the other case the board is thirty at the least, and neither the board nor the ofificers are sworn to secrecy. On the contrary, one of the complaints against the system while it lasted was that it put a knowledge of a man's profits and of his most private affairs at the mercy of his rivals in trade, and that incom- petent men frequently sought office as managers, not from a sense of public duty, nor from a con- sciousness of peculiar aptitude for the work of a Poor Law manager, but from the base motive of acquiring an insight into other people's affairs which might be useful to themselves in the conduct of their own. The moral proposition contained in the second reason it is needless to discuss. We fear it is Utopian to expect people to submit to disagreeableness, especially when they touch so tender a subject as their profit and loss, for the sake of any abstract idea or principle, however just in itself. It is a misfortune, of course, if com- munities arc not honest. But, so long as the business of the world is regulated as it is, it will AT HOME AND ABROAD. 53 be hopeless to expect the self-sacrifices to be made which would be involved in a parochial income tax." We do not come to the same conclusions as Mr. Lamond. To be just, aids of money requisite to carry on the government of a State, or of a community to provide for its well-being, should be impartially levied upon all property, speaking in the widest acceptation of the term. Such are the legitimate objects of taxation when by taxation trade and commerce are not handicapped in their development. The science of government is wisely and practically shown, when the taxes are so ordered that each person pays in proportion to the value of his property, and not a certain class only, in proportion to the value of the expen- diture. Are the inhabitants of these countries so taxed .-' So far as our municipal expenditure is concerned, we have seen that they are not. The local taxes press intolerably upon one class of society, and no reduction that may take place, nor any retrench- ment that our municipal expenditure is capable of, can reduce the pressure or attain the ends which all good men desire. The duty of granting supplies is imperative. There can be no .station in any community what- ever that does not owe something to the State and 54 MUNICIPAL TAXATION to the municipality for protection, good order, and other essentials to civic liberty and happiness. This mutual obligation is the very bond of society, and each should observe it. No man should have a claim to the benefit resulting from social com- bination unless he furnishes his quota to the general good. Although the present system has been sanc- tioned by long experience, yet its antiquity affords no excuse for the evil that is in it. Where is the advantage of experience, and of increased wealth, if we are not to adopt improvements ? All arts and sciences have adopted new rules, as new light has been shed upon them ; and shall political science alone stand still, when all others are in motion around her.' It cannot be. Mankind is becoming too wise to suffer such a thing to happen, and now we have obtained a position by which we can compel justice to be done impartially to all. If we cannot lessen the load of taxation, we should adjust it so that it shall not gall the back that has to bear it. If we cannot relieve a certain class of the community from the taxes themselves, at least we are bound to relieve them to the utmost of our power from the bitterness and irritation which they are apt to bring in their train. We can prevent the evil from obtruding itself constantly on AT HOME AND ABROAD. 55 their eyes, and can direct a portion of its pressure on the tough and callous parts of the body politic, sparing those that are weakly or tender. This is what we have to do to mitigate a burden which we cannot take away. 56 CHAPTER III. VALUATION OF PROPERTY. Before property can be assessed for the payment of rates and taxes, it must be valued according to certain prescribed rules, the observance of which makes the property immediately liable to assess- ment. As the method of valuation of property differs in the United Kingdom, a comparison of the different systems may be useful. The English and Scotch Acts dealing with the subject embody much that may be desired, yet it is apparently merely provisional. The preambles of the principal Acts are unquestionably sound and, if acted upon, are well calculated to effect the object in view, namely, a uniform valuation. But the details to be observed by valuators in attaining this object, when brought to practice have, to some extent, been found defective. Poor rates are of so ancient an origin in Eng- land, and the parish vestry was found so convenient an organisation, that a number of other rates, MUNICIPAL TAXATION. $7 for purposes wholly unconnected with the relief of the poor, are assessed and collected with the poor rate. The valuation list for poor law purposes in England thus became conclusive for the great majority of local rates, i.e.^ for the poor rate and all those levied on the basis of the poor rate, including borough and urban sanitary rates, and also high- way rates. Besides the valuation for poor rate, there are (outside London) separate and inde- pendent valuations for county and other {/-g., sewer) rates, and for property tax. The County rate is assessed by the County Council, and the property tax is assessed by the Commissioners under the Income Tax Acts. By the Municipal Corporation Act, 1882, if the council of a borough think that the valuation list for poor rate is not a fair criterion of value, they may cause an independent valuation to be made. Similarly in other cases. The ordinary mode of valuation in England is, however, under the Union Assessment Act, 1862- 1880, which applies to all parishes in a union under the Poor Law Amendment Acts, and may also be applied by order of the Local Government Board to other parishes, whether under separate boards of guardians or in union under any local Act. Under several local Acts there are a number of 5 8 MUNICIPAL TAXATION places excepted from the operations of the Union Assessment Committee Acts, such as Liverpool, Manchester, and Birmingham. In separate parishes not under the Union Assessment Acts, or a local Act, there are no valuation lists properly so called, but the assessment is made by the overseers, and is subject to appeal to the Justices. In these cases, however, a general survey and valuation of property rateable in the parish may be made at any time on application of the overseers by order of the Local Government Board. The valuation list of each parish is made by the overseers, who are the principal officers of the parish. They are appointed annually by the justices. They number from two to four, but in small places a single overseer only is appointed. Anyone can be appointed, but they ought to be good and substantial householders. The appoint- ment of a labourer as overseer was held to be good in the case of a rural parish ; but it was at the same time stated that such an appointment might be improper in a place where there were many opulent farmers. Service of the office is com- pulsory, subject to appeal and to various exemp- tions and disqualifications. The guardians of every union annually appoint an Assessment Com- mittee out of their own members. If the union is conterminous with a municipal borough, the AT HOME AND ABROAD. 59 council of the borough may, on the invitation of the guardians, appoint an equal or less number of councillors to be members of the committee. The overseers in every parish prepare a list, which is ordinarily a copy of the last approved valuation list, with such alterations (if any) as the overseers think proper to make, and after publica- tion it is transmitted to the assessment committee. The committee hear and determine objections made by any aggrieved person, and make such alterations as they think fit, or employ a person to value generally or in any special case. When satisfied, the committee approve of and sign the list, and upon delivery to the overseers it becomes the valuation list in force, and, as before stated, becomes the legal basis for the poor rate and the majority of the local rates which are levied upon the same basis. The valuation list is a statement of the gross estimated rental and rateable value of all rateable property in the parish. By the Assessments Act of 1836 every poor rate must be made "upon an estimate of the net annual value of the several hereditaments rated thereunto ; that is to say, of the rent at which the same might reasonably be expected to let from year to year, free of all usual tenants' rates and taxes, and the tithe commuta- tion rent charge (if any), and deducting therefrom 60 MUNICIPAL TAXATION the probable average annual cost of the repairs insurances, and other expenses (if any) necessary to maintain them in a state to command such rent," and under the Act of 1869 " rateable value " means the gross value after deducting the probable annual average cost of the repairs, insurances, and other expenses as aforesiid. By the Act of 1862 every valuation list must also show the " gross estimated rental," which is defined to be "the rent at which the hereditament might reasonably be expected to let from year to year, " free of all usual tenants' rates and taxes, and tithe commuta- tion rent charge (if any)." It will be observed that when calculating the " gross estimated rental " the deductions permitted when estimating the "rateable value" are not applicable. It would appear, therefore, that the amount to be entered in the valuation list as the " gross estimated rental " of a hereditament is the sum at which the hereditament might reasonably be expected to let from year to year, if the tenant undertook to pay the usual tenants' rates and taxes, and tithe commutation rent charges (if any), and if the landlord undertook to pay the cost of repairs and insurance, and the other expenses (if any) necessary to maintain the hereditament in a state to command such rent. If the owner undertakes to pay the usual tenants' rates and taxes, the AT HOME AND ABROAD. 6l amount of those rates and taxes must be deducted from the rent in order to ascertain the gross estimated rental. On the other hand, if the occupier undertakes to execute the repairs, or to defray the cost of insurance, or other expenses necessary to maintain the property in a state to command the same rent, an addition in respect of these expenses should be made to the rent in order to arrive at the gross estimated rental. In practice, overseers appear to act upon the fact that the rent actually paid is the best criterion of value. It is no doubt />j-n/ia facie the estimate, but it is not conclusive. Take the case of houses let to weekly tenants. The rent charged to the tenant is often in consequence of the frequent changes in the occupation of this class of property, the loss of rent which those changes involve, and the trouble attending the collection of the rent, at a higher rate than the rent which the premises would command if let on an annual tenancy. When the weekly rent gives an amount for the year in excess of the rent at which the hereditament might reasonably be expected to let from year to year — that is to say, on an annual tenancy — it would appear that a proportionate reduction should be made to arrive at the gross estimated rental. Similarly in Scotland. Section 6 of the Valuation Act, 1854, enacts that, " In estimating 62 MUNICIPAL TAXATION the yearly value of lands and heritages under this Act the same shall be taken to be the rent at which, one year with another, such lands and heritages might in their actual state be reasonably expected to let from year to year ; and, where such lands and heritages consist of woods, copse, or underwood, the yearly value of same shall be taken to be the rent at which such lands and heritages might in their actual state be reasonably expected to let from year to year as pasture or grazing lands ; and where such lands and heritages are bona fide let for a yearly rent, conditioned as the fair annual value thereof without grassum or consideration other than the rent, such rent shall be deemed and taken to be the yearly rent or value of such lands and heritages in terms of this Act. Provided always, that if such lands and heritages be let upon a lease the stipulated duration of which is more than twenty-one years from the date of entry under the same, or in the case of minerals more than thirty-one years from the date of such entry, the rent payable under such lease shall not necessarily be assessed as the yearly rent or value of such lands and heritages ; but such )-carly rent or value shall be ascertained in terms of this .Act irrespective of the amount of rent payable under such lease, and the lessee under such lease shall be deemed and taken to be also the proprietor of such lands AT HOME AND ABROAD. 63 and heritages in the sense of this Act, but shall be entitled to relief from the actual proprietor thereof, and to deduction from the rent payable by him to such actual proprietor of such proportion of all assessments laid on or upon the valuations of such lands and heritages made under this Act, and payable by such lessee, as proprietor in the sense of this Act, as shall correspond to the rent payable by such lessee to such actual proprietor as compared with the amount of such valuation." Section 42 defines the property rateable. " Lands and heritages shall extend to and include all lands, houses, shootings, and deer forests, where such shootings or deer forests are actually let ; fishings, woods, copse, and underwood, from which revenue is actually derived ; ferries, piers, harbours, quays, wharves, docks, canals, railways, mines, minerals, quarries, coalworks, waterworks, lime- works, brickworks, ironworks, gasworks, factories, and all buildings and pertinents thereof, and all machinery fixed or attached to any lands or heritages." By the Act of 1886 the condition that shootings and deer forests must be actually let before they become rateable was repealed, and the words " are actually let " in the Act of 1854 struck out. Now if the rent-roll of the rateable property above described is to be taken for the actual valua- 64 MUNICIPAL TAXATION tion as here stated, why go through the form of a vakiation at all ? Lands of the same quality, and yielding the same amount of produce when simi- larly husbanded, may be let from year to year in adjoining estates or townlands on very different terms, as the valuators in such cases are guided only by terms agreed on by the landlord and tenant in returning the valuation of those lands — a valuation, be it remembered, that forms the basis of taxation. It is true the Select Committee on Rating and Valuation in Scotland, which reported in 1890, stated that they saw no cause to recommend that any other basis should be adopted in place of the lettable value. They stated in their report that it seemed reasonable that the proprietor should be taxed upon what he receives in respect of his heritable property, as it might be assumed that he obtains as high a rent as he reasonably could, while the lessee endeavours to get the right of occupancy as cheaply as possible ; so that, where the subject is let, no better test of its value for rating purposes could be suggested than the actual rent. However, such a s)'stcm is defective, since it has been considered by those fully competent to judge of such matters that no valuation should be affected by any private contract made between landlord and tenant. As regards the provision in the latter portion of AT HOME AND ABROAD. 65 the sixth section of the Scottish Act, it was gener- ally supposed that it was introduced with the view of preventing the assessor from departing in his valuation from the rent stipulated in the lease on account of any rise or fall, from natural causes, in the letting value of the lands and heritages during its currency, or owing to voluntary outlay by the tenant in improving a farm or other holding, in which outlay he hoped to recoup himself before the expiry of the lease. But the provision has received a much wider application by the decisions of the Courts. It was mentioned before the Select Committee that it had been held that where a tenant takes a piece of ground or other holding on a lease for not more than twenty-one years, and erects buildings upon it, the annual value of the buildings, however great, cannot be entered in the valuation roll during the currency of the lease, if the letting, wheii the lease was entered into, was a bona fide one, and without grassum or consideration other than rent ; and that it had further been decided that where a lessee under such a lease sublets the holding, the rent payable under the principal lease, not the rent payable under the sub-lease, must be entered in the valuation roll. It was proved — the committee state — that many thousands of pounds of rental or annual value, especially in great towns, F 66 MUNICIPAL TAXATION escape valuation and local taxation under this sta- tutory provision, as it has been authoritatively in- terpreted. With a view to effect a remedy, the Committee suggested either that in such cases all structural erections, alterations or improvements during the term of the lease be taken into account in estimating the yearly value^ and the landlord to have recourse to the tenant or occupier for the increase thus caused in the valuation, or that the tenant who had made the erections be assessed as proprietor in respect of the increase of value thereby caused, and thus avoid the difficulty of charging the true proprietor with the rates in the first in- stance, and giving him recourse against the tenant for his portion of the rates. Valuators in England and Scotland being numerous, and acting simultaneously in different districts, the chances of having them skilful and impartial are diminished. Inequalities must also necessarily arise from the different judgments of so many individuals acting separately and independent of each other ; and being subject to yearly election it can hardly be expected that there is absent that certain degree of favour which most men who act in offices of this nature are found to exercise to- wards their connections, friends, or patrons. Ex- treme accuracy cannot be expected in \-aluations under such conditions. AT HOME AND ABROAD. 67 In Scotland, attain, under Section ^6 of the Act of 1845, power is given to the parochial boards to classify lands. The section runs — " That where the one half of any assessment is imposed on the owners, and the other half on the tenants or oc- cupants of lands and heritages, it shall be lawful for the parochial board of supervision to determine and direct that the lands and heritages may be distinguished into two or more separate classes, according to the purposes for which such lands are used and occupied, and to fix such rate of assess- ment upon the tenants or occupants of each class respectively as to such board may seem just and equitable." The power of classification is separate and distinct from the " deductions " which are to be allowed in estimating the annual value of the lands and heritages. But the arrangements regarding classification are defective, as they are only per- missive, and there is no standard of uniformity. The classification varies in nearly every country, and the grouping of the different kinds of property, Mr. Lamond writes, is often absurd — almost as absurd if they had been drawn by chance out of a hat. It appears that only 186 parishes have classifi- cations under this section, while 693 parishes have no such classification. In many cases the character F 2 68 MUNICIPAL TAXATION of the properties in the parishes has greatly changed since the dates at which classifications were made, and in many cases these old classifications have become inapplicable to the present condition of the property in the parish. Thus it was stated before the Select Committee, that it appeared in a recent case that in 1846 a parochial board adopted a classification of lands and heritages for occupants' rates into (i) land let for farming ; (2) houses let as dwelling-houses and shops ; the former being assessed at one-sixth of their value, and the latter at their full value. At that date there were no railways in the parish, but a railway was con- structed in 1850. It was assessed in Class 2 at its full value, but in 1886, on appeal, the Court held that the classification was invalid on the ground that it was not exhaustive of the lands and heri- tages in the parish, and that until a legal and valid classification had been adopted and approved, the company were entitled to interdict against the parochial board levying from them, as occupants, higher rates than were imposed on any other occupant of lands and heritages in the parish. The great variety and arbitrary character of the existing classifications is v^-ell illustrated by a return obtained in 1886 (Sessional Paper No. 154 of 1886). The Select Committee stated that the undoubted AT HOME AND ABROAD. 69 evil thus existing should be remedied either (i) by giving an initiative in altering classifications to the board of supervision upon the representation of any ratepayer in a parish, or (2) by providing for a statu- tory classification such as is done in the Poor Law Assessment (Scotland) Act, 1861. In Ireland a better system prevails. Under the Valuation of Ireland Act, 1852, a general valuation of Ireland was established. The valuation is controlled by a central authority in Dublin, with valuators and a staff acting upon the same prin- ciples and carrying out similar instructions for their guidance. The valuation is general, for all other systems of valuation have been superseded by it ; and it may be termed just, because it is based on such principles of justice and equity that the wealthy nobleman and struggling farmer are treated alike in the administration of the laws laid down for the guidance of those appointed to value their holdings. The principle on which the valuation was made, as regards land, differs from that on which land is valued in England and Scotland, where, we have seen, the valuation is based on an estimate of the rental. The principle on which the valuation was made in Ireland is set out in the nth Section of the Act, every tenement being valued in the actual 70 MUNICIPAL TAXATION condition in which it was found. The section runs as follows : — " That in every valuation hereafter to be made, or to be carried on or completed, under the pro- visions of this Act, the Commissioners of Valuation shall cause every tenement or rateable heredita- ment hereinafter specified to be separately valued, and such valuation, in regard to land, shall be made upon an estimate of the net annual value thereof, with reference to the average prices of the several articles of agricultural produce hereinafter specified ; all peculiar local circumstances, in each case, being taken into consideration, and all rates, taxes, and public charges, if any (except tithe rent charge), being paid by the tenant. . . . And such valuation, in regard to houses and buildings, shall be made upon an estimate of the net annual value thereof; that is to say, the rent for which, one year with another, the same might, in its actual state, be reasonably expected to let from year to year, the probable average annual cost of repairs, insurance, and other expenses (if any) necessary to maintain the hereditament in its actual state, and all rates, taxes, and public charges, if any (except tithe rent charge), being paid by the tenant." Section 12 defines what are to be valued, as follows : — AT HOME AND ABROAD. /I " For the purposes of this Act, the following hereditaments shall be deemed to be rateable hereditaments — viz, : all lands, buildings, and open mines ; all commons and rights of common, and all other profits to be had or received or taken out of any land ; and in case of land or buildings used exclusively for public, scientific, or charitable purposes, as hereinafter specified, half the annual rent derived by the owner or other person in- terested in the same, so far as the same can or may be ascertained by the said Commissioners of Valuation ; and all rights of fishery ; all canals, navigations, and all rights of navigation ; all rail- ways and tramroads ; all rights of way, and other rights or easements over land, and tolls levied in respect of such rights and easements, and all other tolls ; provided always that no turf bog or turf bank used for the exclusive purpose of cutting or saving turf, or for making turf-mould therefrom, or for fuel or manure, shall be deemed rateable under this Act unless a rent or other valuable considera- tion shall be payable for the same ; and pro- vided also that no mines hereinafter to be opened shall be deemed rateable until seven years after the same shall have been opened ; and mines bond fide re-opened after the same shall have been bona fide abandoned shall be deemed an opening of mines within the meaningf of this Act." 72 MUNICIPAL TAXATION And by Section 7 of the Valuation Revision Act, i860, directions were given that "in making the valuation of any mill or manufactory, or build- ing erected or used for any such purpose, the Commissioners of Valuation shall in each such case value the water or other motive power thereof, but shall not take into account the value of any machinery therein, save only such as shall be erected and used for the production of motive power." The difficulties that naturally present them- selves to a valuator are manifold where acres of land have to be valued, and a relative valuation maintained throughout every townland and tene- ment in the country, and in such a manner that the interest of all parties might be fairly consulted and general satisfaction given. To do this, he should be first acquainted with the chemical com- position of the soil, the climate that influenced it, the proximity of lands to the sea and market towns, the annual produce it yielded, and the price that that produce brought on an average for a certain number of years. In fine, he should be- come acquainted with every circumstance by which property was affected before he could submit to the public a valuation list that was to become the basis of taxation. To help towards the removal of these difficulties, and to establish, so far as AT HOME AND ABROAD. 73 practicable, a uniform system, a scale of prices of agricultural produce was agreed upon by the legislature as a standard according to which the tenement valuation was made. The following is the scale of prices per cwt. of 1 12 lbs. in the Act of 1852 : — Wheat Oats Barley Flax Butter Beef Mutton Pork £ s. d. 7 6 4 10 5 6 2 9 3 5 4 I 15 6 2 I I 12 The valuation of house property is based on a principle equally just as that of lands, and as regards the value of mills there are many con- ditions requiring due and careful consideration, among which may be classed (i) the horse-power and the circumstances affecting it, (2) the quality of the machinery erected and used for the motive power, (3) the nature and quantity of the work done by the mill, and (4) the distance from town or market. To determine the horse-power, the following data was found : (i) the mean velocity of the stream, (2) the section of water, and (3) the fall. Formerly, under the Act of 1852, the water- 74 MUNICIPAL TAXATION power was only to be valued according to the time it was actually used, but the section of the Act of i860 referred to before repealed this limitation. In estimating- the value of mines, lengthened experience is required in the valuator. All ex- penses of working, and the proceeds of sales for three or four years, are first ascertained previous to any valuation being made ; and mines that have not been worked for seven years previous are, as the Act states, subject to no rate whatever. In the case of railways, etc., the " rateable hereditament," says Sir Richard Griffith, " is the land which is to be valued in its existing state, as part of a railway, etc., at the rent it would fetch under the conditions stated in the Act. The profits are not directly rateable themselves, but they enter most materially into the question of the amount of the rate upon the land, by affecting the rent which it would fetch, or which a tenant would give for the railway, etc., not simply as land, but as a railway, etc., with its peculiar adaptation to the production of profit, and that rent must be ascer- tained by reference to the use of it (with engines, carriages, etc., the trading stock), in the same way as the rent of a farm would be calculated by reference to uses of it with cattle, crops, etc. (like- wise trading stock). In neither case would the rent be calculated on the dry possession of the AT HOME AND ABROAD. 75 land without reference to the power of using it, and in both cases the profits are derived not only from the stock, but from the land so used and occupied. It will be necessary, therefore, to ascer- tain the gross receipts, for a year or two, taken at each station along the line, also the amount of receipts arising from the intermediate traffic be- tween the several stations ; from the total amount of such receipts the following deductions are to be made — vi:^ : (i) interest on capital, (2) tenants' profits, (3) depreciation of stock, (4) working ex- penses, (5) value of stations." The values of railway-station houses are returned separately. Though provision has been made for the annual revision of the valuation "of the rateable tenements and hereditaments, the limits whereof shall become altered, and also of those the net annual value of which is liable to frequent altera- tion " — such as fisheries, railways, canals, tolls of bridges, mines, gas and water works, and buildings — there is no power to disturb the general basis of the valuation as fixed under the Act of 1852, without a resort to the provision contained in Section 34. This section enables the Lord Lieutenants, " at or after the termination of 14 years from the period of the final completion of the first general tenement valuation," if he shall think fit to do so, and, "on 76 MUNICIPAL TAXATION an application by the grand jury of the county," to cause a new valuation to be made, and so from time to time, after the expiration of every succeed- ing period of 14 years. Up to the present time, however, no such appli- cation has been submitted, and, as a consequence, no such re-valuation has taken place in any county in Ireland, though, as a matter of fact, a consider- ably longer interval than 14 years has elapsed since the completion of the existing valuation, and which in a few places, having been made at a period of depression and general derangement, has ceased, it is alleged, to furnish a reliable criterion of the actual value there, such as by the Act of 1852 would appear to have been contemplated. Yet to a large extent its general accuracy has been prominently evidenced during the sittings of the courts on the fixing of judicial rents. In the northern counties, where the valuation was brought to a close at a later date, and in the towns, especially in Belfast and the southern portion of Dublin, which has been of recent creation, there is, however, a much nearer approach to general accuracy to be met with. Since the scale of prices in the Act of 1852 was fixed, considerable changes have taken place in connection with agricultural interests. The value of every kind of produce has altered, and AT HOME AND ABROAD. TJ foreign competition has still further reduced the value of land. However, the equity of the principles upon which the Irish valuation was directed to be made must be acknowledged by all ; and that such have been fully and impartially carried out, the owners and occupiers of house property in the various parts of Ireland have borne testimony, from time to time, for the past forty years, by the comparatively few appeals made against the valuation of tenements or holdings, and by the fact that the right to demand a re-valuation has never been exercised. In Ireland it is held that the grand and funda- mental principle that should pervade every system of valuation purporting to be fair and impartial, should be to effect in every district of a country what has been effected in Ireland, namely, a re- lative scale, based upon the letting value of property from year to year and not upon the rent that a tenant may be obliged to pay. The several rates and taxes made for public purposes are an equal poundage rate, calculated on the valuation made in manner described, with two exceptions, however, viz. : — First, under the pro- visions of the Towns Improvement Act, 1854, in which a distinction is made between different classes of property in regard to their liability to assessment for the purposes of that Act, Section 62 y8 MUNICIPAL TAXATION providing as to this as follows : — " For the purpose of any rate to be made or levied under the pro- visions of this Act, or of any Act incorporated herewith, all lands used as arable, meadow, or pasture grounds only, or as woodlands or market gardens, or nursery grounds, and all lands covered with water, and used as a canal, and any towing path to the same, and all lands used as a railway constructed under the powers of any Act of Par- liament for public conveyance, shall be assessed and liable in the proportion of one-fourth part only of the net annual value of such lands respectively." And, secondly, under the Lighting and Cleansing Act, 1828, by which a graduated scale of rating is applied to tenements according to valuation — that is to say, occupiers rated under £^ are exempt from the improvement rate, and not only the occupiers, but also the premises. I'hen from ^5 to ^10 the rate is only 6d. in the £ ; from ^10 to ;^20, not exceeding 9d. ; and from ^20 upwards, is. How- ever, there are only three towns now under this latter Act. The result of the authorities upon the exemption from rateability would seem to be, that premises are exempted from rateability, first, upon the ground that they are used or occupied " altogether" for public purposes ; i.e., (i) Where they are occu- pied for the benefit of every member of the com- AT HOME AND ABROAD. 79 munity ; for then the pubHc are the occupiers, and the pubUc cannot be rated ; (2) When they are used or occupied by the Sovereign, or by the official servants of the Sovereign for and on her behalf; secondly, upon the ground that they are used or occupied " exclusively " for charitable purposes, i.e., when nothing is earned, directly or indirectly, by such use and occupation, however small the amount so earned may be, even though it produce no profit, and though it be applied to the charitable purposes of the particular institution ; thirdly, when they are used and occupied by a society established exclu- sively for the purpose of science, literature^ or the fine arts, and the society has complied with the requirements of the law relating to such institutions. In England, upon the construction of the statute of Elizabeth, railways are rateable as " land," and canals as " land covered with water " ; in Ireland and Scotland they are specially enumer- ated as rateable hereditaments. In England no- thing is rateable but " land," so that incorporeal hereditaments, if severed from the " land," are not assessable to the poor rate ; while in Ireland " any right over land " is rateable. A lessee or grantee, therefore, of any incorporeal hereditament, such as a right of shooting, fishing, tolls, etc., severed from the soil, cannot in Ireland escape from rating, as he may in England. 80 MUNICirAL TAXATION Manufacturers throughout England who use machinery for carrying on their industries have, for some years past, complained of the action taken by local authorities in trying to bring within their rating powers various classes of machinery which at one time were not thought to be rateable. A series of decisions of the courts of law have drawn the net closer and closer around the manufacturer, until, instead of it being exceptional for machinery to be rated, he sees before him no chance of any machinery escaping from rating. At one time it was considered that only machinery fixed to the freehold in such a manner as to pass in a demise with it was rateable. The criterion, in fact, was whether the machinery was in law realty or per- sonalty. If the machinery was merely a tenant's fixture, which he could remove at his pleasure, it was considered to come within the terms of the Act of 1840, which did away altogether with the rating of personal chattels, and rendered it unlaw- ful to tax any inhabitant in respect of his ability derived from profits of stock-in-trade or any other property. But it is represented that the law was, little by little, strained against the owners of machinery " attached " or " annexed " to the pre- mises. Several cases have been decided wherein it was laid down that in estimating the rateable value of premises used as a manufactory, machinery and AT HOME AND ABROAD. 8 1 plant placed therein, for the purpose of making them fit as premises for such manufactory, are to be taken into account as enhancing the value of the hereditament, although such machinery and plant remain personal property, and are not physically attached to the premises. Manufacturers see in the cases already decided upon the subject the possibility of an enormous extension of the rateable value of all mills and factories which contain machinery of any class fitted for carrying on the business for which the premises are used. But apart from what they allege to be the want of equity in rating machinery placed by them on the premises for the purpose of their business, they are more concerned with the uncertainty which prevails as to how far the law, as determined by the judges, will be carried into effect by the assessment com- mittees of particular unions. The Select Com- mittee who reported on the Rating of Machinery Bill of 1887 were agreed that the practice with respect to the rating of machinery had widely differed in various parts of the country, and that without further legislation it would continue to do so-. They strongly upheld the principle that uni- formity should prevail throughout the country, and recommended the Government to deal compre- hensively with the whole question of rating with the least possible delay. G 82 MUNICIPAL TAXATION No legislation has, however, taken place on the subject, although Bills have been introduced from time to time, and deputations have waited upon the Ministers in power both for and against the measures proposed. Instances of the anomalous state of affairs which now prevails are numerous. Lace machinery, we are told, is not rated in Nottingham, but is in some other towns. It is not often rated at any- thing like its value, as a compromise is arrived at with the manufacturer ; and if he shows any in- clination to fight, he is likely enough to be let off altogether. Those rating authorities who have taken advan- tage of the law, as expounded by the judges, to largely widen the area of rating are not likely to view with equanimity any measure so far as it is likely to curtail the rateable value from which they raise their revenue. From their point of view, the uncertainty which now prevails is not so great an evil as a material shifting of the incidence of local burdens. In one large manufacturing city it is alleged that such a measure would be to diminish the rateable value to the extent of £30,000, and about £8,000 now paid in rates by manufacturers would be levied on other contributors, chieHy con- sisting of the already overburdened small shop- keepers. However, uniformity throughout the AT HOME AND ABROAD. 83 country is desirable on every ground, as the present lack of uniformity necessarily leads to uncertainty, which is not satisfactory to those either for or against the rating of machinery. We have seen that under the Irish Valuation Act machinery is not to be taken into account unless it is erected and used as a motive power. It is very significant that Parliament has not placed any reliance upon the valuation lists pre- pared under the Union Assessment Acts for im- perial purposes, or under certain circumstances for the purposes of the county rates in England. The Clerk of the Assessment Committees has, indeed, to send annually to the clerks of the County Councils copies of the totals of the valuation lists, but they do not bind the County Councils in pre- paring a basis for the county rates, as they can make an independent valuation of any parish, etc., in their county, which then forms the basis for the county rate. Even for borough rates the valuation lists are not necessarily conclusive. It is a matter of notoriety that there are many unions where the valuation lists are in a most unsatisfactory state, both from the point of view of comparing union with union, and from the point of view of individual assessments in the same parish. Systematic under- assessment widely prevails, as may be seen by comparing the totals sent by the clerks and the G 2 84 MUNICIPAL TAXATION actual figures which formerly the justices, and now the County Councils, find it necessary to adopt for the county rate. The Inland Revenue officers proceed quite independently of the parochial authorities in mak- ing their assessment for the imperial taxes. In 1890 the gross value in the income tax assessment under Schedule A was, for the whole of England and Wales, £164,541,187; but the rateable value by the assessment committees was only £150,485,974. In Ireland a nearer approach to accuracy is made, for in the same year the total poor law valuation was £13,994,254 and the income tax assessment under Schedule A was £13,600,828. In England, even if those unions were deducted in which the valuation lists were well made, the figures would show a still more startling discrep- ancy for the remaining unions. In this respect the rural unions are the greatest offenders. It is evident, therefore, that the restricted purposes and machinery of the Assessment Committee Acts want extending, and strengthening into a system which shall furnish reliable values for the purposes not alone of local but also of imperial taxation. A common measure of rateability or taxable value of property is a question which has excited some interest, and has engaged the attention of AT HOME AND ABROAD. 85 the British Association for the Advancement of Science. A committee of the Association have issued a report upon the subject, which is worthy of perusal and study. Vahies are the object matters of taxation ; their measurement and comparison are the necessary condition of its equal incidence; and measurements with unequal measures are like weighings with unjust balances. Taxation, however pure its intention, without a common measure of value is what navigation is without sextant and chrono- meter. There are two methods of general valuation — Capital value and Usable value. Measurements of the value of things (employing this word " things " as inclusive of land, houses, labour, stock, etc.) may have reference to their absolute worth or their temporary uses. They may have reference to their property, capital, or absolute values, or to their products, profits, or annual values. The one measure is exemplified in contracts of sale and purchase ; the other in contracts of letting and hiring. Each has its special advantages and special applications. Capital or absolute value is applied to the assessment of probate and legacy duty ; usable value in the assessments of local taxation and in those of the imperial income tax. The idea of capital value is tolerably well fixed, 86 MUNICIPAL TAXATION but that of usable or lettable value is indefinite. Usable value is, or is equivalent to, the considera- tion paid for the income received from the use of things. This consideration, however, may be paid under such totally different conditions of contract that, unless these conditions are first assimilated, the payments, regarded as measures either of the values of things or of the abilities of their owners, are worse than useless — they are misleading. Things having a use, and hence capable of be- coming sources of income, are all, by the very nature of the process, liable to outgoings ; some more, some less. Production involves productive consumption. Efficiency implies cost--cost, for the most part, of insurance against risk; of repairs; of necessary depreciation. But the user of a thing, be it land, a house, labour or stock, may engage for its use with or without liability to these out- goings ; their cost may be borne by the user or by the owner, or they may be divided between the two in any proportion that convenience may direct. The user may bear repairs, and the owner natural risk and depreciation, or the user may bear all and the owner none, or the user none and the owner all, the consideration given (the income received) of course varying accordingly. Were the things valued by absolute sale or capitalisation, all the incidents, whether of efficiency or cost, plus or AT HOME AND ABROAD. 8/ minus, would be wholly and uniformly included, and the test would fix the things' relative positions. In valuations by uses, however, it is evident that these incidents are not as a matter of practice uniformly included, and the valuation founded upon unfixed conditions can fix nothing; its possi- bilities of variation are co-extensive with those of free contract itself As the inequalities of valuation arise from the different conditions in respect to outgoings under which the various incomes are calculated, the remedy must be the assimilation of these condi- tions ; and the case of principal and interest, which in one respect may be regarded as a common ex- pression of sources and uses generally, may be employed as a precedent. Interest is the income from a thing free of outgoings. It leaves the thing or its capital value unimpaired. The extension of this idea to revenues or incomes in general is simply the universal deduction from them of their productive outgoings, equivalent to the general restoration of the capital values of their respective sources. Under such a regime, returnable and taxable income would not be land rent, house rent, mine royalties, labour wages, but land rent minus land outgoings, house rent minus house out- • goings, mine royalties minus mine outgoings, labour wages minus labour outgoings ; and similarly with 88 MUNICIPAL TAXATION terminable annuities and profits of business, the outgoino^s, however, being in all cases only the necessary ones of the production. The result thus obtained would be what by analogy may be called the interest value of the various sources ; and such interest value of land, of houses, of labour, of stock, etc., would be the common measure required, and would represent the returnable income for taxa- tion. The question now arises, Are such deductions of outgoings on the sources of income and the determination of the interest value practicable.'* As we are only concerned, at present, with one particular class of capital — real property — the different Valuation Acts hereinbefore referred to have, so far, practically solved the problem. A difference will, however, be found in the nature of the deductions permitted. Interest value is capital value for a year ; but the capital out of which this interest value is derived may determine. It may be held only for a limited tenure, and its capital value may be less than that held permanently. Land is permanent in its nature, but houses are not. The latter depreciate in value and wear out, and this fact appears to have been carefully con- sidered in the Irish Valuation Act. Under this Act, consideration is to be given to "other expenses (if any) necessary to maintain the hereditament in AT HOME AND ABROAD. 89 its actual state " — that is, to the expenses necessary to permanently maintain the source of income in its present condition. But such houses may only be held by the party assessed for a limited tenure, and its capital value may be much less than if it was of a fee-simple tenure. In such cases the interest value for taxation is disproportionate, as interest value presupposes permanency in tenure or in the existence of the capital. go CHAPTER IV. OCCUPIER AND OWNER. In the second chapter, the incidence of our local taxation as it affected a certain kind of property was considered ; but there is a more material dis- tinction still, and that is as the incidence affects the class of persons assessed in respect of such property. The law with regard to the principles of rating in the United Kingdom is extremely intricate and technical, and as it is beyond our scope to treat of it in detail, we will describe only its general ten- dencies and provisions. In reality, it is a somewhat rough way of taxing the land and buildings of the country through the occupier. It has been said that " the whole capa- city of the parish is to be called in aid of the poor of the parish," but under every form of our local government the occupier is the person primarily liable for the payment of the rates, save in those excepted cases where, under both the Poor Law and Municipal Law, the owner is substituted as MUNICIPAL TAXATION 9l regards all tenements below a certain specific valuation. We have seen that the poor rate is the principal rate in England, and that the majority of the local rates are assessed and collected with it. The incidence of all is therefore the same, and the unfortunate occupier is the individual whose back has to bear the burden which grows heavier and heavier each year according as the exigency of the public service requires new works to be executed and new duties to be performed. In Ireland the poor rate is separately collected, and the other local rates and taxes are assessed and collected by the authorities levying them. As against the practice in England, in Ireland, therefore, a distinct machinery is found for the assessment and collec- tion of each separate rate and tax. The cases in which the owner is rated and assessed for the local rates and taxes are not very numerous. In England under the Poor Law Amendment Act, 1 8 19, it is enacted that it shall be lawful " to resolve and direct that the owner or owners of all houses, apartments or dwellings, being the im- mediate lessor or lessors of the actual occupier or occupiers, which shall respectively be let to the occupiers thereof at any rent or rate not exceeding £20 nor less than £6 by the year for any less term 92 MUNICIPAL TAXATION than one year, or on any agreement by which the rents shall be reserved or made payable at any shorter period than three months, shall be assessed to the rates for the relief of the poor for or in respect of such houses, apartments, or dwellings, and the outhouses and curtilages thereof, instead of the actual occupiers." In Ireland the occupation of a holding imposes on the occupier the immediate liability to the pay- ment of the rate, and confers on him, in turn, a personal right to set off against his landlord a proportion of what he has, as such occupier, paid. The principle of occupation is departed from in cases of small holdings where the whole of the rateable hereditaments in the union occupied by any one person does not exceed £4, if the occupier has no greater estate therein than a tenancy from year to year, or holds by lease subsequent to 1843. In such cases the poor rate is made on the " Immediate Lessor." In Dublin the owner is liable to the whole of the poor rate where the premises are valued under £8. Again, where any house is let in separate apartments or lodgings, the occupier of such apart- ment or lodgings is not liable to the poor rate, but the rate in respect of the whole house is made upon the immediate lessor under whom such apartments AT HOME AND ABROAD. 93 or lodgings are held. In Dublin, when the premises are assessed at £8 or under, and elsewhere under ^lO, the municipal rates are levied off the owner, and likewise when the premises are let to weekly or monthly tenants. In all other cases, however, in Ireland the occupier is primarily liable for the rates. In certain boroughs in the United Kingdom exceptional, and a different, law may exist, but the foregoing is the general law, and sufificiently enunciates the partial way in which owners of property have been treated by the legislature. The principle, however, seems to have been adopted in Scotland that a portion of the local taxation ought to be thrown upon the owner. This is, practically, the universal principle. We have seen that under the Poor Law (Scot- land) Act one half of the gross sum to be raised for poor rates is levied from the owners, and the other half from the occupiers, but it does not follow that the two portions are precisely the same in any particular case. This arises from the fact that, as regards the occupiers' half, the Act permits the classification which we have already explained. The classification arises from the nature of the occupation, the principle of which is that all residential occupancies shall be charged at a high rate, whilst an occupancy merely for the purpose of 94 MUNICIPAL TAXATION business or manufacture should be charged at a comparatively low rate. Farms, of course, are assessed, where the classification is made, at a low rate compared with dwelling-houses, and the classification only becomes necessary where the parish is of a mixed nature, because if a parish is composed entirely of land there is no use for the classification at all. If it is composed partly of land and partly of houses, the classification is deemed necessary in point of equity. As we have before stated, the classification is sanctioned by the Act, but it is not enjoined, and the greater number of parishes do not establish it. The county rates in Scotland are levied from the owners, but as regards the road maintenance assessment portion of the rate the owner can recover one half of such assessment from the occupier. This also applies to the cattle disease assessment when levied. Like the county rate, the Scottish owner has to bear portion of the borough rates. Thus the police assessment, which includes watching, light- ing, water, and certain criminal expenditure, is levied entirely upon the occupier ; the sewer rate is levied upon the owner; the public health rate is charged upon the occupier, and the prisons and roads assessment upon the owner and occupier equally. Of these assessments a separate and distinct collection is made from the owner and AT HOME AND ABROAD. 95 occupier, and the latter is not called upon to pay the full amount and deduct it from the landlord. In Glasgow, under the Police Act, 186.6, oc- cupiers of rateable hereditaments of the yearly rent or value of over £4 are liable for the assessment, and in Ireland, in the case of poor law rating, the occupier is entitled to deduct from each pound of rent paid by him one half of the poundage rate (not exceeding in any case one-half of the entire rate paid), while both the county and municipal rates fall altogether upon the occupier exclusively, the owners of property, except in the cases men- tioned, being entirely relieved from any direct contribution whatever to the taxation coming under these heads. The original Poor Law (Ireland) Act, 1837, not only expressly provided for the foregoing division of the rate between the owner and occupier, but likewise insured that the arrangement should be practically enforced by rendering all contracts on the part of the tenant to forego such deductions null and void — a restriction subsequently and somewhat unaccountably removed by the Poor Law (Ireland) Act, 1849. Under the Land Act (Ireland), 1870, a provision was for the first time introduced enabling occupiers " under any tenancy whatever created after the passing of this Act " to make in regard to county 96 MUNICIPAL TAXATION cess a deduction from rent similar to that always allowed to poor rate, but this was not accompanied by any restriction similar to that which, it has been seen, accompanied the original Poor Law Act, and as the result of any person's experience who has made careful inquiries, and who has had oppor- tunities of noting the contracts of tenants for nearly every class of real property, it may be confidently affirmed that, with few exceptions, the provision referred to has remained almost abso- lutely inoperative, tenants in some cases being found willing to forego this claim in preference to the alternative arrangement of submitting to a corresponding increase in the amount of rent, and in others having had to forego the claim whether they liked it or not, without any corresponding reduction in the rent. Judicial rents were now fixed in Ireland on the assumption that the tenant of the holding to which the Land Acts apply is to pay the whole county cess as well as half the poor rate, except in cases of tenants of holdings rated below ^4. The county or grand jury cess in Ireland is applied to the purposes for which the county rate, hundred rate, and police rate, are applied in England. Unlike the system in England, in Ireland, as before stated, no other rates are in- cluded in and paid out of the poor rate, but a AT HOME AND ABROAD. 97 large number of assessments arc put upon the county cess, which is the most important in rural districts. In certain cases, again, the owner may become directly liable to the payment of the rates by compounding for them. Thus, if a person owns a number of cottages, and he undertakes to pay the rates thereon, whether they be all occupied or not, the local authorities are at liberty to "compound " with him, and to deduct one fourth from the amount he would otherwise have to pay, such deduction being in contemplation of the con- tingency of some of the buildings being from time to time without tenants. Under the Poor Rate Assessment and Col- lection Act (England), 1869, it is provided, "In case the rateable value of any hereditament does not exceed £20, if the hereditament is situate in the metropolis; or £\}„ if situate in any parish wholly or partly within the borough of Liverpool; or £\0, if situate in any parish wholly or partly within the city of Manchester or the borough of Birmingham; or ^8, if situate elsewhere, and the owner of such hereditament is willing to enter into an agreement in writing with the overseers, to become liable to them for the poor rates assessed in respect of such hereditaments, for any term not being less than one year from the date of such II 98 MUXICIPAL TAXATION agreement, and to pay the poor rates whether the hereditaments be occupied or not, the overseers may, subject nevertheless to the control of the vestry, agree with the owner to receive the rates from him, and to allow him a commission not exceeding 25 per cent, on the amount thereof" There does not appear to be any liberty to compound in the Irish Acts, but under the Dublin Corporation Act, 1890 (Section 75), where premises do not exceed the annual value of £8, and are suitable as dwellings for, and are occupied by, artisans or labourers, the local authority can com- pound with the owner for the municipal rates on a reduced estimate of the net annual value, but not less than two-thirds nor more than four-fifths of such net value. The whole year rates, however, on such reduced estimate must be paid on or before 1st March in each year. A landlord who com- pounds for the payment of rates is in a similar position to the landlord of tenements which are wholly let out in apartments, he being in both cases the person whom the authorities look to in the first instance for payment. Both in cases of compounding, and where a landlord expressly undertakes to pay the rates (needless to say, a very rare arrangement), such owner is answerable to the tenant for any conse- quences of his failure to pay ; and he is bound to AT HOME AND ABROAD. 99 submit to a deduction from rent of any amount which the tenant may be called upon to pay. This liberty to the tenant to deduct the amount paid by him is necessary; for even though the owner may compound with the authorities, he may fail to pay, and should payment not be made from himself or his property, the property of the tenant becomes liable for the rates unpaid, to the amount of any rent which may actually be due. The power to compound appears to prevail extensively in England. Before the committee on town holdings, it was stated that rates were com- pounded for in Wolverhampton to the extent of two-thirds of the residential assessment. In Bir- mingham nearly half a million sterling out of the whole residential assessment is compounded for, and that represents at least a half of the total of such assessment. Experience has, however, shown that where the owner is made directly liable for the payment of the local rates in the cases stated, or elects to become so by compounding for them, he generally recoups himself for the amount paid by an increase in the rent. In such cases he had every op- portunity to shift the burden off his own shoulders. In the case of the small rating, he is aware of his primary liability, and will consider this in any contract with the tenant, the occupier, and require H 2 lOO MUNICIPAL TAXATION such a rent as will recoup him for the amount expended. In case of weekly tenants, and those holding under less than or under a yearly tenancy, an early opportunity is afforded him to readjust the terms of his contract. He has the power to do so, and has always been found disposed to use it. In every case, therefore, it is the tenant or occupier who pays all the local rates ; either directly or indirectly, in the rent, he has to pay for the premises occupied. Closely associated with the liability for rates and taxes lies the question of occupancy. The rate is a personal tax in the United Kingdom, although made in respect of real property — that is to say, the rate is not a charge on the land or other property; but the person occupying it in cases mentioned is personally liable. The cir- cumstances in which the property stands, or the uses to which it is put, may, however, prevent its being actually rated for the time being. Thus property that is unoccupied, e.g., an empty house, is not rateable while it continues empty. Again, property in the occupation of the Crown is not rateable, nor churches, nor museums, etc., under certain circumstances. It is almost impossible to define accurately what is the meaning of occupa- AT HOME AND ABROAD. lOI tion ; thus, an owner of land is in possession of the minerals underneath, but if he does not dig for them he is not in occupation of them. The owner of an empty house is in the same way, though in legal possession, not in occupation. On the other hand, without legal possession, a person may be in occupation ; thus a mere squatter on a common is in occupation of the land he uses. Occupation may be said to involve the idea of control and employment. We thus see that the person who idly or wantonly suffers his land or house to remain un- occupied and unproductive, as in the case of an owner who looks for a higher rent than a tenant is willing to give, is completely exempted from local burdens, whilst he who applies his capital and energies to the improvement of a neighbourhood, or the encouragement of industry, is hampered at every turn by the additional risk of having his contributions to the local rates augmented to an extent calculated to impair very seriously the advantage of his enterprise. However, special powers arc sometimes given in local Acts to rate the owner for unoccupied premises. Thus, under the Dublin Act, 1890, an owner of unoccupied premises is liable to such items or proportion of the municipal rates as the local authority may determine, but such items or I02 MUNICIPAL TAXATION proportion cannot exceed one-third of the muni- cipal rates. The question of the general rating and taxation of the owner's interest in lands and houses is fast becoming a burning question. The occupier is usually a tenant holding for a short tenure, and who, out of his industry, savings, or public spirit, is engaged in improving the owner's property, and not only bestowing on the owner all the outlay he makes, but, as time goes on, he is regularly paying a rent on the improvements which his rates and taxes have effected. In other words, the occupiers are, at their own expense, to keep up the letting value of premises for the purpose of occupation. Enormous ad- ditional value has been given to the land, and especially to town plots, by the great sanitary and other public improvements. Many of the high rates paid for houses in our large cities and towns are due not to the excellence of a particular site, but to the ability of the occupier. A tradesman, by his energy and enterprise, builds up a valuable business. Immediately that his lease or contract of tenancy expires, the landlord or owner comes down upon him for increased rent before he will consent to grant a renewal, not because his house is worth more than before to other people, but because it is worth more to the tenant; for if he AT HOME AND ABROAD. I03 loses that house, he loses all the bushiess con- nection he has created. The owner, in fact, has got him so that he can enforce the last penny from him. The struggling tradesman or householder is as much in need of protection as any of Her Majesty's subjects. Again, say a new bridge has to be erected. It is clear that the value of the land or houses in the vicinity will be raised in consequence. The occupier, if he has a lease, will get the immediate benefit. The owner will get it at once, by being able to raise the rent if there is no lease. Instances of this can be multiplied, and in any case he will get it in the end. Considerations such as these have produced in many minds a strong conviction that our artisan population, and the occupiers of houses, daily suffer injustice at the hands of the owners of the soil and of the proprietary interests in houses. Not alone have local bodies protested against the injustice of saddling occupiers with the entire cost of public improvements, but several committees of the House of Commons have also affirmed such protests. Sir Thomas Farrer and Professor Rogers im- pressed upon the recent Town Holdings Committee that the state of public feeling on this subject was such that great danger might result if action were not taken to meet it. The former said that it I04 MUNICIPAL TAXATION seemed to him that "if there was one thing in which the voters in London were interested it was this question of rating, and of throwing some part of the incidence of the rates upon the owner. Feel- ing about it is so strong that, unless something is done to allay that feeling, it may become a very dangerous element." Professor Rogers agreed that landowners do not bear their proper share of local burdens, and that public opinion was so inflamed on the subject that legislative action was called for, and suggested that the rates should be equally divided between owner and occupier. The committee finally recommended the course suggested by Professor Rogers, but as regards future contracts only. The question is not of recent investigation ; neither was the Committee on Town Holdings the first to enquire into the subject. So far back as 1870, a Committee on Local Taxation was ap- pointed by a Liberal Government, and, again, in 1878 another committee was appointed by a Con- servative administration. The committee of 1870 was under the presi- denc}-of the Right Jlon. Mr. Goschen, and included the late Right Hon. W. H. Smith, and amongst other matters reported, " That the existing system of local taxation, under which the exclusive charge AT HOME AM) ABROAD. IO5 of almost all rates leviable upon rateable property for current expenditure, as well as for new objects and permanent works, is placed by law upon occupiers, while the owners are generally exempt from any direct or intermediate contribution in respect of such rates, is contrary to sound policy. " That, subject to equitable arrangements as regards existing contracts, the rates should be collected, as at present, from the occupiers (except in cases of small tenements), power being given to the occupier to deduct from his rent the proportion of the rates to which the owner may be made liable, and provision being made to render persons having superior or intermediate interests liable to pro- portionate deductions from the rents received by them, as in the case of the income tax, with a like prohibition against agreements in contravention of the law." The Committee of 1878 was under the presi- dency of the Right Hon. Sir Michael Hicks Beach, and reported that the arguments urged in support of a division of the rates were mainly : — " That it was neither fair nor expedient that the pressure of taxation when increased should fall in the first instance solely on one, and that the poorer, class of the community — viz., the occupiers ; nor was it wise in the interests of owners of property that they should not practically feel at the time I06 MUNICIPAL TAXATION the rise and fall of rates, particularly when large expenditure is imminent, much of which was at first met by loans " ; and, further, " that the division of the taxation would be just in itself, and would justify the division of power, and the character of the governing bodies would be raised by the addition of a more educated and independent class of representatives." This committee finally decided to recommend the proposed division of rates and representation. They did not attempt to define the word " owner," but would include under the name those so included under the Poor Law Acts, provided they resided within twenty miles of the town. The same subject, and the rating of the owner's interest in the land, was touched upon by Mr. Esslemont, M.P., and others, before the Select Committee on Scottish Rating and Valuation in 1888. These authoritative declarations show that it is not just that occupiers should continue to bear the entire cost, whilst the several proprietary interests reap the maximum of benefit without rendering any assistance or pecuniary contribution towards the projects which lead to the enhancement in the value of their property. In the end the owner suffers for having this advantage, for it prevents him, as it was argued before the different com- mittees, from discerning his interest in the proper AT HOME AND A15R0AD. 107 administration of local affairs, and emboldens him to neglect his duty in the public service. It is to his interest that the rise and fall of rates should come home directly to him, for then he would be induced to concern himself with the progressive administration of matters in his own locality. Although the Committee on Town Holdings recommended the division between the occupier and owner for adoption as regards future contracts only, yet, even as regards existing contracts of tenancy, many rates have been established or increased since those contracts were entered into, and circumstances have arisen which could not be anticipated by the tenant or occupier when the contract was made. Such additional rates defray the cost, probably, of works which permanently increase the value of the owner's interest, and from which he will derive a greater revenue at the termination of the existing contract. What with the growing needs of the community, and the development of science, we know that many of the improvements carried out in our towns are entirely new departures, which could not be foreseen when the pre-existing leases or contracts of tenancy were drawn up, and the cost of which ought to have been specially divided between occupiers and owners in the Acts sanctioning them. The occupier is rarely a free party to the contract contained in I08 MUNICirAL TAXATION the lease of land for a house, and it is not, therefore, this contract which makes him liable to pay the whole local rate, but the general presumption of liability contained in the older Acts. In a large number of the States in the American Union there is a provision by which, if an owner of land or houses is benefited by the improvements made by the public, he must contribute under the name of " betterment " to the expense of those operations which have enhanced the value of his property. In our own Public Health Acts we have, in a small way, somewhat similar provisions for the direct and ascertained improvement of a district. For outlay incurred for private improvements — such as the making of new roads, etc. — the sanitary authority can levy a rate upon the occupier, who, in his turn, can deduct it from the rent payable to his landlord ; but even in this case there is no pro- hibition of contracts to release the owner from this ultimate liability ; and very often the occupiers, by the nature of their contracts of tenanc}^ are debarred from making the deduction which the Acts authorise, although the possibility of the levy of such a rate might not have been an element under consideration when arranging the terms of the contract. Apart from the division of municipal taxation. AT HOME AND ABROAD. lOQ the question of poor rate and county rate lies deeper, and involves the question whether the moral and historical obligation to contribute, as evidenced by the Irish Poor Law and Land Act, 1870, lies in any special and peculiar degree upon the owners. When advocating the division of local taxation between the occupier and owner of each proprie- tary interest, we must not be taken as suggesting the relief of the occupier from a portion of every rate. There are some rates and taxes which are imposed for his benefit, as for lighting, domestic water supply, and for police, etc., which should necessarily be borne by him alone ; but a portion of those rates for works which are essential to the beneficial ownership of property, or levied for the benefit of the community, should be borne by the owner, as the taxes imposed to defray the ex- penses necessary for the maintenance of public health, for maintenance of roads, for public water supply, etc., etc., and releases from this liability should be prohibited. Difficulties must, of course, arise in the case of leases, and existing contracts must be met, so far as possible, by well-considered provisions. Upon this point. Dr. W. N. Hancock, in his evidence before the Irish Committee, 1877, suggested that the difficulty could be overcome by taking the no MUNICIl'AL TAXATION. average of" the rates for three, five, or seven years back, whichever was thought to be right, and in all past contracts to add that to the rent, and divide the liability for the future. However, the Scottish system has had its administrative advantages, as the owner, being directly called upon to pay a proportion of the rates, takes an active interest in their adminis- tration. Similar beneficial results, it is antici- pated, would follow the like assessment of each proprietary interest in England and Ireland. Ill CHAPTER V. SUGGESTED REFORMS. In the preceding chapters it has been shown that no complaint is made of the amount of local tax- ation. It is not of the extent of the taxation ; it is not the sum which passes into the local treasuries — it is the manner in which it is raised which hampers the development of one class of property, and checks the energy and industry of particular members of the community. It is the in- cidence of the taxation to which we have to look. This is the only standard by which we can measure the equity of the local taxation of any country ; and this has been the concurring opinion of all who have studied the subject. We find it in the United Kingdom, and we find it in other countries ; and, turning to the leading authorities here and elsewhere, we find all agreed upon the importance of the incidence of taxation, whether imperial or local. How are the local taxes raised in the United ■Kingdom, in which it should be our special care to 112 MUNICIPAL TAXATION make every indixidual contribute according to his ability, and proportionate to the benefits received by him from municipal outlay ? It has been shown that in our local finance little attention has been paid to this maxim, and that whilst the species of property which has had to bear the entire burden has been handicapped in its development, the more favoured species has been enabled to augment to colossal dimensions. The one increases in magni- tude at the expense of the other; and even the treatment of that latter has in it the elements of unfairness. It is now proposed to state shortly the reforms which a consideration of the subject has suggested. The distinct advantages which real property de- rives from municipal institutions justify the exist- ence of special imposts upon the property itself, therefore : — 1. The larger burden of local taxation should be assessed upon real property, not in its legal sense, but including therein the soil and all at- tached to it, as houses, buildings, and permanent fixtures, irrespective of the interest, term or tenure for which it is held. 2. That, as to all local taxes assessed upon such real property, the owner should bear a portion of such taxes and rates as are levied to defray the cost of permanent works, and of the performance AT HOME AND ABROAD. II3 of those duties which partake more of a national than a local character, proportionate to their re- spective interests in such property. 3. That, in order to effect a partial relief in the amount necessary to be raised by local taxation, a percenta.e^e be added to the imperial death duties (on real as well as on personal property) payable on probates and administrations, for the benefit of the municipal authority having jurisdiction where such property is situated. 4. So that personal property shall bear a just proportion of the local expenditure, a percentage be added to the imperial income tax payable under Schedules C, D, and E. Sufficient has been said upon the equity of the first and second proposals, and on the injustice of assessing the occupier of realty for the maximum local expenditure. It only now remains to explain the advantages of the third and fourth proposals. The Imperial Government at present levies the following death duties upon probate, etc. : — ■ I. Probate duty upon probates of all wills and letters of administration ; on confirmation of testa- ments, testamentary and dative ; and on inven- tories to be exhibited in the Commissary Courts in Scotland. The duty is payable upon the value at the time of proving the will or obtaining the letters of I 114 MUNICIPAL TAXATION administration, in respect of all the personal pro- perty of a deceased and not on the value at the period of the death. The personal property liable to the duty is as follows : — ■ All Government, bank, or other stock, funds, annuities, bills, etc. ; all stocks, shares, and se- curities of every kind which may be bought and sold in these as well as in the foreign countries where the undertakings were inaugurated or have offices ; copyhold property which descends to the executors or administrators ; leasehold property, whatever may be the length of the term ; personal estate, of any kind, over which the deceased had a general or absolute power of appointment, or, in other words, a right to dispose of in whatever way he might have thought fit ; the purchase money of freehold property which the deceased may have during his lifetime entered into a written binding contract to sell, although the time for completing the purchase may not have arrived ; and the value of any vested reversionary interest. Property in several colonial banks is exempt from probate duty, as likewise copyhold and free- hold property which descends to the heir-at-law, whether the latter is or is not subject to ground rent or other charges ; also personal property of any kind over which the deceased had a power of AT HOME AND AIJROAD. II5 appointment, but restricted by the instrument under which the power or trust was created ; money agreed to be paid for the purchase of free- hold property, although the time for the com- pletion of the contract had not arrived ; or on any contingent reversionary interest. In the latter case, the duty must be paid when the property becomes vested. The scale of duty is : under £100, no duty is payable ; over £100 and under ^300, not de- ducting debts, ;^i los. duty; on estates over ^100 and not above ;^500, two per cent. ; over ;{!'500 and not above i^i,ooo, two and a quarter per cent. ; over i^i,ooo, three per cent. II. Succession duty is payable upon every description of property by reason whereof any person has or shall become beneficially entitled to any property, or the income thereof, upon the death of any person either immediately or after any interval, either certainly or contingently, and either originally or by way of substitutive limita- tion, and every devolution by law of any beneficial interest in property, or the income thereof, upon the death of any person to any other person, in possession or expectancy. III. Legacy duty is payable upon the value of all legacies, whether specific or general. The scale of duty upon successions and legacies I 2 Il6 MUNICIPAL TAXATION is a percentage varying according to the degree of consanguinity of the successor or legatee of the deceased. IV. Account ; V., Estate ; and VI., Corporation Duty. We see that probate duty is only payable upon personalt}%but if an additional schedule was added to the forms at present in use, to contain the de- scription and capital value of all the realty, of whatever tenure, the deceased died possessed of, distinguishing the localities where it is situate, ample material would be provided for the assess- ment of the local death duty. The local death duty could be assessed upon the aggregate of the personalty and capitalised value of the realty possessed by the deceased, and added to and collected with the existing imperial probate duty in a manner similar to the per- centages and surtaxes levied by the local authori- ties in America, France, Germany, etc., and which will be referred to later on. Like the probate duty, the local duty should be payable by the executors or administrators of the deceased ; and when paid, the Inland Revenue authorities could allocate the amount realised by the assessment upon the realty (including leaseholds) among the local authorities having jurisdiction over the area in which it is situated, each such local authority receiving a sum AT HOME AND AUROAI). II7 proportionate to the value of such reaUy (including leaseholds) within its jurisdiction. The local duty upon the personalty (excluding leaseholds) to be added to and applied in the same manner as the amount received from the municipal percentage to the imperial income tax. Such a local death duty would be reasonable and just. Every class of property benefits by communal life and communal enterprise. If a demand is made on property for local works, all property should then be subject to the claim. The owner cannot complain because the duty would not become payable until after his death, and as he is assumed to be the absolute owner, and to have complete control over the disposition of his pro- perty, his successors or legatees cannot complain. It would be a tax, therefore, only on those who have no vested interests in the property taxed. They may only exist in expectancy of a future benefit, and no one can allege that the intrinsic value of the property taxed will be lowered by the levy of the duty. The practice, introduced by Mr. Goschen, M.P., of allocating one half of the imperial probate duty in relief of local taxation favours the adoption of the municipal percentage. In 1 89 1 probate and succession duty was paid upon the following sums; — - ii8 MUNICIPAL TAXATION England Scotland Ireland i United 1 Kingdom! Net value of j Gross value of property (after Net value of property allowing debts, property assessed to etc.) upon which' assessed to , , probate duty. probate duty succession duty.' Pi'oDate ana was charged. 157)871,000 144,418,000 IS-338.000 13,754,000 8,360,000 7,157,000 Total net value of property assessed to both succession duty. £ £ 40,629,000 185,047,000 4,616,000 18,370,000 4,805,000 11,962,000 181,569,000 165,329,000 50,050,000 215,379,000 Now as regards the fourth proposal. The imperial income tax is levied from year to year, and under the authority of an Act of Parliament passed annually, which determines the amount of the tax for the current financial year — that is, for the year which begins on the 6th April and ends on the 5th April following. Speaking generally, we may say that everything in the nature of pro- perty which produces, or is capable of producing, or itself consists in, an annual income or revenue, is the subject of the taxation we are now consider- ing, if either the property is situate, or the income enjoyed, in the United Kingdom. For the purposes of classification and distinction, and for applying the provisions of the various Acts relating to the income tax, the several kinds of property in respect of which the duty is granted are arranged in five " Schedules," each schedule AT HOME AND ABROAD. II9 being marked alphabetically, and each containing a description of one kind, or class, of property. Schedule A. Under this schedule the duty is charged " for and in respect of the property in all lands, tenements, hereditaments, and heritages in the United Kingdom," for every twenty shillings of the annual value thereof. The word property is used to designate the interest in land of the " owner," as distinguished from that of the " occu- pier." The duty is therefore imposed upon, and has ultimately to be paid by, the owner, and not by the occupier of land. True, it is generally paid in the first instance by the occupier, who deducts what he has so paid from the rent he pays to his landlord. The general rule enacted for ascertaining the annual value is " The annual value of lands, tenements, hereditaments, or heritages, charged under Schedule A, shall be understood to be the rent by the year at which the same are let at rack rent, if the amount of such rent shall have been fixed by agreement commencing within the period of seven years preceding the 5th April next before the time of making the assessment ; but if the same are not so let at rack rent, then the rack rent at which the same are worth to be let by the year." Under Schedule B the duty is chargeable on the occupation of lands, etc., as are comprised in Schedule A, except dwelling-houses, with their I20 MUNICIPAL TAXATION offices, not occupied with farms of land, or tithes, for farming purposes, and except warehouses, or other buildings, occupied for the purpose of carry- ing on a trade or profession, for every twenty shillings of the annual value thereof. The duty we thus see is imposed under this schedule on, and has to be paid by, the occupier, and not by the owner. In Ireland this tax is assessed upon the Government valuation, and the Commissioners allege that this assessment cannot be reduced even where the occupying farmer shows conclusively that his annual profits fall far short of the Govern- ment valuation. In England, where the rack rent is taken as the basis for assessment, this rule cer- tainly does not apply. It is now optional with farmers to elect to be assessed to the duties of income tax under Sche- dule D, in lieu of the assessment under Schedule B. Schedule C deals with interest and dividends payable out of public funds, and is not of much general importance, as the tax upon such securities is deducted from the interest or dividend, and the balance alone paid. The duty extends to all public annuities wherever payable in Great Britain or elsewhere ; and all dividends and shares of such annuities respectively. The exemptions from this schedule are the stock, etc., of friendly societies, savings banks, and charitable institutions. AT IIOMK AND AIJROAD. 121 We now come to the principal schedule, namely, Schedule D. Under it, duty is charged " for and in respect of the annual profits or gains arising or accruing to any person residing in the United Kingdom, from any kind of property whatever, whether situate in the United Kingdom or else- where ; and for and in respect of the annual profits or gains arising or accruing to any person residing in the United Kingdom from any profession, trades, employment, or vocation, whether the same shall be carried on in the United Kingdom or elsewhere ; and for and in respect of the annual profits or gains arising or accruing to ariy person whatever, whether a subject of Her Majesty or not, although not resident within the United Kingdom, from any ■ property whatever in the United Kingdom, or any profession, trade, employment, or vocation exercised within the United Kingdom," for every twenty shillings of the annual amount of such profits and gains ; and " for and in respect of all interest of money, annuities, or other annual profits and gains not charged by virtue of any of the other schedules," for every twenty shillings of the annual amount thereof. The sources from which annual profits or gains chargeable under this schedule arise are divided into six classes, and for the case of each of those six classes there are provided special rules for 122 MUNICIPAL TAXATION ascertaining the duties payable, some of the rules being common to more than one of the classes. The simple rule in arriving at the sum liable to duty is to include all moneys received or due (except bad debts), and to deduct from the sum- total nothing but the necessary and actual expenses of carr}'ing on business. No sum can be deducted for interest on capital employed, money expended in buildings or im- provements, annuities payable out of profits (to a retired partner or otherwise), or moneys recover- able under insurances or indemnities. Voluntary payments, although often essential to the success of a business, cannot be deducted in estimating profits. A sum is allowed for ordinary repairs on a three years' average. Wear and tear and depre- ciation of machinery, etc., is also considered. In calculating income, no personal expenditure is to be taken into consideration. A man's income is considered that which comes to him, not what he saves and puts by. Therefore the rent of a dwell- ing-house, the cost of supporting a family, etc., is not a deduction from income under the Acts, but rather an application and use of income actually received. One most reasonable exception is made to this rule. The tax-payer may deduct the pre- mium on assurance of his life, or that of his wife, where the sum is payable either at death or on the AT HOME AND ABROAD. 1 23 attainment of a certain age, cither in a bulk sum or as an annuity, and either for the benefit of the next- of-kin or of the widow or children of the assured. Although a married woman now retains full con- trol and ownership of her property, and can prevent her husband touching a penny of it, yet husband and wife living together are still to be taxed as one person — that is to say, the husband must include in his return his wife's income as well as his own. Where one individual carries on two or more busi- nesses, the losses of one may be set off against the profits of the others. Under Schedule E the duty is charged " for and in respect of every public office or employment of profit, and upon every annuity, pension, or sti- pend payable by Her Majesty, or out of the public revenue of the United Kingdom," except annuities charged to the duties under Schedule C, for every twenty shillings of the annual amount thereof. Where the total income from all sources is less than £150, no duty is payable by the individual ; but public companies paying dividends to him will deduct, in most cases, the tax. In such a case a refund can be obtained. Where the total income is over £150, but less than £400, no duty is charged on the first £120 thereof Such are the properties and incomes liable to 124 MUNICIPAL TAXATION the duty. \Vc have given nothing more than a brief outline of the principles, as many subtile dis- tinctions exist as to what is income and what is not. We have seen, however, that the regulations now in force make no distinction between a pre- carious and settled income, causing the tradesman or professional man, whose revenue dies with him to pay as heavily as his neighbour who has inherited or acquired property, of which those dependent upon him will not be deprived by his decease. Speaking upon the Budget of 1848, Cobden dwelt upon the inequalities of the income tax, which was then still talked of by Chancellors of the Exchequer as a temporary measure. " Make your tax just," he said, "in order that it may be per- manent. It is ridiculous to deny the broad dis- tinction that exists between incomes derived from trades and professions and those drawn from land. Take the case of a tradesman with £10,000 of capital ; he gets £500 a year interest, and £500 more for his skill and industry. Is this man's £[,000 a year to be mulcted in the same amount with the £1,000 a year derived from a real property capital of £25,000 ? So with the cases of profes- sional men, who literally live by the waste of their brains. The plain fair dealing of the country revolts at an equal levy on such different sorts of property. Professional men and men in busines.s AT HOME AND AP.ROAD. 125 put in motion the wheels of the social system. It is their industry and enterprise that mainly give to realised property the value that it bears ; to them, therefore, the State first owes sympathy and sup- port." Again, under the present system, when a man has passed the £400 limit, he has to pay as heavy a percentage on his income, precarious or perma- nent, as the wealthiest millionaire amongst us. It is no wonder, therefore, that a demand should be growing for a graduated income tax. Mr. Chamberlain, speaking in 1885, said : " Is it really certain that the precarious income of a strug- gling professional man ought to pay in the same proportion as the income of a man who derives it from invested securities.'' It is altogether such an unfair thing that we should, as in the United States, tax all incomes according to amount. . . . Prince Bismarck, some time ago, proposed to the Reichs- tag an income tax to be graduated according to the amount of the income, and to vary according to the character of the income. We already have done something in that direction in exempting the very smallest incomes from taxation ; but I submit that it is well worthy of careful consideration whether the princijDle should not be carried a little further." Within latter \'ears the demand for a graduated 126 MUNICIPAL TAXATION and progressive income tax has grown more rapidly. The adherents of the progressive tax start from the idea that taxation should, above all other consider- ations, perform a social function. Taxation, they say, should prevent the accumulation of wealth in few hands, or, at least, bring it about that the burden should press equally upon the tax-payers ; in other words, it should consider what is left to the tax-pa}-er, and not merely what is paid, and should bear upon what is superfluous, rather than upon what is necessary. The suggestion of a pro- gressive tax is no new-fangled idea. We have seen the principle regulating assessments under the Lighting and Cleansing (Ireland) Act, 1828, and the difference in the death duties, according to the degree of relationship of the beneficiary, indicates that the lav/ recognises the reasonableness of graduating the burden according to the shoulders which have to bear it. Even in the present income tax system itself we find incomes under £150 exempt, while those between that sum and £400 are subject to a reduction which lessens the per- centage of the tax. The progressive system in German}- and Swit- zerland holds good, and has not had apparently the effect of driving capital away \\hich the opponents of the s}-stem alleged would be the result of its introduction. From its vvorkin"- it AT HOME AND ABROAD. 12/ cannot be honestly argued that such a system is cither immoral in design or impossible of execution. Now, if personal property, or the income derived from it, whether graduated or not, is to bear a por- tion of the annual local burden, what better s}'stem of assessment for such purposes could be adopted than the addition of a municipal percentage to the imperial tax under Schedules C, D, and E, the produce added to that of the produce from the percentage on probates of personal property to be divided amongst the several local authorities, proportionate to the rateable valuation in each district. The percentage would be small, and as few grumble at an additional penny on the im- perial lev}% the municipal percentage would hardly be felt. The collection would be easy and, as the exist- ing machinery could be utilised, economical. Our familiarity with the income-tax has made us prac- tically forget that the law under which it is en- forced is only an annual one. But although its advent was strenuously opposed, yet no extra- ordinary hardships have followed in its train, and we have gradually understood that income is the only fair object for taxation, and that this is a truth so palpable that nothing short of stupidity can question it, and nothing but a 128 MUNICIPAL TAXATION dereliction of principle can raise a wish to im- pugn it. Of course clamour may be loud against the idea of taxing the income of property in the funds, stocks, shares, etc., for the benefit of municipal improvements ; but elsewhere we have pointed out that such improvements are as necessary to the well-being of the community, to the security and happiness of the subjects of the State, as the expense incurred upon the army, navy, or Civil Service. It would be absurd to suppose that a person having property in stocks, shares, trade, or professions should receive income and enjoy the protection and fruits of well-considered schemes of improvement of the government, whether imperial or local, without contributing to its support. The labour of the country, and every species of the property of the country, arc the sources from which all taxes must be paid ; and as Government — throughout its several grades or political divi- sions — is created for the purpose of protecting both labour and property, the expenses of government should fall upon both. No real infringement on the rights of indi- viduals would be committed by giving effect to these proposals. The magnitude of the local indebtedness is admitted — it was fairly contracted and it was increased within recent years for the AT HOME AND ABROAD. 1 29 benefit of all \\ithin the various districts. Those who now escape from contributing towards the repayment of this debt, but who would be com- pelled to do so by the proposals here made, cannot fancy that they have purchased the blessings they enjoy at too great a price. Let them briefly review the present condition of our municipalities, and recollect the miseries which the absence of efficient local administration entailed upon the inhabitants of these countries. Our cities, our villages, and our country districts have been improved, and good order and facilities for public and private employment prevail. Our comforts and conveniences have been augmented in a degree scarcely to be credited ; and according as our social wants have multiplied, they have been supplied. All such works tend to increase the national capital ; and who will cavil at the cost, or refuse to bear his just and equitable portion of its repayment? We must pay our lawful debts, and disown that conduct as a body which the least informed among us would scorn to be guilty of individually. The plan proposed is politic ; it is necessary, and pre-eminently so at the present time. Its accomplishment may for the moment be arduous, but that will be no bar to its success if its advocacy is heartily and steadily pursued. J 130 MUNICIPAL TAXATION. Undertakings from which the boldest private speculators must shrink, works wonderful as the Pyramids of old, but, unlike those mighty structures, of palpable utility, might, by the aid of each contributing his just proportion of the expense, spring up in every quarter of the kingdom. ^31 CHAPTER VI. MUNICIPAL TAXATION ABROAD. UNITED STATES OF AMERICA. It is noticeable that while in the United Kingdom and on the Continent, and indeed in most civiUsed countries, a land tax, or a tax upon land values, and an income-tax, are principally depended upon as the necessary contributions for the support of government, in the United States, apart from the indirect taxation of commodities by the govern- ment, the States, for both general and local pur- poses, depend almost entirely on direct taxation of land and personal property. Franchise taxes, or corporations' inheritance tax, and some other methods of raising money of minor importance, have been employed of late years in some of the States. The main dependence, how- ever, in nearly all the States of the Union for raising money for State, county, and municipal purposes, is a general tax levied upon land and upon the mass of the taxpayers' personal property. J 2 132 MUNICIPAL TAXATION Each State devises its own system of taxation, and the way in which taxes are levied is as follows : — The legislature of the State determines upon the probable amount of money required for State purposes from year to year, and it votes that amount. This is apportioned upon the cities and towns according to their ability to pay, as shown by the returns of their taxable property. The County Commissioners of each county, whose duty it is to look after the public highways, bridges, and other county matters, determine about how much they will require, and it is apportioned in like manner among the cities and towns of each county. The cities and towns determine the amount required to meet their own local expenditure, and to this they add the quotas apportioned upon them by the Legislature and the County Commissioners, col- lecting the whole hum at the same time once a year. Then the State quota is paid into the State treasury, and the county quota into the county treasury. This system seems to be quite simple and inexpensive. At all events, it is democratic. The assessment is almost universally made a matter of record. This record is called the roll or list. This roll contains the names of the persons taxed, the description of the personal property AT HOME AND ABROAD. 1 33 owned by each person, the value of it, and the amount of the tax ; a description of the land owned by each person, the number of acres, the situation and the value, with amount of tax and the total amount of tax assessed upon each person for all the property listed. In many of the States the roll enters minutely into detail, giving the various classes of personal property — as household furniture, money, bonds, stocks, etc., and as to real estate, giving the value of land and buildings in separate columns. The licence and probate taxes are not placed on the roll, but in some States where a poll-tax is levied it is so inserted. Generally the owner of property is required to deliver to the assessor a list containing a description of all his taxable property, and from this the assessment is made : but the assessor is not concluded by this statement of the owner as to the property included, if he has reason to believe the statement is not a true one ; and in such case, or where the owner omits or refuses to deliver the list, he may proceed upon the best information he can obtain to make a correct assessment, adding property omitted by the owner. Nor where the statute enumerates certain sources of information for his guidance in ascertain- ing who is to be taxed for certain property and its value, is he bound by them. These are only to aid him in doing that which is essential to ascertain 134 MUNICIPAL TAXvVTION the amount of taxable property and the names of the persons taxable. The estimate of the vahie is a judicial act. The assessors are chosen specially to perform this duty, and their decision is based upon all the information they possess, whether derived from the owner or otherwise. In many of the States, in some by constitutional provision and in others by legislative enactment, the lands in the State are required to be valued at regular intervals of time varying from five to ten years, by persons specially appointed for the purpose. In others the valuation of lands, like that of personal property, is annual, made at the time of making the list ; and even in those States where there is a periodic valuation, the assessors in making their annual assessment add to the land theretofore valued the increased value by reason of improvements which have been placed on it since the last periodic valuation ; but in all other respects they follow such valuation. Where a statute requires an increase in valua- tion, " if any building or addition is erected on any lot," such language does not apply to an addition to the height or depth of a building, or changing the interior structure thereof, but only to a lateral addition. The value of improvements on land is often placed in a separate column. In the States AT HOME AND ABROAD. 1 35 where mining is conducted, these improvements, where owned by a person other than the owner of the land, are sometimes assessed separately as personalty ; otherwise, they are included in the value of the land. The question, How is land to be valued, or upon what basis ? has given rise to much discussion in the different legislative bodies. The difficulty is generally to obtain a uniform valuation through- out each State, so that each part of the State may bear its appropriate part of the burden. This difficulty arises whatever may be the standard of valuation, and an attempt has been made to obviate it by boards of equalisation, to be here- after explained. In Michigan and California the standard is the cash value ; in New York it is at " a sum which the majority of the assessors decide to be the true value thereof, and at which they would appraise the same in payment of a just debt due from a solvent debtor"; in Virginia, at the cash value, which is ascertained by fixing the value thereof upon the usual credits in the neighbour- hood, and rebating interest when interest is not usually allowed on deferred payments. The expression in most of the States is either " cash value," " fair cash value, ^' " at its time value in money," or " in read}' money." In Iowa it is at its time cash value, having regard to its qualit}-, 136 MUNICIPAL TAXATION location, natural advantages, general improvements in its vicinity, and all other elements of value. In Arkansas, water privileges are specially desig- nated as an element of value; and in Illinois the value of growing crops is expressly excepted as an element of value. The substance of this provision is the same in each State, the assessment being based on the value of the land, looking to all the circumstances of its surroundings, or what may be regarded as the cash market value. The income derived from land is not considered the proper criterion in ascertaining this value ; and especially when contrasted with the price which the land brought at a recent public sale, the latter is always regarded 2l% prima facie correct. The result arrived at by comparing the authori- ties on the subject seems to be substantially that which is expressed in the Iowa statute — that all the elements of value are to be considered in assessing land, and an exemption of buildings in a town is invalid where the constitution requires property to be assessed ad valorem. A mortgage on land is not to be deducted from its value in assessing the tax, but in some of the States the mortgagee is allowed to deduct the mortgage debt, and other debts, from the amount of property which he returns for taxation. As a general rule, the tax on land is a personal AT HOME AND ARROAD. 1 37 charge against the owner. In the statutes of all the States there is something to indicate this, and almost universally the collector is required to make the tax out of the go^ds and chattels of the person assessed with the tax. The name of the owner of the land, or of the occupant where the statute directs it to be assessed to the occupant, is an essential ingredient in the description of the land. It is the right of every citizen to know for what property he is assessed and is required to pay taxes, and in those States where the law allows land to be assessed as unknown, it is only on condition that the name of the owner cannot be found. There are exceptions to this proposition as to certain classes of land in particular States. Thus, in Pennsylvania, uncultivated lands are assessed without particular reference to the ownership ; in Maine and in Massachusetts, " unimproved lands of non-residents " ; and in Illinois all lands are assessed as lands, without any reference to the person who may own them. The land, and not the owner, is considered the debtor for the tax. As to all such lands, the name of the owner is not essential. The person holding the legal title is the person to be assessed with land, unless by special pro- vision the statute directs otherwise. It is the fee- simple in land that is assessed. The law does not 138 MUNICIPAL TAXATION rcL,^ard the different interests in the assessment. It looks to the person having the present right of enjoyment, whether tenant for hfe or years, for the tax on the fee-simple value of the land and the improvements — i.e., buildings thereon — and such person is the one to be assessed with the land. By statute in Pennsylvania, where one party owns the coal and another the land, each party is assessed with his interest — one with the land and the other with the coal. So with rents issuing out of land, the owner of the rent is assessed with it as per- sonalty, and the owner of the land with it as realty. Irrespective of the name of the owner, there must be a description of the land on the roll, not only that each person may see that his land is properly assessed, but also because in case the land is sold for non-payment of taxes, as hereafter explained, the title of the purchaser depends on the accuracy of the description on the roll ; he becomes the purchaser of the tract described on the roll, and it is important that it should be so described that it can be easily identified. The sweeping character of the enactments of the several States on the subject of taxation of personal property can be best appreciated by a reference to the provisions of the laws of New- York State defining personal property liable to AT HOME AND ABROAD. 1 39 taxation. The statute, after enacting that "all personal estate within the State, whether owned by individuals or by corporations, shall be liable to taxation," subject to the specified exemptions, pro- vides as follows : — " Section 3. The term personal estate and per- sonal property, whenever they occur in this chapter, shall be construed to include all household furni- ture, money, goods, chattels, debts due from solvent debtors, whether on account, contract, note, bond, or mortgage, public stock, and stocks in moneyed corporations ; they shall also be con- strued to include such portion of the capital of incorporated companies liable to taxation on their capital as shall not be invested in real estate." This definition of personal estate or personal property is intended to embrace everything that can be conceived of as included in these general terms, and it is reasonably successful in its pur- pose. In fact, personal property consists, under the laws of the State, of bonds, mortgages, and other forms of capital ; food, clothing, and the things necessary to satisf)^ human desires. The statute is somewhat confusing in its reference to the stocks and capital of corporations. The practical effect of its provisions, taken with others bearing upon the same subject, is that sub- stantially all corporations of the State, except 140 MUNICIPAL TAXATION banks, life-insurance companies, and savings banks, are liable to taxation upon all their personal pro- perty, exccjjt stocks in other companies. The same rules apply to personal property as to real estate. It is to be assessed at the true market value in cash. Two methods have been emplo)'ed in the United States for the purpose of ascertaining the amount of taxable personal property owned by indi\idual citizxns. 1. In several States, such as Massachusetts, Connecticut, and Illinois, the taxpayer is required to give each year to the assessor a detailed and verified statement, careful!}- itemised, of all the personal property owned by him or under his control, and of every kind, sort, and description. This method is generally known as "the listing s}'stem." In several States the principle that a State can tax only that which is within its terri- torial jurisdiction is ignored, and even visible, tangible property situated outside of the taxing State is required to be returned for the purpose of taxation. 2. The other and more general method of ascertaining taxable personal estate is that with which the citizens of the New York State are familiar, by which the assessor guesses at the personal property of the individual, and places him AT HOME AND ABROAD. I4I upon the list at such a figure as either his informa- tion or imagination sustains him in considering to be that which justly represents the personal estate of the taxpayer. It is obvious that in cases of special partner- ship.<5, trustees, and executors who may have recently accounted, persons who have taken estates upon the settlement of which inventories or accounts may have been filed, and, indeed, in all cases where a record of the transactions of personal property has been made, a vigilant assessor is reasonably successful in reaching all the personal property of the individual ; and also where the property is of a tangible and visible nature, such as stock, cattle, and horses — especially those in the hands of farmers, the details of whose affairs are well known to their neighbours. Beyond these the assessor cannot go with any certainty. He has absolutely no resource except to guess at the assessment from the place of business or residence of the taxpayer. If the tax in such a case is paid cheerfully for two or three years, the personal assessment is usually then increased periodically until the taxpayer cries out against it. When this happens, the assessor is generally sure that the limit of actual ownership of personal property has been reached, if not passed, by his efforts. As might be expected, the operation of this 142 MUNICIl'AL TAXATION system in New York State results substantially in the collection of no tax on personal property except from three classes of taxpayers : — (1) Corporations who are obliged to make sworn returns, not only to the assessors but also to other public officials. (2) Executors, trustees, and in cases of partner- ships. (3) Those who arc too conscientious, too care- less, or too ignorant to arrange their affairs in such a manner as not to be liable for taxation on this class of property. It is absolutely essential to the maintenance of the supremacy of the Federal Government within its own sphere that the taxing power of the States should not extend to the obligations of the general government. The sovereign power of the State of New York, therefore, cannot reach for purposes of taxation the instrumentalities of the United States Government. This law affords people who own personal property an opportunity of evading any assessment by converting such property into Government securities. Another matter to be borne in mind in this connection is that the situs of an individual for purposes of taxation upon personal property in New York State is fixed by his place of residence and ownership of property upon a day certain, AT HOME AND ABROAD. I43 when the assessors have completed their pre- hmhiary inquiries, have arranged their assessment rolls, and open them for correction. Throughout the State of New York, generally, that day is the 1st July. In the city of New York it is the second Monday in January, What a man owns in personal property in the city of New York on the day specified, and the manner in which his investments are made upoii that day, determine the question whether or not he is taxable for personal property. The different dates upon which assessment are made in Brooklyn, Jersey City, and New York City, furnish an additional facility for evasion of personal property by transfers of ownership on subjective sales. Still another element in the combination is the principle that in New York State the debt of the taxpayer can be deducted from his assessment. The extent to which taxation upon personal property is evaded is evidenced by the official returns. In 1890 New York County was assessed on .^220,000,000 of personal property. A recent writer stated that, as a matter of fact, about $1,500,000,000 of taxable personal property was mostly hidden. That the $1,500,000,000 repre- sented an average of $1,000 to each man, woman. 144 MUNICIPAL TAXATION and child, and the personal property in the shape alone of food consumed was about equal every day to the highest figure that has been set on the valuations of all forms of personal property. In the city of Baltimore the assessed value of all property liable to taxation in 1891 was $276,408,052, upon which was paid a State tax of 17 J cents, and a city tax of Si. 5 5 per Si 00.00. The State tax of I7f cents was made up of: — (i) Levy for public school tax 10^ cents per 8100. (2) Levy for defence redemption tax at 5} cents per $100. (3) Levy for treasury relief tax at li cents per $100. (4) Levy for exchange loan of 1886 tax at -} cent per 8100. In New York in 1886 the assessed valuation of all taxable property was 1,371,117,003 dollars, viz. : — Dollars. Real estate 1,168,443,137 Personal estate 202,673,866 ^ i,37i>ii7>oo3 and the tax rate was 2.40 dollars per cent. In 1888 the assessed value was : — Dollars. Real estate 3,122,588,084 Personal estate 346,611,861 The real estate paid 90*0 1 per cent, of the State AT HOME AND ABROAD, I45 tax, and the personal 9^99 per cent, of the State tax. In 1889 in the State of Illinois the percentage of taxation was 3"4i per 100 dollars of assessed value. The amount levied Dollars. For local purposes was ... ... 26,659,382.48 For State purposes ... ... ... 4,318,959.19 Total levied on real estate ... 30,978,341.67 and the percentage of the amounts raised by taxa- tion on real and personal estate were as follows : — Dols. Real estate 79.82 per cent. Personal estate ... 20.18 per cent. In Iowa in 1889 the equalised value for taxa- tion was 522,567,477 dollars, the percentage being 2'8 per 100 dollars of assessed value. The amount levied Dollars. For local purposes was ... ... 13,484,185.57 For State purposes ... ... ••■ 1,248,100.77 Total amount levied ... 14,732,286.34 Real estate was taxed at above 40 per cent, of the total amount raised. In some States poll and income taxes are levied. In Ohio and Maryland, poll taxes arc declared K 146 MUNICIl'AL TAXATION oppressive and prohibited, but in some other States they can be levied as follows : — (i) Not to exceed i dollar a head, Rhode Island, ^'irginia, West Virginia, Tennessee, Arkansas, .South Carolina, Georgia, and Florida. (2) Not to exceed 1.50 dollars a head, Alabama, Louisiana. (3) Not to exceed 2 dollars a head, North Carolina. (4) Not to exceed 4 dollars a head, Nevada. (5) Not less than 50 cents a head, Tennessee. (6) Not less than i dollar a head, Texas and Ten- nessee. (7) Not less than 2 dollars a head, California and Nevada. In several States poll taxes are to be applied exclusively to the common-school fund. In Virginia, North Carolina, Tennessee, Texas, and California, income tax may be imposed, but in Virginia it is limited to incomes of over 600 dollars a year, and in North Carolina and Ten- nessee it cannot be imposed on incomes derived from taxed property. For the supply of water and light, special charges are made in different cities. In New York the average charge for water per dwelling is $6 ; in Chicago, $14; Philadelphia, $9 ; Brooklyn, $8; St. Louis, 1^14; I^oston, !:>I2; Baltimore, .^7; San Francisco, $20; New Orleans, S25 ; and Wash- ington, $4.50. AT HOME AND ABROAD. I47 In addition to the general tax levy as before explained, cities derive revenue from licences, market rents, ferry and dock-rents, street railroad and elevated railroad franchises, bridge tolls, water and light rents, street vault rents, fines and penalties, fees, and a large number of other mis- cellaneous sources, amounting in New York City in the year 1886 to about nine million dollars. In the same year the general tax levy yielded over thirty- one million dollars, which included the city's proportion of the State tax of over four million dollars. Quite a large revenue is derived in large cities from the licences granted to liquor dealers. These latter arc obliged to pay to the city or town in which they arc permitted to do business a con- siderable licence duty every year, in addition to i^5 a year of special internal revenue tax. licences arc not granted to premises as in the United Kingdom, but to individual citizens. Taxes are collected in advance. In Philadel- phia the taxes for 1893 are payable from January in that year, and if payment is made before the 30th June, a discount of i per cent, is allowed on the cit}^ taxes, but no deduction is allowed on the State tax. If not paid before the ist July, a penalty of one-half per cent, is imposed, and so on, the penalty increasing in amount at later periods K 2 14^ MUNICIPAL TAXATION of the year. The taxes become delinquent after the end of December of the current }'ear. The usual mode of collecting the tax is that the roll or list is placed in the hands of the collector, whose duty it is to collect the taxes and account for them to the proper officers designated by statute. When in the hands of the collector, it is not merely an account to be collected, but it has the force of an execution, which the collector may satisfy by levy or distress of the goods and chattels of the taxpayers. It has all the force of an execution issue from a court, upon a judgment regularly obtained. The personal estate of the taxpayer is the primary fund for the payment of the taxes. This is the general rule, but it may be, and often is, changed either by express provision of statute or by implication, as in those cases where the tax is imposed on the property as such m ithout refer- ence to the ownership, and the proceeding to enforce pa)'ment is a proceeding in rem. Such is the case in Massachusetts and New York, as to lands owned by non-residents, which have a distinct legal character. In some States the collector is authorised, if the taxpa}'er refuses or neglects to pay, to seize the body of the delinquent and imprison him, or upon such refusal or neglect, an application ma}' be AT HOME AND ABROAD. 1 49 made to a court having jurisdiction of the person, and its payment enforced by attachment, fine and imprisonment. There is no hen on real estate for taxes due on personal property, the poll tax or licence tax, unless it is created by express statute. When the collector fails to make the tax on real estate from the goods and chattels of the person charged, it is usual to provide for the sale of the real estate, or so much thereof as will provide for the payment of the tax. But some- times a harsher mode is adopted, and the land is declared to be forfeited to the State. In Louisiana the forfeiture is accomplished by sending the delinquent-list to the auditor, then it is filed and recorded. The recording is considered a seizure of the land. In some of the States, as Ohio, North Carolina, and Illinois, the forfeiture is consummated in a different mode. When land is sold for non- payment of taxes, if no one bids a sufficient amount for the whole tract to pay the taxes, it is struck off to the State ; and when these lands thus owned by the State have accumulated, they are sold. Where lands are forfeited they may be redeemed. In New York, taxes on real property not paid for two years, from the ist of May following the date on which the tax was laid, are enforced by sale. 150 MUNICIPAL TAXATION Lists of such lands arc sent to the county and city officers eighteen weeks before the sale, and published weekly for ten weeks previous to the sale in two newspapers of the county where the land is situated; and notice of sale, which always takes place at Albany, is published for twelve weeks preceding, in county newspapers. Sufficient of each parcel of land to pay taxes, interest, and expenses of sale is sold ; the surplus, if any, is held in trust for the former owner. The purchaser at the sale receives a certificate describing the property and the amount paid therefor ; and if no previous redemption, he is entitled to a deed at the expiration of two years from the last day of sale. The officer must publish, in two newspapers of the county, a description of the land, and the amount necessary to be paid for redemption, weekly for six weeks ; the last notice must appear at least eighteen weeks before the expiration of the time for redemption. Land may be redeemed within two years from the time of sale on payment of the amount paid by the purchaser, with 10 per cent, interest ; if no redemption, the controller then executes a conveyance- vesting in the purchaser the absolute estate in fee simple. If at the time of such conveyance the lands are in the immediate occupancy of persons other than the purchaser, the latter must serve notice upon such persons of AT HOME AND ABROAD. 151 the sale and conveyance, within two years after the time for redemption expires. At any time within six months after such notice, the occupant, or any otlier person, may redeem, on pa}-ment of the consideration mentioned in the conveyance, with 37^ per cent, interest on such sum, and charge of executing the deed. Within two years of the time of the tax sale, mortgagees must file a record of their mortgages in the proper office, or else they will be deemed to have abandoned their claim upon the land, and the purchaser takes free from mortgage. The purchaser at any time after receiving his convey- ance can serve a notice on such mortgagees as have filed their records, requiring them to reedem the lands within six months by payment of the purchase price with interest. If payment is made, it is deemed to be included in the mortgage ; if not made, the purchaser takes free from mortgages. The Boards of Equalisation before referred to, have been long established in the United States, and it is now sought to introduce the system into the United Kingdom, where many defects exist in the unequal distribution of the public burdens. In the United States the roll or tax list is usuall}' open for inspection and correction of errors for a certain period, while in the hands of the assessors, and then an appeal is allowed to some 152 mumch'AL taxation local tribunal invested with jurisdiction over such matters. In some of the States, no period is allowed for correction b}^ the assessors after the roll is completed, but application is made at once to the tribunal designated by statute for relief In some of the States, the supervisors of the county are vested with the power of re\'ising and cor- recting the roll, in others it is a board of county commissioners, or the county court, and in others a board of equalisation ; but whatever be the name of the tribunal, its powers and the errors \\'hich it can correct are of a similar nature. The functions of those boards are twofold ; they are sometimes vested with the j)Owers of a board of review in addition to other powers, but when not invested with such powers, their duty is to equalise the assessments of a county so that all the towns of a county may bear the burden of taxation equally, or to equalise the assessments of a State so that each county may bear its proper portion of the burden. In the latter case it is called a State board of equalisation. The boards of equalisation for counties are generall}' composed of some local officers of the county, and have not only the authority to equalise by adding a per- centage, but they are also vested with the power to review and correct the assessments made by the assessors. AT HOME AND AISROAD. 1 53 Tlic manner in which the assessment is equal- ised is different in different States. In Iowa, New Jersey, lUinois, and Ohio the board add to or deduct from the aggregate valuation of property in the roll such per centum as will raise or reduce it to the proper valuation. These boards cannot assess land or other property omitted from the roll by the assessors. Their function is to increase or diminish the valuations, or correct the errors as to property on the list. While they have the power to correct the valuation of particular individuals on application, they cannot increase the valuation on the property of a taxpayer without notice to him.. Where it appears that the assessors have valued rents reserved on leases to non-residents at their full value, while other property in towns of the county is assessed at not over one-third of its value, this is such an equality as the board has power to correct, and if they refuse they ma}' be compelled to act by mandamus. BETTERMENT. In a previous chapter we referred to the system of local assessment or " betterment " which prevails in the United States. In the opening of streets, the grading and pav- ing of streets, the constitution of sewers, the laying of water-pipes in cities, and in the construction of 154 -MUNICIPAL TAXATION drains and levels in agricultural districts, the ex- pense of such works is very generally defrayed, not by a general tax on the whole State, or even on the whole of the political sub-division in which the works are constructed, but by a tax on all the real estate in a smaller district, created by the legisla- ture as a taxing district. The tax thus laid is called an assessment, or more generally a local assessment. In New York State itself every city within the territory, and many even of the villages, have had powers of this kind conferred upon them for making roads or paving streets, or laying sewers, or draining marshes, or providing public parks, or other improvements for the general convenience ; and while in most cases the special tax is laid only on owners of property actually abutting on the improvement in the measure of their frontage, in some it has been laid on all real estate benefited by the improvement in the measure of the benefit received. The power of defining the taxing district is often delegated to the council of the city, or other local officers of the State, or commissioners ap- pointed for the public improvement which is authorised. In such cases the statute indicates the principle on which the local officers are to ascertain the limits of the district in such expressions, as on AT HOME AND ABROAD. 1 55 all the real estate " benefited," or on all in the " vicinity " or on " adjoining property," or some similar expression. The equity of the tax has been again and again discussed by the judges of the supreme courts of the several States, and in- variably with the same result of an affirmative finding. The question has been raised before them in various ways, but usually either by an ordinary abutting owner who contends that the tax is dis- criminating and violates the principle contained in most of the State constitutions that all the taxation must be equal and uniform, or by a church or university claiming immunity from the tax on the ground of a special privilege granted them by statute of exemption from all taxation. Tlie answer has been very much to the same purport in all the different States. The judges have taken their stand on the broad principle that they who reap the benefit of a public work ought to bear the burden of it, and where the benefit is discriminating, the burden, to be equal, must be discriminating likewise. " A local assessment," cites Mr. Bur- roughs, in his " Law of Taxation," " is an equivalent or compensation for the enhanced value which the property of the person has received for the improve- ments. 'Tis only because of specific benefit that specific property is taxed for a specific purpose. The assessment on property is therefore laid with 156 MU MCI PAL TAXATIUN reference to the benefit which such property is supposed to receive from the expenditure of the money." The Hmit of local assessment clearly appears^ therefore, to be the benefit received. Any tax be}'ond that is an exaction from the owner of more than his just share of the public burden. It ceases to be taxation, and becomes a taking of private property for public use without just compensation. Some States expressly protect the local owners from excessi\-e exactions by imposing a maximum limit on these assessments. The doctrine which has been laid down b)' the American courts in dealing with those cases, is that a local improvement possesses al\va)'s more or less of a private character, notwithstanding that it may be undertaken under public authority ; but what- ever doctrine or reason is laid down, the decisions always substantially rest on the equitable consider- ation that the sphere of benefit ought to be the sphere of burden, and that just as it would be wrong to tax individuals alone for improvements from which all alike benefit, so it would be equally wrong to tax all alike for the improvements from which particular individuals receive the lion's share of advantage. The benefits taken into account must be direct, and not remote. In considering benefits with a AT Ii(3Ml': AND ABROAD. 1 5/ view to a sct-oiT in compensation cases, they ex- clude contingent, consequential, prospective, and general benefits, such as the property shares with all other property in the town. Where the expense is directed to be placed "upon the adjoining pro- perty " in case of a street assessment, the courts of New York claim that it only applies to property contiguous to the street, and not to property ad- jacent but separated from it ; and a lot separated from a street by a narrow strip is not considered as fronting on the street, so as to be assessed ; but an owner whose lot fronts on a street cannot withdraw it from liability to assessment by conveying away a ribbon fronting on the street, after the ordinance for the improvement of it has been passed. The benefit received is usually determined by a board of commissioners, or assessors, who view the premises, ascertain what will be the increased value of all the property in the designated district, and what is the increased value of each lot of land. The increased market value of the lands is the true rule of assessment, and it is proper to consider all the circumstances which give increased value by reason of the improvement. As a general rule, the assessment is solely made upon land, and not on personal propert}'. If the di.itrict is defined dcfinitel}^ all land in the district is liable, without reference to the use or purpose to 158 MUNICIl'AL TAXATION which it is devoted. Neither as a rule can the owner be personally assessed. Where " the city engineer was directed to assess the cost of improve- ments, make out certified bills against each lot in the name of the owner, which were to be delivered to the contractor for the work, who should proceed to collect the same by ordinary process of law in his name, each certificate to be a lien on the lot of ground described therein," this statute was construed not to authorise the contractor to sue the owners of the lots. "Ordinary process of law" as to local assessments was held to mean such process as is adopted to enforce a lien or specific charge upon the property specially assessed. "The sole object," says Justice Bliss, " of a local tax being to benefit local property, it should be a charge upon the property onl)-, and not a general one on the owner. The latter, indeed, is not what is under- stood by a local or special assessment, but the very term would confine it to property in the locality ; for if the owner be personally liable, it is not only a local assessment, but also a general one as against the owner." If there can be a personal assessment, or the owner can be made personally liable for the tax which is imposed upon a lot of land, upon the theory that its pecuniary value is increased by the improvement, the lot may be sold, and if there is a AT HOME AND ABROAD. 1 59 deficiency the owner ma}- be required to pay it; or, in other words, for the benefit conferred on the property the property may be confiscated, and the owner, for the privilege of having it confiscated, may be required to pay a tax into the City Treasury. Upon the whole, this s}'stem of local assessment has been found to work fairly well. It undoubtedly facilitates improvements, because it is one of the least burdensome methods of meeting the cost — alwa)-s the chief difficulty in their wa\'. The mere fact of its general adoption among a people so shrewd and practical, and containing so large a proportion of proprietors as the Americans, is a sufficient proof that it has given satisfaction. i6o CHAPTER VII. FRANCE. Before inquiring into the local taxation of this country, it may be as well to give a short descrip- tion of its divisions and form of local government so as to make the system of taxation clear. French territory is divided into eighty-six de- partments. The departments are sub-divided into 262 arrondissements; these, in turn, into 2^868 can- tons; and, lastly, the cantons into 36,097 communes. These divisions form a graduated hierarchy of local administration. No other divisions conflict with them. The canton is more judicial than adminis- trative. The representative and agent of the central power in the departments is the Prefect. In each arrondissemcnt there is a Sub-Prefect, and in each commune a Mayor. The Sub-Prefect and Mayor stand towards their divisions more or less in the same position as the Prefect docs towards his department. The Municipal Councils are elected by universal suffrage, and for three years, and in communes of MUNICIPAL TAXATION l6l more than 500 inhabitants it must not include per- sons of a near degree of relationship ; an example of the extreme wariness against undue influence of every description characterising most French insti- tutions. With the sole exception of the Council of Paris, the Municipal Councils are elected by scrutin de liste — that is to say, the electors vote for as many candidates as there are vacancies. The capital under its special regime elects its eighty councillors by scrutin d' arroJidisseinetit, each voter naming only one candidate for his quarter. In theory, Paris is but one of the 36,097 com- munes of France, though it contains a fifteenth of the whole population of the country. In Paris the sectional mayors are appointed by the Government, and there is no central mayor at all — in a word, the organisation of the capital of the country is entirely exceptional. Till lately, Lyons was another exception, but Lyons is now governed like the other chief towns. The twofold election of the Municipal Council by the citizens, and of the Mayor by the Municipal Council, is the corner- stone of a free municipal system. The Paris mayoralty is really in commission, the Prefect of the Seine and the Prefect of Police performing the duties of the office between them. These, again, are appointed by the Government, and they are absolutely irresponsible to the Municipal Council. L l62 MUNICIPAL TAXATION The Council is merely a deliberative body, the executive being entirely in the hands of the two prefects. It debates the civic budget, but it has no power to refuse the essential supplies or to order new credits. The annual municipal expenditure of Paris is of colossal proportions, and its control is only nomin- ally in the hands of the Council. The Prefect of the Seine appoints the personnel of most of the great spending departments. The Director of Public Works is named by the Government, and is independent even of the Prefect. The Director of the Public Charities is likewise a Government nominee. All the Council can do, after voting the money, is to offer a " suggestion " as to the way in which it shall be used ; the Director and the Pre- fect between them may spend it as they like. The object of the exceptional treatment of the capital is, of course, to clip its wings for such attempted flights over France as she took in 1789 and 1792, to say nothing of 1870. The City tried to usurp authority over the country, and in revenge the country denies her authority over herself. The Commune is the administrative unit, the molecule of the great structure of State. The real executive officer is the Prefect. He appoints to many offices, and, ^\•ith the help of his own Council, he prepares the budget of his department for AT HOME AND ABROAD. 163 the Council-General (Conseillers Generaux), a Parliament of the department. The department levies no special rates, and has no special fiscal officers for assessment or collection. Its revenues are ingathered with the State direct taxes. These are four in number — the land, the personal, the door and window, and the trade taxes. As regards the first three of these, the total amount to be derived from them is fixed by the Budget Act beforehand, and apportioned among the departments. The General Council (Conseillers Generaux) of the department in turn sub-divides its share among the arrondissements, and the Arrondissement Council further sub-divides its share among the communes. The fourth tax — the trade tax — is of fixed amount, and its yield is dependent on the number of persons carrying on trade. The revenues of the department are derived from a percentage added to these four State taxes. This percentage is known as the " centimes addi- tionnels " — i.e., to every franc of the " principal " a certain number of " centimes " or hundredths are added on for county or municipal purposes, accord- ing to their respective wants, and within certain limits determined bylaw. The "centime" equals the hundredth part of the total annual estimate of the four direct taxes levied in France generally, in the department or in the commune, as the case L 2 164 MUNICIPAL TAXATION may be. Thus, supposing in a commune the original total of these four State taxes is put at 20,000 francs, the centime is worth 200 francs, and in this form of centime all additions to taxation are made for local or other purposes. The collect- ing of the rates is undertaken gratuitously by the receivers of the taxes in the service of the State, so that, on the one hand, it costs the department nothing, and, on the other hand, the ratepayers have to deal with but one single tax-gatherer for all their rates and taxes. These centimes are divided into three classes — (i) ordinary or Parliamentary (legislatif) centimes; (2) extraordinary centimes ; (3) special centimes. The Parliamentary centimes are voted annually by Parliament, and place the administration of the department beyond the risk of being brought to a standstill through the vagaries of any general council. The General Council, however, decides the mode of employing them. Parliamentary cen- times are added to the land and personal taxes only. The extraordinary centimes, on the contrary, are levied by virtue of a decision of the General Council, and are raised on all four taxes. The maximum is annually fixed by Parliament, and can only be exceeded by sanction of an Act of Parlia- ment. The special centimes are an additional percent- AT HOME AND ABROAD. 165 age, authorised by Parliament for special objects, as the construction of new roads, etc. Subsidies may be granted out of the State Exchequer to needy departments, a fund of £160,000 being annually appropriated for this purpose. The departments whose rates are in- sufficient to meet the local requirements in an adequate manner, and which have to resort to the distribution of this fund, lie mostly in the moun- tainous parts of France. We thus see that the local taxation is in the main based upon the imperial direct taxation, and, the incidence being the same, we will state shortly the nature of the four taxes before referred to. I. Contribution foncicre, which is divided into two sections — the tax on lands and the tax on buildings. The distribution of the land and house tax is very different in different parts of France, and the " centimes additionnels " are variously imposed. For the purposes of valuation the land is divided into five classes, to each of which corresponds a fixed tax payable to the State at so much per hectare (2 J acres), h'or instance, for good arable land the land tax may be two or three francs a hectare ; for an enclosed park or garden four or five francs, and inferior land in proportion, with, of course, as we have stated, the " centimes addition- nels " added on for local purposes. l66 MUNICIPAL TAXATION These taxes are imposed upon all lands and buildings not especially exempt by law, and are based upon the average productiveness of the property in produce or rents during a series of years. As regards the land, the tax is levied on the net revenue, that is to say, what remains to the owner after deducting from the gross produce the cost of cultivation, sowing, gathering of crops, and maintenance. The net revenue for property in houses and buildings is the surplus accruing to the owner after deducting from the letting value or rent the amount of expenditure requisite to prevent deterioration and cost of maintenance. The French law does not for land name the exact proportion to be deducted from the gross produce ; but for houses it fixes it at a quarter of the annual rent or letting value, and for factories, warehouses, etc., at a third, it being considered that the repair of buildings devoted to trade and in- dustrial purposes is more costly than that of private houses. In forming an estimate of the taxable revenue of arable land, the assessors ascertain the nature and quantity of the crops produced without labour or expense, in conformity with the usual custom of the locality. The yield is averaged by the produc- tion of fifteen years, excepting, however, the two AT HOME AND ABROAD. 167 most abundant and the two most inferior yields. The ordinary yearly yield having been established, the expenses attending planting, cultivation, and harvesting are deducted, and the remaining amount is the revenue taxed. Gardens are rated at their renting value, which is estimated on the same basis as that of arable land, but in no case can they be rated higher. Lands devoted to ornamental purposes, such as parks, avenues, etc., are rated as superior tillable land. The estimated value of the production of vine- yards is arrived at by the same method employed in arable land valuation. A deduction of 1 5 per cent., besides the expenses attending cultivation, gathering, and pressing the grapes, is made. This deduction is allowed in view of the extra outlay for annual trimming of the vines, partial replanting, and necessary labour during the years that the vineyards are nonproducing. When the vines only live a certain number of years, and replanting is possible or removal necessary, to allow the ground to rest for other agricultural purposes, the valuation is based on the following : — I. The quantity and quality of the wine produced. II. The quality of the land on which the vines are planted, and the crop the land might produce if cultivated as arable land. 1 68 MUNICIPAL TAXATION III. The life of the vines. IV. The number of years that the land pro- duced no vines. House property is estimated in two ways. First according to its superficies at the rate of the best agricultural land, and secondly according to the annual letting value of the buildings, deducting the previous estimate of the agricultural value of the extent of the surface they occupy. The average letting value for ten years (deducting the two highest and two lowest returns) is then taken for the purpose of estimating the net imposible revenue. However, buildings are not subject to the tax until the third year after their completion. The Chambers have recently passed a measure for the exemption of sheds and agricultural outhouses of a less annual value than £2 from taxation, even when used as habitations, and the Government house tax throughout France is now fixed at the rate of 3'2o per cent. In the application of the rate of 3*20 to the total annual value of a house, a deduction of a quarter is always allowed for costs of repair and maintenance, so that on the letting price of a house of 100 francs, 2 francs 40 centimes, and not 3 francs 20 centimes, will be claimed by the tax-gatherer for the Government tax, with the "centimes additionnels " for local purposes. The real property tax, being thus a tax upon AT HOME AND ABROAD. 169 the revenue derived from a certain property in land or buildings, is due only from the person in the enjoyment of that revenue ; but any agricultural tenant may be held liable for one year's taxes left unpaid by his landlord. The different revenues for which the real estate tax has been fixed, at the time the cadastre or tax- roll has been prepared, cannot be altered whatever the improvements or deteriorations of the property may have been by either the indu.-try of the proprietor or his negligence. However cadastral revenues of land, covered or not by buildings, may be modified when in any community assessed for at least thirty years, the Municipal Council, with the assent of the General Council, makes applica- tion at communal expense for a revision and renewal of the tax-roll (cadastre). The valuation of the taxable revenue of houses and workshops may be revised every ten years. This revision is made with the authorisation of the Prefect, and is made by the assessors assisted by the controller. The mayor has to inform the taxpayers that he proceeds to the renewal of the valuation of houses and workshops, and that they may apply for a reduction within three months of the publication of the tax list from the valuation of their property. 2. Contribution persoiinelle et 7nobiHere {the per- sonal and personal property tax) is made up of I70 MUNICIPAL TAXATION two elements, one fixed and the other variable. The first is a small poll-tax of what is considered equivalent to three days of labour. This is payable by every Frenchman in France, and every foreigner of either sex who is in the enjoyment of citizenship and is not a pauper. Even miners having sufficient means of subsistence from their own fortune or employment, although when living with their parents, are liable for the tax. The General Council fixes the average price of a day's labour in each commune or municipality, but it has no power to fix it below fifty centimes or above a franc and a half. Thus the minimum of this tax is one and a half francs, and the maximum four and a half francs. It is due in the commune of the taxpayer's domicile. In case of having two domiciles, it is to be paid where the taxpayer lives most of the time — where he has his principal residence, or where he follows his profession or occupation. The other element of this tax is imposed on all those liable to the poll-tax. It is a direct annual levy of a fixed percentage upon the rental paid for all furnished apartments or dwellings inhabited by all except those exempt by law. Though this is in its main features an income- tax, it is a tax which certainly falls more on the owner of house property than on him who derives AT HOME AND ABROAD. I/I his income from sources other than houses and land. The latter, moreover, may occupy an apart- ment in no way commensurate with his income. 3. Tlie door and ivindow tax is levied and as- sessed on all doors and windows opening into streets, courtyards, and gardens of houses or workshops. In general, all openings giving air or light to houses and buildings for human habitations, shops, workshops, sheds, warehouses, etc., are tax- able whatever their shape, dimension, or fastening may be. The object of this tax, like the one previously described, is to make all individuals participate in the expenses of the State and local divisions in proportion to their fortunes, as mani- fested by the importance of their dwellings — an importance considered, or sufficiently expressed, by their number of windows and doors. The openings to new buildings become taxable as soon as the buildings become habitable. If at the time of the making of the tax-roll some rooms of a new house are not yet habitable, the openings of such rooms are for the time exempt. If the entire front of a room or atelier consists of windows, the number of windows to be taxed is determined by their solid divisions of either iron, stone, or wood. The tax is graduated according to the number of inhabitants and the nature and number in which the doors and windows are arranged. 1/2 MUNICIPAL TAXATION Doors and windows of manufacturing establish- ments are not taxable, except those in the dwelling part. The door and window tax is levied by reparti- tion between the departments, arrondissements, communes, and taxpayers according to the sub- joined tariff, excepting contingencies. IN FRANCS. For houses with For houses with six or more openings. in o"0 ^ ^ ■j: u ^ S 3 'r. ,: Population of cities bO te C M " . "2 = S -a V and communes. c c -a-a ,>! ■^ .T3 .; c §• 0. 0. ope opei tJC « 3 !-. .y. ary \ floor St an stori >'5 V H Fou Five > Ordin ground and fir Below 5,000 •30 •4S •90 r6o 2-50 I "60 •60 •60 5,coc to 10,000 •40 ■60 1-35 2-20 3-25 3-50 75 ■75 10,000 to 25,000 -.=50 ■Ho r!So 2-8o 4x0 7-40 •90 75 25,000 to 50,000 •60 roo 270 400 5.50 1 1 -20 I-20 75 50,000 to 100,000 •80 1-20 T,bo 5-20 7-00 i5'oo 1-50 75 Over 100,000 roo r5o;4-5o 6-40 8-50 18 -So I -So 75 In cities and communes of over 5,000 inhabit- ants the tax corresponding with the number of population applies only to the dwellings within the octroi lines ; those outside are classed as rural communes. The Councils-General apportion the contingent AT HOME AND ABROAD. 173 amount due by each department among the com- munes through the councils of arrondissement. The director of the direct taxes prepares every year a table giving (i) the number of taxable openings of each class ; (2) the product of the taxes according to the tariff; and (3) the projected apportionment. In large cities and towns it must, of course, be a source of considerable revenue. The tariff in each commune rises and falls in pro- portion to the amount fixed as the quota of the commune. Though the occupier is legally liable for this charge, it is sometimes borne by the land- lord, and it thus becomes an addition to the property tax in certain cases, quite out of propor- tion to the value of the house-property concerned, large and small openings on each storey being taxed equall)'. This latter evil in Paris has, since 1852, been dealt with, and there has been more justice in the allotment of this tax, the letting value of the house being taken into consideration, and the size and nature of the doors and windows. In Bordeaux as well as Paris exceptional tariffs are now in force. (4) The contribution des patentes is the tax upon trade. Every individual Frenchman or foreigner in France engaged in commerce, trade, industry, or a profession not embraced in the exemptions provided for by law, is obliged to take 1/4 MUNICIPAL TAXATION out a licence. The different licences for profes- sional or business purposes are divided into several categories, according to the nature of the business and the population of the city, and the tax levied in proportion to the importance and presumed profit of the trade. If an individual owns several establishments he has to pay for one of them at the highest rate of the categories in which his business is placed, but only one-half out of the rate for each of the remaining establishments. This tax comprises a fixed and a proportionate tax. The reason of this combination is evident, for were a fixed duty only to be levied on all the followers of one same class of industry, the tax would then affect unequally the rich and the poor ; whereas with the addition of a proportionate duty a proper equilibrium is established between the amount required from all the holders of licences. The fixed taxes are regulated by law according to Schedules A, B, C, and D, which modify the taxes previously levied. The taxpayer must belong to one of these four different categories ; the fixed tax is then regulated by the general tariff, and according to the population of the commune, or according to the population and the situation of the commune, by an exceptional tariff, or, finally, without regard to the population, but according to the elements of production. AT HOME AND ABROAD. 1/5 Commercial, industrial, or professional avoca- tions not specified in the tables are nevertheless subject to the licence tax, which is regulated according to similar industries. The categories into which persons liable to this tax are placed are as follows : — (a) Retail merchants and wholesale and retail merchants and artisans who employ workmen ; (b) bankers, brokers, and negociants — z>., wholesale traders, importers and exporters ; (c) manufacturers ; (d) liberal professions, viz., lawyers, physicians, etc. Schedule A in this classification is the most important and complicated of the four divisions under the licence law. Under this head are classed retail merchants and artisans who employ workmen (and who are classified entirely apart from the manufacturers in Schedule C). Taxpayers in Schedule A are divided into eight sub-classes, according to the nature and supposed lucrativeness of their business. These sub-classes are again divided into nine categories, according to the population of the commune in which the licentiate is located. Thus a merchant (Sub-class No. i) pays in Paris a fixed licence tax of 400 francs ; in Mar- seilles, 300 ; in Toulon, 240 ; and so on down to 35 francs in a commune having less than 2,000 inhabitants. 176 MUNICIPAL TAXATION A coal-dealer (Sub-class No. 5) would pay in the same cities 50, 40, 30, and 7 francs respectively, as will appear from the following table : — IN FRANCS. Class Class Class Class Class Class Class Class I. 2. 3- 4. 5. 6. 7- 8. In Paris 400 200 140 75 50 40 20 12 In communes of^ more than 100,000) 300 150 100 75 50 40 20 12 50,000 to 100,000 240 120 80 60 40 32 16 10 30,000 to 50,000 180 90 60 45 30 24 12 8 20,000 to 30,000 120 60 40 30 20 16 8 6 10,000 to 20,000 80 45 30 25 15 10 8 5 5,000 to 10,000 60 40 25 20 12 8 5 4 2,000 to 5,000 45 30 22 15 9 6 4 3 2,000 and less 35 25 18 12 7 4 3 2 All this relates to the fixed element of the licence tax, which is imposed equally upon all persons exercising their avocations under the same conditions. In establishments where the fixed tax is regu- lated according to the number of hands employed, the hands below sixteen years of age or over sixty years count only for half. The proportionate tax is levied upon the rent- able value of a dwelling-house, as well as ware- houses, stores, shops, workshops, sheds, or any other locality in connection with the exercise of a taxable profession. It is due the same if the AT HOME AND ABROAD. 1 77 dvvellin<( or building is occupied rent free. The proportionate tax from workshops and industrial establishments is levied on the tenant value in their entirety and furnished with all the materials of production. According to this law, which, with the excep- tion of gas manufacturers, is applicable almost ex- clusively to taxpayers of Table C, not only the rentable value of the building, but also the rentable value of the machinery, and all industrial appliances, such as motive power and accessories, are taxable. The proportionate tax is payable in all the communes where the warehouses, stores, etc., are situated. If a taxpayer owns more than one dwelling- house, he pays the proportionate tax only on the one where he exercises his industry and where he trades. The proportionate tax is fixed at the twentieth part of the rentable value for all taxable professions, on trades, with the exceptions stated in Table D which are somewhat numerous. Everyone paying a licence tax receives a certi- ficate free of stamp duty, which is to be produced whenever the mayor, commissary of police, or other judiciary officer asks for it. Goods sold without a licence can be seized and held at the expense of the seller until a licence is obtained. These are the direct State taxes, which form M 1/8 MUNICIPAL TAXATION the basis of the local taxation : but besides the addition for local purposes of the "centimes" to the State taxes, the municipalities have other means of relieving their citizens of their superfluous wealth. A dog tax is levied, and, independently of the duties collected at the entrance of important cities on behalf of the State, there are others called " municipal taxes," the collection of which is secured by the service of the " regie " or by that of the " octroi." P2ach commune can levy a tax on dogs of not less than one or more than ten francs a head. Dogs are divided into two classes. The highest tax is paid for dogs of luxury or sport, and the lowest for such as may be used by blind persons, shepherd or watch dogs. The tax must be paid for the entire year ; and if the owner dies during the year the unpaid proportion of the tax is a charge upon the heirs. The " octroi " is a kind of custom house on a small scale. In order to raise additional revenue for large towns, the agents of the octroi are posted at the entrances of the towns, and all persons, car- riages, and carts entering the town are stopped and duties demanded upon numerous articles, no matter where produced. The "regie" is the administra- tion which collects in the interior of towns certain special taxes. AT HOME AND ABROAD. 1/9 Each commune or city of 4,000 inhabitants or over may levy an octroi for home consumption, and goods can only be delivered after such duty has been paid ; the hours within which delivery can be made are regulated by law. Cities having an octroi may claim an authorisa- tion to add to it a part of their quota of personal and mobiliary tax, in order to be able to exempt rents below a certain amount. This is always done in Paris, where rents marked less than 500 francs are exempt, adding from yh to iih per cent, to all rents taxable above 600 to 1,000 francs. This octroi tax is particularly disagreeable, and the very sight of an octroi barrier with its difYerent implements for probing the waggons, boxes, boring casks, measuring, weighing, and testing produce subject to the tax is unpleasant. They have and exercise the right to examine all travellers on foot or mounted. Nor is this the worst feature ; by in- creasing the cost of the necessaries of life, which the articles charged usually are, they decrease the buying capacity of the workman, and consequently diminish his capacity for work. The expense of collecting this tax is necessarily great. At Amiens it is about 1 1 per cent. ; elsewhere nearly 20 per cent. At Rouen it is 17 per cent. ; but the reason of the excess here is, there are so many different modes of entering Rouen, both by land M 2 I So MUNICIPAL TAXATION and water, many more offices and officers are required. Communes may have such further special muni- cipal revenue as they think proper, as rents from markets, fairs, and slaughter-houses ; for the stands of public vehicles, for superintendence of the streets, etc. ; for communal tolls, weighing, measuring, etc. ; and fees for special services, privileges, etc. ; income from public funds or from capital invested with individuals. Every commune can hold public funds, and can also place its disposable funds with individuals by way of mortgage. We have before us a list of the special municipal taxes of Nantes, and marvel how the inhabitants are content to bear them. If they make any sort of repairs to their houses, or even petty repairs to the cornice of a house, a tax must be paid. Like- wise, if openings are made in a wall for a door or window, and again, if old doors or windows are closed up. If you have a small balcony in front of your window, or projecting steps, lanterns or hooks to exhibit goods, or even reflectors to front lights, tribute must be paid to the local Caesars. In addition to a large number of indirect taxes, such as the fiscal and protective duties, and revenue derived from stamps registration, donations or sales of property, etc. etc., the State has monopolies in the manufacture of tobacco, powder, matches, the AT HOME AND ABROAD. l8l postal and telegraphic service, coining of money and medal department. The Government also attends to business not covered by a monopoly, such as the forwarding of money and newspapers equally performed by railroads and other companies. State industries, outside of a monopoly are such as, since 1878, working of some State railways, establishments for instruction and learning, of the manufacture of objects of art, like Sevres china and Gobelin's tapestry ; of the publication of newspapers, books, etc., and also of banking and insurance operations, etc. The assessment of tlie direct taxes is entrusted to a special service composed of: (i) director- general at Paris, (2) eighty-six divisions distributed in the different departments, but under the control of the director-general. Each division is comprised of a superintendent, one inspector, and several controllers. The duty of the controllers is to collect necessary information for preparing the assessment lists. The inspector supervises the controllers. The director transmits all orders from the director-general to the inspectors and con- trollers, directs the service, regulates the work, and prepares the tax lists. The authorities who prepare the matricular lists, together with the tax commissioners, are the mayor and communal assessors, of whom there are seven, 1 82 MUNICIPAL TAXATION namely, the mayor, the adjunct or substitute, and five taxpayers on real estate, of whom two at least must reside in the communal. Besides these, there are five substitute assessors, nominated by the sous- prefect on presentation by the mayor. No less than five assessors form a quorum. The collection of the taxes is a separate service under the control of the director-general of accounts at Paris, with the following officers in each depart- ment : — Treasurer ; paymaster-general, residing in the principal city of the department ; receiver of the taxes, residing in the principal town of the arrondissement ; and collectors whose duties are to collect the taxes enumerated in the tax lists. These special officers receive aid and assistance from the authorities of the departments and communes. The direct taxes become due every month, or the twelfth part of the yearly tax. The proprietors or principal lessees of houses are bound to require their tenants or sub-tenants to produce their tax receipts a month before their moving away, else they will become themselves liable. If the tenants re- fuse to produce their receipts to the proprietor, he must immediately inform the tax-collector, and get from him an acknowledgment of the receipt of such notice, when he is released from further liability. We think we have given a sufficient review AT HOME AND ABROAD. 183 of the French system of taxation. It is graphically described in a report by the United States consul at Bordeaux as follows : — " Taxation in France is comparable to an insati- able monster, with its covetous eye upon every possible taxable thing. F'rom the poorest creature struggling for daily bread to those enjoying the luxuries of wealth, each pays his mite or portion. Nothing that the City can tax — no industry, pro- fession, trade, or act — is exempt. Every traveller indirectly pays for the privilege of seeing France. There is not a hotel at which he stops, no article of food or drink supplied him, even the very bed he sleeps upon, but which pays its tribute. The agri- cultural class bears the heaviest burden of taxation. First of all, the land pays its heavy tribute, every beast of burden, all cattle, vehicles, and implements are taxed. Nothing that is produced on the farm but is met at the city entrances by the collectors of the 'octroi.' Among the principal of the numerous causes of taxation in France is the standing army, averaging one soldier to every twenty inhabitants, maintained, armed, and paid by the Government ; the forcing of all youths over eighteen years of age to undergo from three to five years' military service ; and the compulsion of all able-bodied men under forty-five years of age to spend annually from twenty-eight days to six l84 MUNICIPAL TAXATION weeks in military drill, thus depriving the country of the services of the best producers at the very l)eriod when they are most valuable and capable." According to statistics, land in France consists of some 28,000,000 holdings, divided amongst 5,000,000 proprietors, and each one of these 28,000,000 can be sold or let at the good pleasure of the proprietor. Entail does not exist in France, and children share alike the real and personal estate of the parents. With respect to the selling or letting of pro- perty, the provisions of the French law are equally applicable to urban and rural property, and con- siderable latitude is allowed to vendors and lessors as regards the conditions they may desire to attach to sales or leases, provided always that these con- ditions do not in any way interfere with police, municipal, or State regulations, and do not contra- vene either servitudes and prescriptions, or infringe the rights and privileges of neighbours. In France, property can be sold, and is not unfrequently sold, in small lots, so as to enable persons to build houses on it. These sales may be unconditional, in which case the purchase is bound by such restrictions only as are made in the public interest. Instead of being sold in building lots, land is sometimes let for a term of years upon condition AT HOME AND ABROAD. 1 85 that houses arc built upon it ; that an annual or other periodical rent is paid by the lessee; and that at the end of the term the houses shall become the property of the landlord. With respect to the length of such leases, it is usual to calculate it on the probable income to be derived from the houses. The calculation is based on the principal that the lessee shall not only obtain an annual income, varying from 4 to 6 per cent, of the capital ex- pended, but that the money laid out on the build- ings should be redeemed. It is, therefore, very difficult to fix an average for the duration of this kind of lease, much depend- ing upon the commercial, industrial, and social conditions of a particular locality. 1 86 CHAPTER VIII. GERMANY. The German Empire affords us as an example of the absence of uniformity in the mode of assessing local taxation. Each federal state has its own system, and even some towns in the same state have different ways of augmenting- their local exchequer. The public revenues of Germany are imposed and collected partly by the Empire, partly by the separate states, and partly by the different local authorities. The Empire has entire control of the customs and excise, and it may be said that for imperial purposes no direct taxation is levied. The various states, however, impose direct taxation, and it will be found that the income principal is the most characteristic feature. This variety will, no doubt, show us the different ways and means by which German politicians hope to meet the demands necessitated by the multi- MUNICIPAL TAXATION 1 8/ farious wants of large cities and communities, by- evading at the same time apparent injustice or impartiality in the imposition of taxes. PRUSSIA. The Prussian provinces are sub-divided into " Kreises " — i.e.^ circuits or counties, and every kreise is again sub-divided into " communes," being either towns or communes of the country (Landge- mcinden). Large cities constitute kreises of their own. Only Berlin occupies an exceptional position in Prussian Monarchy. It constitutes a city, kreise, and province combined. Though it will furnish a good example as to the local taxation paid by a Prussian inhabitant, yet the high standard of its tax percentages can hardly be regarded as typical for other places ; its position as the capital of the German Empire re- quiring a number of expenses for public works and for facilities of trade and traffic which smaller places may, without injury to the interests of their occupants, dispense with. For cities and hamlets not exceeding 2,500 inhabitants in number a simplified constitution is applicable. The control of a city is under : (i) the Burgomaster (Mayor) ; (2) Magistracy (Magisterial Senate) ; (3) Board of Aldermen. The Magistracy 155 MUNICIPAL TAXATION is a body charged with the administration of the city property. The Board of Aldermen represents the burgesses and controls the administration. The Mayor directs and superintends the entire run of business and is responsible for the current adminis- tration of affairs. To defray the expenditure for local purposes, the communes are under law permitted to collect certain taxes on houses, rentals, incomes, dogs ; tolls on macadamised roads, bridges, ferries, or (which many cities do) to levy an excise, laid on articles of food (mill-ground articles, cattle, meat, etc.) entered for consumption (octroi). Municipal revenue is raised either by: (i) the surtaxes (Ausschlage) based on the rates of certain specified State direct taxes, or (2) by special sanc- tion from the State to impose certain specified taxes, direct or indirect. The former one is the one generally adopted by Prussian municipal and provincial communes, having no independent com- munal revenue for real property. The amount of these surtaxes, of course, varies in each commune, according to its means and wants. In some provinces the special sanction of the State is necessary to impose a communal surtax higher than 5 per cent, of the rate of the State tax, but in the case of the majority of provinces such sanction is only required when the communal surtax is AT HOME AND ABROAD. 1 89 higher than 50 per cent, of the State rate. In very few communes the surtax is as high as 300 and 400 per cent, of the State tax. Some few wealthy com- munes are in a position to dispense altogether with the assistance of direct taxation. The State taxes which are employed as bases for these surtaxes are : (i) on real property, (a) the land tax and the (/;) house tax ; and (2) personal, as (c?) the class-tax on personal net annual incomes under 3,000 marks (^150); and {d) classified income tax on annual net income above that amount ; and {c) the trading tax. The land tax and the surtax is levied on all productive land. The amount to be raised is distributed for collection among the different kreises ; within these it is again distributed among the individual communes and independent manors of the kreise, and by those among the rateable properties (Siegenschaften), and proportioned equally on the basis of their ascertained net annual yield to the cultivation. The net annual yield is the surplus of the average gross yield of each separate plot of land remaining after deducting farming costs. For the purpose of assessment each lot of land is classed under one or other of the following descriptive categories: (i) arable, (2) garden, (3) meadow, (4) pasture, (5) woodland, (6) water, (7) waste ; and in each category under I90 MUNICIPAL TAXATION one of eight classes denoting its net annual valua- tion. The rate of taxes collected for land is about gh per cent, from the estimated value of its yield. There are different modes of assessing the several State taxes. As regards the land tax, the Secretary of the Treasury stands at the head of the land-appraising authorities of the whole State. Immediately subordinate to him are the com- missioners-general, whose duty is to direct and to supervise the execution of the required land-ap- praising work, and to see that equitable results be secured within the borders of the State. A central commission is formed consisting of four land experts, and of several members from each province, one-half of the provincial members being chosen by the Upper House, and one-half by the House of Representatives. This central commission has to fix the tariff of classification and to settle the final results of assessment. A commission, appointed for each province and supported by technical experts, directs and controls the execu- tion of the necessary assessments and appraise- ments. Each province has also a board presided over by the provincial commissioners and a com- mission of assessment assisted by an assessing board, to superintend and execute the work of assessment, and to fix or revise the tariff of ap- praisement within their district, and to perform all AT HOME AND ABROAD. I9I Other duties connected with the office. The costs of assessing and collecting the land tax is fixed at from 3 to 4 per cent, from the amount actually collected and received. The house tax and surtax is assessed on all permanent buildings, inclusive of the grounds upon which erected, and of the yards and gardens belonging thereto ; providing that the area of the gardens does not exceed 2 roods 20 perches. Gardens of a larger size are subject to the land tax. It is, properly speaking, a separate category of the land tax, and the individual assessments are similarly recorded in the land registers. For the purpose of assessment, all taxable houses and buildings are placed in one of two categories. The first in which the assessment is 4 per cent, of the occupancy value, includes all buildings de- signed especially for dwelling houses, or to satisfy personal requirements, also theatres, private schools, etc. The second category, taxed at the rate of 2 per cent, of the annual occupancy value, embraces all buildings exclusively or principally used for trading or industrial purposes. These annual values, in case of towns and villages with a large proportion of letting houses, are assessed on the basis of ascertained average letting values. In districts where no such basis is obtainable, rules are laid down to guide the assessors in fixing the 192 MUNICIPAL TAXATION gross annual value of the occupancy ; these rules appear to take into consideration the material structure of the buildings and the circumstances of the locality. An increase of the building tax, in consequence of additional improvements, only comes into force two whole years after the altera- tions have been made. The classification of houses and buildings liable to this tax, is as follows : — ASSESSMENT TARIFF FOR HOUSE TAX. J Annual rate of lax. _>< Annual rate of tax. / J3 s| « u > At tp.c. At 2 p.c. U At 4 p.c. At 2 p.c. Marks. Mks Pf. Mks. Pf. Marks. Mks. Pf. Mks Pf. I 12 •40 •20 23 675 27 •00 13 •00 2 l8 •60 •30 24 750 30 •00 15 •00 3 24 •80 •40 25 825 !)}> ■00 16 ■00 4 36 I •20 •60 26 900 36 •00 18 •00 5 45 I •80 •90 27 975 39 •00 19 •00 6 60 2 •40 I •20 28 1,050 42 •00 21 ■00 7 75 3 •00 I •50 29 1,125 45 ■00 22 ■00 8 90 3 •60 I •80 30 1,200 48 •00 24 •00 9 105 4 ■20 2 •10 31 i>35o 54 •00 27 •00 lO 120 4 •80 2 •40 32 1,500 bo •00 30 •00 II 135 5 •40 2 70 33 1,650 66 •00 33 •00 12 150 6 ■00 3 •00 34 1,800 72 •00 36 •00 13 180 7 •20 3 •60 35 1.950 78 00 39 •03 H 210 8 •40 4 •20 36 2,100 84 •00 42 •00 IS 240 9 ■60 4 •80 37 2,250 90 •00 45 •00 i6 270 10 •80 5 •40 38 2,400 96 •00 48 •DO 17 300 12 •06 6 •00 39 2,550 102 •DO 51 •00 i8 364 14 •40 7 •20 40 2.700 108 •CO 54 •00 19 420 i6 •80 8 •40 i 41 2,850 114 •00 57 ■00 20 480 19 •20 9 •60 42 3,000 120 •00 60 00 21 22 540 600 21 24 •60 •CO 10 12 ■80 •00, 43 132 •GO 66 00 Up to 6,000 marks each further class rises by 300 marks, and after that by 600 marks. AT HOME AND ABROAD. I93 The rental value of buildings is appraised by a commission chosen by the building owners of the district at a meeting held for that purpose. The commissioners perform their duties under the direction of the chief magistrates of the respective districts. The cost of assessing and collecting the class taxes is fixed at from 3 to 4 per cent, from the amount actually collected. The class tax (Classensteuer) and surtax are levied off all persons having their own household, and all persons supporting themselves by their own means, independent of the head of the family or household they may belong to. Only to phys- ical persons as such, or to the individual, this class tax attaches.; it has no bearing upon firms, cor- porations, societies, etc. It will be noticed that as this class income tax is payable by persons having a net income from ^21 a year and under ;^I50 a year, a class of taxpayers is reached who are entirely relieved from the payment of income tax in the united kingdom. The class taxpayers are divided into twelve distinct classes, formed on the basis of the annual income, those included in each class being liable to a different rate from those in another class. Incomes under £4$ a year are exempt from State taxation, although liable to communal taxation on the basis of a fictitious State tax equal to is. 6d. N 194 MUNICIPAL TAXATION per annum. Incomes from ^^45 to ^,150 are entitled to relief from one-fourth the annual State tax. The classification and the normal annual tax of each class are as follows : — CLASS TAX. Annual net incomes ranging between 420 marks and 3,000 marks are divided into 12 classes, thus : Class. Income. Annual tax. Marks. Marks. Marks. I. Ab Dve 420 to and inclusive of 660 3 II. , 660 900 6 III. , 900 ,, ,, 1,050 9 IV. , 1,050 „ ,, 1,200 12 V. , 1,200 ,, ,, 1,350 18 VI. , 1,350 1,500 24 VIL , 1,500 ,, ,, 1,650 30 VIII. , 1,650 ,, ,, 1,800 36 IX. , 1,800 ,, ,, 2,100 42 X. , 2,100 ,, ,, 2,400 48 XI. , 2,400 ,, ,, 2,700 60 xn. : , 2,700 ,, ,, 3,000 72 The classified (graded) income-taxes and surtax are levied on all persons having an annual income over and above ;^I50 a year. They are classified for assessment into forty classes. Even foreigners staying in Prussia more than one year must pay the tax upon their net income, although the sources of such income may be elsewhere and in a different country. Such strangers are liable to the com- munal or municipal taxes after the third month of residence. The classification, with the annual tax assess- ment upon each class, is as follows ; — AT HOME AND ABROAD. 195 < O :5 O 'O s § I— t ^ o n n n rt X M \D ri CO •=i- ri •* n 8 c '^\0 00 i~t LTlOO M \0 CO t-H ri CO •^ ri I) CO m c s l_l HH HI CJ N r) ro ro ^ u-i\0 J--. fi TtvO CO ON <— ' < " C) < N 2 •3Aisnpui .0000000 K-OOOOOOO -if o o o o o o__ o^ J2 ^ o" f-r -to'co" o' <5 Ln\0 r^co C^ O fi OOOOQOOOOOOOO 0000000000000 00000000000^ 00^ -f co" -f 6" 6 o o o d d d d d •^-O O -^OO fico --f-o^ nco •-I ►-" ri r) ro fO "+ -^ ij-i\o vD t-^ r^ 00000000000000000000 S -* OOOOOOQOOOOOOOOQOOO OOOOOOOOQOOOOOOOOOO 0000^0^0^ o^ o^ q^ o__ o^ o^ o_^ o_^ o__ o^ o^ o^ o^ •^ o" rr -^vo'co" o"" -^co" -t d d d d d d d d d vrwo t^03 O^ O fl -l-O O 'l-OO rico -fOO ri „ „ _ ►^ ri ri CO to -n)- -^ u-iso o t^ KiOoo\0'^NOvONOO-*ON '^vO 00 \0 -^ ri O O •gO^O PI rj-vooo -> unco ci \0 CO O rv. Tj- u-ivo r^oo vo rt n „ „ « _, f 1 ri ci CO CO Tt u-i uivO t^cjo O^ O M •3Aisnpui mOOOOOOOOOOOOOOOOOOOO ^00000000000000000000 |5 \0 n CO -* O rj^ -+O^co_^ 0_^ '1;'^ '"1 ^„ ''l 0„ "1; O. O^ O 5; CO -t- --F i-nvcT rCco c?> o"" ff -^vO On " LOCO n vD ri CO ■^ „ HH « HH -H f 1 n ri CO CO -^ •* 00000000000000000000 '•OOOOOOOOOOOOOOOQOOOO -ifOOOOOOOOOOOOOOOOOOQO nOO rtco -^O O "fO CO 0_^ -*;co <~>,0^ fl^ 0_^ "t q_ O^ S CO CO -^ -^ i-n\0~ rCco C> o' rf -^O (> ■-'^ loco rPvo" r? », ^ ^ „ -H CI M n CO CO -^ I-' C4 CO -+ "lO t^OO On O i-i M CO ■* wiO t^CO On O 196 MUNICIPAL TAXATION And for every additional 60,000 marks an addi- tional tax of 1,800 marks. In assessing the com- munal supplements, only half of the official salaries of Government officials is taken into account for the class and income tax ; accordingly, an official salary of 1,500 marks would be assessed on the basis of the State tax on an income of 750 marks, i.e. on 6 marks instead of 24 marks. The pay of persons in the standing army is exempt from State taxation, and was until recently equally exempt from local taxation ; but it has now been made liable to the latter taxation. The municipal authorities are required to keep a correct record of persons liable to the income tax. The assessment is made by a district assessing board presided over by the Chief Magistrate of the district. The board is constituted by a certain number of persons, of whom one-third are appointed by the district or municipal authorities, and two-thirds by the taxpayers of the various income classes. The classification and assessing are done by the board upon information and evidence obtained and examination had. The parties assessed may appeal from the decisions of the board to an administra- tion tribunal organised for that purpose, and whose jurisdiction is final. In absence of authentic proof to establish the AT HOME AN]) ABROAD. I97 amount of annual income, circumstantial and hy- pothetical evidence is admitted. The style of dwelling and living is taken as a basis upon which to calculate the income, and the annual expendi- ture of a person is accepted as sufficient proof of a corresponding income. The Prussian tax and fiscal authorities under- stand it well to bring reticent, evasive, and un- willing taxpayers to terms, amicably if it can be, peremptorily if it must be. The costs of assessing and collecting the classified income taxes are fixed at three per cent, on the amount actually received. The trading tax and surtax are assessed in a most complicated manner. The trades and occu- pations for the purposes of taxation are divided into classes and each class into sections, and the tax for each class and section is fixed by law. Companies and firms are subject to the tax the same as individuals ; but apart from what the individual may think in I^'ussia, the professions of physician, lawyers, actors, painters, etc., are not regarded as pursuits for gain, and consequently not subject to the tax. We think it will be unnecessary to give the classification of the different trades and occupa- tions. Every party affected participates in its distribution. Wholesale dealers, merchants, and the smaller grades of industrials, by their rcpre- 198 MUNICIPAL TAXATION sentatives elected for that purpose, co-operate with the authorities and have their say. The conflicting mterests and opinions of the various occupations are thereby sought to be reconciled. The practice is attended with equitable results, inasmuch as the several trades are best qualified to judge as to the proper distribution of the burden. The costs of assessing and collecting the trade and occupation taxes are fixed at 4 per cent, on the amount actually received. Before entering on a business, the person must give notice to the local authority so as to be placed in the proper class and section. Such is a sketch of the general nature of the State taxation of Prussia, which forms the basis of the municipal taxation generally. But, as has been already stated, the local taxation system of Berlin is not an example of that adopted in other towns, but shows how various the systems may be even in the same country. Unlike any other city in Prussia, Berlin, as stated before, has the rights and duties of a province, and from its multiple character the tasks imposed upon its local administrations are con- siderable, and exceptional legislation has been enacted for it. There is no " Octroi " collected in Berlin, although certain communes are permitted to levy an excise laid on articles of food entered AT HOME AND ABROAD. 1 99 for consumption. The city derives its income for municipal purposes from — 1. A house tax paid by the owners of the houses, generally at the rate of 2|- per cent, of the amount of rentals received. 2. A rental tax, which is paid by the tenants at the rate of about 6f per cent, of the amount of the rental paid. 3. A municipal income tax collected mostly at the rate of lOO per cent, of the amount of the class or State income tax. Reference has already been made to the different classifications of the incomes liable to the State and this municipal income tax. 4. A dog-tax of nine shillings each dog per year. The number of the canine breed within Berlin may be ascertained when this tax generally returns about iJ" 15,000 a year. No mention is made here of the other strictly speaking non-municipal taxes which a Prussian has to bear, such as the church tax and school tax, although the communes have to provide for the organisation of schools, subject to the control of the State. Neither has been included what Berlin house-owners have to pay to have their houses connected with the system of sewerage, and for gas and water consumed within their houses. For primary schools no special school-money is col- lected in Berlin. 200 MUNICIPAL TAXATION In Frankfort-on-Main the levy upon the class and income tax is ninety per cent, added to the State classified income and class tax combined. The assessment on house rent is different there, being 4 per cent, annually from the annual rent stipulated. The tax on income submitted by the State is 3 per cent., and inasmuch as the city has added ninety marks to every hundred marks of State tax, it result.s that the percentage levied on t'ne income of persons residing in the city as a municipal tax is 5*9 per cent. A water rate of 4 per cent, on the rental value is also charged for the water supply. The local taxes are payable either in monthly or quarterly instalments, which is a source of great convenience to the ratepayers. Like ours, none of the taxes constitute a charge on the property, being merely a personal liability of the individual, and yet the losses in collection seem to be of little importance. This appears to be accounted for by the fact that arrears are not permitted to run up. If the tax is not paid within three days after demand a levy is made. In Prussia, and practically throughout Germany generally, house property is in\ariably held in freehold tenure, and the s^-stem of letting land on long building leases is practically unknown. Property is usually sold in small lots, so as to AT HOME AND' ABROAD, 20I enable persons to build houses thereon ; but in each case a fixed price in one sum must be given. Yearly rents or other periodical payments are not admissible. The only restriction to which the purchaser would be subject who was desirous of building on such lots in country as well as in town districts would be : — (i) Legal restrictions, in the case of buildings for commercial or industrial purposes and the like, imposed for the purpose of preventing any prejudice to the convenience, safety, or health of the public ; (2) police restrictions, imposed with the object of securing proper access to the dwelling-house, and its proper sanitary con- dition, and further to provide for the arrangements of the structure being kept strictly within the limits of any plan which may have been fixed or approved by the municipal authority ; (3) private restrictions arising out of any such covenant or agreement which may have been entered into between vendor and purchaser as to the description of building to be erected, or the use to be made of the ground sold. WURTEMBERG. Here, as in the other kingdoms, the local taxes are levied by adding so much per cent, to the State direct tax according to the requirements of the local authorities. 202 MUNICIPAL TAXATION These requirements vary enormously ; in some communes scarcely any taxes are necessary, owing to their possessing large communal properties, but in most cases the additions to the State tax for local purposes far exceed the amount of the tax for national purposes. In Stuttgart, the capital, the city authorities levy percentages added to the State : — {a) Land tax, which, for national purposes, is 3'9 per cent, on the yearly average net yield of the land, as assessed by official appraisers, making with the local percentage of 5*8 per cent, an average tax of 97 per cent, on the " cadastrial value." (/;') House tax, which is estimated by consider- ing 3 per cent, of the full value as the net revenue upon which a tax of 3'9 per cent, is levied, the local percentage, being in this case 5 "8 per cent., also making a similar average tax of 97 per cent, on the cadastrial value of buildings. [c) Trade tax, the mode of assessment of which is most complicated. The tax includes every kind of industrial and commercial enterprise, except farming. Merchants and tradesmen have to state the amount of capital invested in their business, and the number of assistants. An estimate is then made of the annual revenue from the capital invested and the value of the merchant's personal activity, which value is considered as the merchant's AT HOME AND ABROAD. 203 personal earnings, the sum total forming the amount on which the tax is levied. Any capital less than ;^35 is not subject to the tax, and of personal earnings only an amount exceeding ^170 is subject to the full tax, while of minor amounts only the following proportions are counted : — Up to 850 marks one-tenth. From 850 to 1,700 marks two-tenths. „ 1,700 to 2,550 „ four-tenths. „ 2,550 to 3,400 „ eight-tenths. {d) On the revenue from investments in stocks, bonds, etc., and on all kinds of salaries exceeding £17 per annum, a tax of 4'8 per cent, is levied for State purposes, and for municipal purposes i per cent, of the revenue assessed for Government taxation. {e) A residence tax, due from every self- dependent person residing in Stuttgart. Male persons pay 4s. per annum ; females 2s. per annum. (/) Taxes on the consumption of beer, meat, and gas. SAXONV. The local taxation of the kingdom of Saxony, urban and rural, is very diversified. The principal direct imposts are : — 204 MUNICIPAL TAXATION A house tax levied on the basis of the " taxa- tion units" of the State, "grundstener " ; a land tax assessed on local measurements of real estate ; a property tax ; a poll tax on households ; taxes on rental, and on the capital value of land and houses ; a local income tax. These are applied in various forms and combinations. The towns and rural communes of Saxony are, as a rule, owners of the real and funded property ; gasworks, waterworks, and other sources of income from which local expenditure is partly defrayed to the extent, possibly, of half of the whole or more, one locality being thereby altogether exempt from municipal taxation. Again, the relative amount raised by the house and building tax is not con- stant, but varies from place to place according to the nature of the local taxation, which follows very dissimilar patterns of assessment. Let us take the capital, Dresden, as an example of a moderately taxed Saxon town. Chief among the civic resources is the rent tax, which (for Saxony) is peculiar to Dresden. It occurs also in Berlin, as we have seen. It is, as its name implies, assessed on the rental, and is paid by the occupier. The rate for houses is 12 per cent., and i per cent, for church expenditure, making in all 13 per cent, on the rental, or, as we should say, 2s. yd. in the pound. For shops, ware- AT HOME AND ABROAD. 205 houses, etc., half rates are charged ; for gardens, etc., one-fifth rate. DwelUngs rented at £S '^^- oi' under are exempt ; from that level up to £7 los. half rates only are charged. Next in importance is the Dresden tax on the capital value of building and land. The rental is appraised on moderate terms, one-third is then deducted, and the remainder taken at twenty years' purchase. The sum resulting is the capital value, which is charged with a rate of ;^6 per 10,000. This impost appears to fall more lightly on owners of detached houses than on houses on flats. According to Mr. Mill, a rate on house rent is one of the fairest of taxes. " The amount paid in rent," he observes, " is the best criterion of a man's means, and it bears, on the whole, a pretty constant proportion to general expenditure." With their practical experience of this tax, the Germans have come to an opinion removed, toio ccelo, from thi.s. They observe that a person with an income of about ^30 has to disburse a full quarter of his revenue, or 25 per cent., on his rent ; that, as revenue rises, the proportion expended on rent rapidly diminishes, so as to be only 3 per cent, on incomes of more than ;^ 1,500 per annum, and on the larger incomes a mere vanishing fraction of their amount. These being the facts observed in Germany (in Berlin the contrasts observed are 206 MUNICIPAL TAXATION even more notable still), it is natural that there should be a prevalent conviction of the extreme unfairness of the house tax. These taxes are supplemented by a tax on burgesses and residents, who pay four shillings as the maximum ; a dog tax of los., a tax of 12s. on caged nightingales, and an octroi duty on such articles of food as flour, beer, game, poultry, fish, meat, and tolls on beasts. The octroi duties, it has been calculated, only lay a charge of about 2s. lod. per head on the inhabitants of Dresden. A percentage is also added to the State income tax, the incidence of which is significant. The Saxon income tax is levied on incomes in excess of ;^I5 a year. The incomes are divided into classes, and the rates of taxation are progressive, and increase in proportion to the amount of the income. Thus, on incomes from 300 to 400 marks {£iS to i^20), the State tax is a half-mark, or sixpence. On incomes ^125 to ^^140 the State tax would be £2 8s., and so until on the higher incomes the State tax would amount to fully 4^ per cent. It is important to observe also that " income " here includes all value received. Thus, in the fiscal language of Saxony, the income of a servant consists of wages, together with the ap- praised worth in money of his or her lodging, food, livery, or other emoluments. AT HOME AND ABROAD. 207 Class. Income. Tax. Marks. £ Marks. £ s. d. I 300 — 400 ... 15 - 20 i ... 6 2 400 — 500 ... 20 — 25 I ... I 3 500 — 600 ... 25 — 30 2 ... 2 4 600 — 700 .. 30 — 35 3 .. 3 5 700 — ■ 800 ... 35 — 40 4 .. 4 6 800 — 900 ... 40 — 45 6 .. 6 7 950 — 1,100 ... 47 — 55 8 .. 8 8 1,100 — 1,250 ... 55 — 62 II .. II 14 2,500 — 2,800 ... 125 — 140 48 .. 2 8 19 4,800 — 5,400 ... 240 — 270 136 .. 6 16 20 5,400 — 6,300 ... 270 — 310 162 .. 8 2 21 6,300 — 7,200 ... 310 — 360 189 •■ 9 9 For all the succeeding classes the tax is 3 per cent, on the minimum amount of the class ; up to 12,000 marks (£600) the rise is 1,200 marks; for higher classes the groups are larger. At the top of the scale the progression is by advances of 5,000 marks ; thus all incomes from 60,000 to 65,000 marks would pay 3 per cent, on the minimum, i.e. on 60,000 := 1,800 marks, or £go. The low limit of income (iJ"i5) at which the Saxon tax begins is worthy attention, remembering that our income tax does not touch incomes below ;^i5o, and that up to ^^400 there is abatement for i^i20. The persons with incomes between ^^"15 and £iSO form, it appears, in Saxony, about 90 per cent, of all the tax-payers, and about 40 per cent, of the entire tax is extracted from them. 208 MUNICIPAL TAXATION With US all this class would be exempted. If we were to compare the local taxation of Dresden with that of our own cities, we would find that upon premises of equal valuation in each place the Saxon would have only to pay a sum equivalent to one-third the local taxation on a citizen of, say Dublin. The pattern of fiscal moderation set by Dresden is by no means followed in the provincial towns of Saxony, which, as a rule, have the capital, building, and land tax combined, with some species of progressive income tax, which is very general. In Leipzig the town income tax commences with I id. for an income of ^15 to i^20, and attains the maximum rate of 3 per cent, with incomes of £y,SOO. The capital valuation for the ground and building tax there is computed by taking fifteen times the net income ; the percentage is lower than in Dresden, making for ^^150 rental value £4 los. against jCy 4s. (for owners) in the capital. The State has transferred the levying of its direct taxes to the various towns, and allows them for the ex- pense of collection 3 per cent, of the amount collected. In Chemnitz this three per cent, does not cover the cost of collection, though the cost of collecting the municipal taxes is not proportionally so great. The reasons for this are, (i) the amount collected is larger ; and (2) the municipal taxes are levied by citizens who are not paid for their services. AT HOME AND ABROAD. 20g The municipal taxes in Chemnitz are assessed in this way. The General Commission of Assessors apportion out the work to smaller commissions from among the citizens of the town — one for hosiery manufacturers, one for curtain weavers, and so on, so that all of the same business are taxed by the same assessors. A member of the Town Council presides over each sub-committee. Anyone refus- ing to act or neglecting to attend a meeting with- out sufficient reason is fined from 1 5 to 300 marks ; but if a member or any of his relatives is being assessed, he is obliged to temporarily absent him- self. The committee has power to put into a different class those who have a large family of children, or who support poor relatives, or who have incurable sickness, or those who have met with some great misfortune. By this arrangement the authorities of Chemnitz are enabled to effect an equitable levy of the town taxes with the least possible cost upon the citizens. BAVARIA. In the kingdom of Bavaria many of the municipal authorities own forest land and let shooting and fishing. About 970,000 acres of the forest land of Bavaria belong to communes, and return a con- siderable amount in aid of ihe taxation necessitated by local requirements. O 2IO MUNICIPAL TAXATION The larger proportion of the communes levy- no direct taxation, but augment their revenue from property by the imposition of tolls on roads and bridges, and some local duties on articles of con- sumption. A very small number of communes — mostly of what we would call villages — have had often to assess their taxation at over 500 per cent, of the direct State taxes. The direct communal taxation appears to be higher in the Palatinate than in the seven provinces east of the Rhine. The power is vested in the various communal unions — i.e. divisions, districts, and communes — of levying local taxes, forming percentages of all the State direct taxes, as explained as regards Prussia generally. There is no limit to the legal maximum of the percentage, which is, of course, regulated by the necessities of the local authority. The State direct taxes forming the basis for these local percentages are: (i) the land tax, (2) house tax, (3) trades tax, (4) income tax on capital, as bonds, shares, etc., and (5) income tax on salaries, pensions, professions, etc. ; but the first two are the principal sources of revenue. The Bavarian land tax, in \\'hich is included the tax on forests, is not levied either upon the value oi the land in a given year or on the true annual production of the land, but is calculated from its AT HOME AND ABROAD. 211 superficial area and its natural productive power, as shown by its average production. To calculate the average production, an average agricultural working power is presupposed, and also that every three years the land lies fallow for a season. It is also only the principal products which are taken into account in striking the average of production, by products being left out of account. The average yearly production is then measured out by the old unit of area called " Tagewerk " (equal o"3407 hectares), and divided into classes according to the quality. For arable land the average yearly production of one-eighth of a " Scheffel " corn (equal 277947 litres) constitutes one class, each class differing from the next by that amount. In other sorts of culture, the prin- ciple that each class differs from the next by the value of one-eighth Scheffel also holds good, and one-eighth Scheffel corn is taken as equal to one gulden, or 175 marks. The land tax, therefore, is assessed on the basis of the combination of the area of the land expressed in " Tagewerks," and the quality thereof which remains unchanged as long as the land is cultivated. The standard of production taken as unity is one- eighth Scheffel corn, or an average yearly return of I mark 71 pfennigs. Each finance law for each biennial period O 2 212 MUNICIPAL TAXATION determines the number of pfennigs or fractions of a pfennig to be levied from each one-eighth Schefifel for the land tax. For many years past 8'4 pfen- nigs have been regularly levied on each standard of unity — as land tax. Consequently, when once the amount the land can yield is determined as above, the percentage equivalent of the tax is 8:4^_ioo = |45 = 4-9 pel- cent. The real income derived from the land may, of course, be very different, and, consequently, the percentage thereon which the tax composes may also be different. The Bavarian house tax is neither calculated upon the current market value of the house nor upon the annual rent actually produced from it. The standard by which the tax is determined is the rent-producing power of the house, as shown in the case of houses under lease by the actual rent, and in the case of houses not under lease by a revised estimate calculated by comparison with other similar houses paying rent. When, however, in the case of non-rented houses, no proper means of comparison and estimate exist, as is frequently the case in out-of-the-way country districts, the tax is calculated at the rate of 5 marks (5s.) per " are " of the space occupied by the house and courtyard space. This is called the " areal " tax- The minimum tax pa}'ablc, however, whether the rent or "areal" tax, is in either case 15s. The AT HOME AND ABROAD. 213 maximum " areal " tax is 125s., but for rent tax there is no maximum. Once the yearly rent- producing power is fixed in marks for the purpose of the house tax, the finance law for each biennial finance period determines how many pfennigs and fractions of a pfennig per mark must be levied. For many years past the amount of the house tax has been yS^ pfennigs per mark of the rent- producing power, and this, therefore, amounts to a house tax of 3'85 per cent. It is obviotts that in many cases the tax must amount to a different rate from this on the actual rent paid, and, there- fore, to that extent varies from the above-mentioned percentage. But, whenever possible, the rent- producing power is calculated as near as may be to the actual rent ; and further, in communes where rent tax is paid, a new determination or assess- ment of the tax is made every ten years, on the application either of the State authorities or of the taxpayers. FREE PORTS. The systems of taxation in Hamburg are pecu- liar as compared with those of the other common- wealths of the German Empire, on account of the relations which subsist between Hamburg as a free port and the Imperial Government. In Hamburg, State and local taxes are jointly taken from the people. No separate account is kept of the State 214 MUNICIPAL TAXATION and local taxes ; the joint receipts form a general fund, and the State and municipal Treasury are the same. The principal sources of revenue to the Imperial Government are import duties and the taxes upon articles of consumption ; Hamburg being a free port and exempt from direct taxes to the Imperial Treasury; still it appears the standard of expenditure is higher and the cost of living dearer than in Berlin, and far exceeds the prices paid for the same commodities in South German cities. An inhabitant of Hamburg has to pay to the local authority: — ( i ) A ground tax. The assessment is one-half per cent, on the estimated value of the property. On small buildings and lodgings the assessment is diminished by one quarter. The estimated value of the houses let for lodgings is ascertained by converting the rent into an interest upon the capital. The valuation is obtained at a rate of 4tV per cent, for smaller dwellings, and at 61 per cent, for larger ones. The taxes on a house paying i,ooo marks rent would be iiff per cent, of the rent. The tax of one-half per cent, on the valuation is considered a heavy incumbrance on property in Hamburg. Hence house-rent is high. (2) An income tax. This tax is levied upon every person having an income of £2^ and over. It is progressive, and varies from 12s. per cent, to AT HOME AND ABROAD. 215 3| per cent, income. The head of a family has a right to demand a reduction of his taxes, which is generally liberally granted. (3) The victual tax, which is a duty demanded at the entrance of the city upon wholesale imports of meats and other consumables; (4) Stamp duties; (5) Declaration custom duty ; (6) Port dues ; (7) Tolls on roads and bridges : (8) Inheritance tax. The taxes on inheritances are as follows : — Two and one-half per cent, for relations of the second and third degree ; adopted children, 5 per cent. ; relations of fourth degree, 7| per cent. ; rela- tions of more distant degree, or non-relatives, 10 per cent. The following inheritances are exempt from such taxation : From parents to children, from husband to wife, to charitable institutions, estates of less than 4,500 marks, legacies of 360 marks and less as long as one person is not left more than 360 marks, also amount left to executors as long as it does not exceed the sum of 4,500 marks. (9) Dog tax, of los. ; and (10) a brand tax upon all measures. Under the methods of taxation, the wealthy pay the bulk of direct taxes, but here, as elsewhere, this burden is shifted through trade and interchange until it eventually reaches the shoulders of the poor. The burden of taxation in Hamburg is to be 2l6 MUNICIPAL TAXATION found in the qround tax. On account of this tax house rent is comparatively high — in fact, higher by lO per cent, than in any other city in Germany. The consequence is that every artisan and trades- man demands a higher price for his articles and produce. The expense of collecting the several taxes is light. For the collection of the ground and income tax few officers are required, as the citizens do the greater part of the work themselves. Printed blanks are sent to each taxpayer, with a notice that taxes are due, and must be paid at a particular time at the respective offices. They are required to appear in person at the offices, and render their assessments and pay the taxes. Non-compliance with the order is followed by a seizure of a sufficient amount of the property to cover fines, taxes, and cost of collection. The actual cost of collection is difficult to ascertain, as the officers have other official duties to perform, and the different methods are not kept separate; but it may be safely admitted that the greater part of the expense is the collection of the indirect ta.xes. The local taxation of Bremen, one of the other free ports, is so dissimilar that we are forced to give it, especially as it shows how the water and lighting tax is divided between owner and occupier. The authorities derive their income from an income AT HOME AND ABROAD. 21/ tax, often reaching fully 4 per cent, of the income ; a poor tax, being about i per cent, on the income, and collected with the income tax; tax on land of 5| per cent, of net receipts therefrom ; tax on buildings of 2t per mille on assessed value; water tax payable by (i) owners of buildings at J per mille on assessed value, (2) owners of land (ground) I per cent, on net revenue therefrom, (3) lessee at I per cent, on amount of rent paid by him ; light- ing tax payable by (i) owners of buildings at loV per mille of assessed value, (2) owners of land (ground) at 2f per cent, on net revenue, (3) lessee at 5 per cent, on amount of rent paid ; tax on business transactions of firms ; retail liquor tax, octroi on articles of food and necessaries of life, death duties, stamp duties ; auction tax of | per cent, of net receipts ; taxes on clubs, societies, billiards, public halls, pleasure vehicles, horses, dogs, nightingales, insurance policies, turnpike and canal tolls. Of the cost of collecting all these various taxes, that of the octroi is the most expensive, requiring as many officials as the customs. It is the most oppressive tax on the poor people, making, as it does, the necessaries of life more costly. There is, however, the consolation that articles of luxury are highly taxed, which is commendable. i8 CHAPTER IX. AUSTRIA. Here, as in other Continental countries, the im- perial taxes furnish the principal basis of all local taxation, which is levied in the form of an addition to the State tax as the "centimes additionnels" are levied in France for the requirements of the depart- ment and communes. There are in Austria various units of local self- government — the province, the county (Bezirk), the schools district, and the " Gemeinde," or commune or township. Each of these defrays its wants prin- cipally by charging some percentage on the State taxes, varying in different provinces from 25 to 37 per cent, on the State tax. In Bohemia, for instance, the provincial tax is 36 per cent. ; in Lower Austria 30 per cent. In most provinces this additional percentage is laid equally upon the several imperial direct taxes, but in Moravia and Lower Austria the percentage on income and earn- ings taxes is a little lower than upon the taxes on real property. The State taxes upon which this additional MUNICIPAL TAXATION. 219 percentage is levied for local purposes are the taxes on real property and the taxes on personal property. The taxes on real property are divided into taxes on proceeds or profits of realty (agricultural lands, forests, vineyards, etc.), and taxes on the proceeds or profits of buildings (rents). The taxes on personal property are divided into taxes on manufactories, on industrial, mercantile, and pro- fessional occupations (erwerbsteuer licence), and taxes on income derived either from such industrial, mercantile, or professional occupations, or from invested capital. A manufacturer, for instance, if he owns the building in which he carries on business, pays taxes first on the rental value of the building ; secondly, a high licence tax for the privi- lege of carrying on his business ; and, thirdly, an income tax on the net profits derived from his business. The taxes on real property are (i) land tax and (2) house tax. I. The land tax. Every tax district has its own permanent record of the dimensions, character, and average producing capacity of all parcels of land within the district. This permanent record (Kataster) has existed for a long series of years, and the tax is levied upon the basis of the estimated producing capacity as shown in this 220 MUNICIPAL TAXATION record. From time to time new estimates are made, and the owners of realty have the right to protest if they think the estimate is too high. The question is decided by the finance officers of the district, and in certain cases an appeal lies to the Minister of Finance ; but no appeal operates as a stay of proceedings in the collection of the tax. According to the Kataster records the taxable area of land in Austria amounted to 32^ million acres, classified as (a) agricultural lands, (I?) meadows, (c) gardens, (d) vineyards, (e) pasture, {/) alps, (o-) forests, (/i) lakes, swamps, and ponds ; and the quantity of each and its average net producing capacity is duly recorded. Under the law of 7th June, 1881, the total amount of taxes to be imposed upon the producing capacity of taxable lands was fixed at a certain sum per annum for a period of 15 years, and the percentage of such average net produce to be paid by the owners was also duly fixed. The local additional percentage varies periodically according to the records of the municipality. In case of default in payment of this tax at the time fixed by law, the party making default must pay interest at the rate of i| kreutzers per day for each hundred florins due. If the tax is not paid within four weeks after it becomes payable, execution issues for the amount ot taxes and AT HOME AND ABROAD. 221 interest against the personal property of the dehnquent. If the personal property levied upon is in- sufficient to pay the tax, an execution issues against realty. II. The house tax. The theory of this tax is that it is imposed upon the profits of the capital invested in the buildings. It is considered a fair and safe form of taxation by the Austrian Govern- ment, for the reason that it is quite impossible to conceal the real amount of capital invested in the buildings, and, following the views of Adam Smith, the authorities advocate the justice of this tax as a combination of a tax upon the realty and upon the improvements situate thereon. The tax upon buildings is divided into two classes, viz. : — (/r) a tax upon the net amount of rent received, or upon the rental value, called the " house-rent tax " (hauszinssteuer), and {b) the tax upon dwelling- houses graduated according to the number of dwelling-rooms, the houses being divided into a certain number of classes, called the " house-class tax " (hausclassensteuer). (A) The house-rent tax is not by any means uniform throughout the empire, but is only levied in certain cities and localities particularly men- tioned in the law, and wherever the house-rent tax is not levied, the house-class tax is imposed. The 222 MUNICIPAL TAXATION most noticeable characteristic of this law is its total want of uniformity. In order to arrive at the net amount of rents received for the purpose of assessing the house-rent tax, a deduction of from 15 per cent, to 30 per cent, is made from the gross amount to cover the necessary repairs, etc. Upon the balance the per- centages for the State and municipality are im- posed. These two percentages are frequently so large that they receive considerable attention in dealings between landlords and tenants. For instance, in Vienna, the total amount of the house- rent tax. State and local, is 45 per cent, of the net amount of rents received. (B) Since 1882 the house-class tax is levfed in proportion to the number of inhabited or habitable dwelling-rooms, without reference to the cost or value of the building, and without regard to its style of architecture or purpose. Palace and peasant's hut come under the same rule and classification. However, the tax is not a certain amount for each room, but sixteen taxable classes are established, for the lowest of which, containing one room, a certain tax is payable, which is graduated and increases according to the higher classification in which the building is placed. The highest classification is a building containing from 36 to 40 dwelling-rooms. AT HOME AND ABROAD. 223 As before stated, under this classification all rooms which are or can be inhabited are taxed ; barns, stables, and out-houses are exempt. Ante- rooms, halls, assembly-rooms, and writing-rooms also fall within the classification, but kitchens, cellars, and garrets (the latter only if not occupied), are excluded. It matters not whether the rooms are furnished or not, or whether windows or doors are broken ; they are all taxable if they can be made fit for dwelling without rebuilding. Certain workshops are also taxable. The workshops of tailors, shoe- makers, weavers, and cabinet-makers, etc., sale- rooms of merchants, offices of druggists and surgeons, fall within this classification, because, as a commentator on this law remarks, all these buildings require but little change to make them habitable. The dwelling-rooms, bed-rooms, offices and storage-rooms of factories, also come within this provision. If a house is destroyed by water or fire, the house-class tax is abated for the year within which the damage took place. In the following cases, both the house-rent tax and the house-class tax arc totally abated for the term of 1 2 years : — (i) If a new building is erected upon ground 224 MUNICIPAL TAXATION not theretofore built upon ; (2) if a building is torn down to the ground and rebuilt ; (3) if a building is enlarged by erecting a new storey or storeys, the new storeys are exempt from taxation for the period aforesaid ; (4) if separate storeys or parts of buildings are torn down and rebuilt, the new part is exempt in the same manner. The term of 12 years begins to run the day of occupation of the building. It must, however, not be supposed that these tax-free buildings are entirely free from taxes because the law just quoted so provides. Special enactments have brought these buildings within the reach of the tax-collector. In Vienna, for instance, tax-free buildings pay the State and municipality 20 per cent., while buildings not tax-free pay 45 per cent, of the rental value as house-rent tax. III. The tariff of the licence tax on proceeds of personal property and business contains 4 principal classes, under which all pursuits and employments subject to this tax are classified, viz. : — ■ (i) Factories ; (2) commercial ventures, with a separate classification for wholesale business; (3) arts and industries (including retail merchants and dealers and pedlars) ; (4) emplo}'ment, (a) for instruction, teaching, etc., (d) brokers and com- mission agents, attorneys, etc., (c) carriers. The tax is payable semi-annually in advance. AT HOME AND ABROAD. 22$ The estimate of the amount of earnings is based upon the average earnings of the three previous years. In assessing this tax the tax officers find Httle difficulty to ascertain the net earnings of factories and wholesale merchants, because they gain the required information from the balance- sheet to be furnished by these establishments, under the provisions of the Income Tax Law and commercial regulations. In order to gain definite data as to the proper amount of tax due from the other taxable classes, the law instructs the tax officers to take into consideration the amount of capital invested, the nature of the business, its location, the number of workmen and clerks em- ployed, the machinery and apparatus used, etc. The amount of house-rent paid by a business man is to be considered in arriving at his net earnings. In judging from all these facts and circumstances, the tax officers decide to which particular class and sub-division of a class the taxpayer belongs. The law fixes the number of classes and sub-classes of taxpayers subject to this licence tax, and also provides for the amount of tax to be paid by each class and sub-division thereof, in the several cities and localities ; but it omits entirely to fix the precise conditions {i.e., the precise amount of net earnings) under which a taxpayer is to be enrolled in any one particular class or sub-class, but leaves 226 MUNICIPAL TAXATION the decision upon this point to the tax officers of the several districts, and requires them to be guided in their decision by the declarations to be made by the taxpayer and by the estimate of the local authorities. There are certain exemptions from payment of the licence tax, and they include — (a) the agricul- tural industry so far as it is confined to the raising of raw products ; (d) all workmen who work for wages or by the job ; {c) all common day-labourers ; (d) all Government officers ; (e) all authors and artists ; (/) all teachers in towns having less than 4,000 souls ; (^) all mines (except smelting works) ; (/i) dealers in tobacco, stamps, and lottery tickets ; (z) fisheries in coast districts ; (j) savings banks ; {k) physicians, surgeons and midwives. IV. An income tax has existed in Austria since the beginning of the nineteenth century. It was repealed in 1829 and re-enacted in 1849. This tax is divided into three classes : — Fzrsi Class. — Under the first class the following income is taxed : {a) the income derived from all those trades and occupations which are subject to a licence tax ; {b) the income of mining and smelting works ; ic) the profits made by the tenants of agricultural lands, of tolls, and of consumption-tax districts. Second Class. — Income from services rendered AT HOME AND ABROAD. 22/ or labour performed in occupations not subject to a licence tax ; (d) annual income or dividends paid by life-insurance or other companies. Servants are only taxed under this class if their total income exceed 630 florins per annum. Thh'd Class. — Under this class are embraced : Interest from loans, interest from invested capital ; income from savings banks and life-insurance companies. Benevolent and mutual assistance corporations and stipends are also included in thi^ class. In addition to the percentage added to the foregoing State direct tax, the Municipality of Vienna derive a share from the consumption tax collected on the line of the city. The tax is collected partly on behalf of the State and partly on behalf of the municipality. The tariff as es- tablished is high. Almost all provisions, beverages, eatables and commodities, alive and dead, are subjected to this tax. Every vehicle drawn by horses, and every horse that crosses the line into the city, pays an octroi tax of four kreutzers for each horse. All other so-called "Closed Cities" have a similar tariff", though the rates are not so high as those of Vienna. The taxpayer of Vienna has also to support the local Chamber of Commerce, which acts as the P 2 228 MUNICIPAL TAXATION advisory board to the Minister of Commerce, and has the commercial and industrial interests of the city in charge. Certain general taxes are levied for its support and maintenance. Unquestionably the Austrian tax system favours the capitalist and the great real estate owner, and the heaviest tax burden is borne by the merchant and business man of limited means. The capitalist may invest his millions in tax- free securities, and thus escape taxation almost entirely. If he dwells in a palace within a closed city, he pays a house-rent tax on its rental value ; if his estates are situated in the open country, he pays the house-class tax, and in this case it is to be noted that the wealthy owner pays no higher rate of taxation on a marble edifice containing, say, forty rooms, than the owner of a common brick tenement house in the neighbouring village with the same number of rooms, because, as already stated, the house-class tax is levied according to the number of inhabited or habitable rooms, without reference to the character or cost of the building. The most expensive stables and out- buildings, though they cost thousands upon thousands, are free of tax the same as the straw- thatched barn of the peasant. A millionaire, therefore, may enjoy the possession of a grand establishment in the countr\- — a castle containing AT HOME AND ABROAD. 229 forty rooms — b)' paying the comparatively small tax of 220 florins per annum, exactly the same amount which the landlord of the village inn has to pay if he happens to be in the use and occupa- tion of the same number of habitable rooms. But it should be remembered that the landlord of the village inn pays a large licence tax and an income tax besides, both of which the man in the castle escapes because he invested his millions in tax-free securities, and is not compelled to carry on business to support himself and family. If a large park surrounds the castle, that, too, in most cases, is free of tax, because it is unproductive, while the garden patch in the rear of the village inn certainly produces something, and is therefore subject to the usual levy for that class of property. It is quite superfluous to carry the comparison any further ; it is evident that, as to the two cases mentioned, there is little uniformity in the system of taxation under consideration. But the tax- payer who carries the heaviest burden, is the small merchant and business man generally, who carries on business in one of the "closed cities" like Vienna. First of all he pays indirectly a house-rent tax of 45 percent, of the actual rental value of his dwelling, because the owner of the tenement building takes good care to place his rent high enough, so that 230 MUNICIPAL TAXATION he can afford to pay the tax of 45 per cent, to the Government. And it is a notorious fact, that, especially in Vienna, the rents of the small flats fit for dwellings of the middle classes are un- reasonably high. Next he pays his licence tax, to be fixed by the tax officers at a rate decided by them ; then he pays a tax on his net income, amounting to from 10 to 20 per cent., again as the tax officers may decide; then the Chamber of Commerce comes in for its share of taxes, and after this follow the indirect taxes, principally the consumption tax, which raises the price of his meat, his bread, his candles, his beer, his wine — in fact, everything he puts upon his table or into his kitchen, even the oats and hay on which he feeds his horse (if his business requires him to keep horses), down to the straw for their bedding, is raised in price by the consumption tariff line drawn around these so-called " closed cities." The United States Consul General at Vienna thus expresses himself as to the social condition of the citizens of that city consequent upon the heavy burden and unequal incidence of the taxation : " Vienna is to-day one of the most expensive cities on the Continent of Europe. Many necessaries of life, in the shape of good healthy food, are so dear that they are placed AT HOME AND ABROAD. 23 1 beyond the reach of the man of moderate means. A mechanic, or a clerk, or a public functionary, with a salary of barely r,ooo florins per annum, rarely sees a roast on his table. It is self- evident that the high prices of rents and provisions have been the principal factors in shaping the habits and mode of life of the people. Among the middle and lower classes there is little home life. The dwellings are so small and pinched that family gatherings and invitations to friends are impracticable, and the coffee-house and cheap restaurants and public gardens are resorted to for social intercourse as well as for the evening meal, and thousands manage to make a supper out of a glass of beer and a slice of bread, because more than one substantial meal at their own houses is quite beyond their means. These, and many other unavoidable deductions, may be drawn from that dry line of figures giving the statistics of taxation in the Empire of Austria." 232 CHAPTER X. SWITZERLAND, Switzerland presents the rare picture of a State which, possessing only a population of some- thing over two and a half millions, and divided in parts by high mountain chains, yet contains members of three great civilised nations. They are not chained together by a despotic power, but united by the firm conviction that this relation is more to their advantage than would be a union with their great parent nations. Each of the twenty-five cantons being sovereign in so far as its sovereignty is not limited by the federal constitution, regulates its own internal affairs according to its own judgment, and accordingly every variety of condition is met with. Notwith- standing, the principle is everywhere recognised that the nation shall govern itself according to its own judgment and requirements. All officials, even the judges, are chosen from among the people, and this only for a fixed period. MUNICIPAL TAXATION. 233 There are, therefore, no official castes, no high salaries, no pensions ; and yet peace and order rule here in a higher degree than in any other country. Every able-bodied citizen, property owner, and resident in the several cantons, is subject to pay- nfient of two distinct classes of taxes, viz. : — (i) Those imposed by the cantons. (2) Those imposed by the respective townships composing them. Both are collected by the town authorities, but at different times. The cantonal taxes are turned over to the treasurers of the cantons, and the towns arc generally allowed to retain i per cent, as payment of their collection. The Federal Government derives its revenue largely from custom duties and postal telegraph service — and the residue from a few special taxes, as citizenship, railways, on banks of issue, regis- tration of trade marks, and of commercial houses, gunpowder manufactures, and military tax. The military tax is payable by every Swiss of the age of military service, from twenty to forty-four years old, living in the territory or out of the territory of the confederation, and who does not personally perform military service. This special tax consists of a personal tax of six francs, and of an additional tax on property 234 MUNICIPAL TAXATION and income, the amount exacted from any one taxpayer not to exceed 3,000 francs per annum. In many of the cantons a tax is levied on property without any distinction being made between real estate and personalty, and in those cantons in which a separate tax is levied on real property, lands and buildings appear to be subject to the same assessment. The systems of assessment differ also in the various communes or townships of each of the twenty-five cantons. As the cantonal authorities execute many works properly belonging to the municipal or city authorities, a description of the sources of their revenue is necessary to fully understand the Swiss system of local taxation. We will take the systems adopted in Berne and Zurich respectively. The law regulating the taxation of the Canton of Berne recognises the following taxes as direct : (i) property tax ; (a) ground tax ; (d) capital tax. There is a division of real estate into several classes, viz. — ground property (without forest) ; forests and improvements. Then there is another division as to kind of cultivation : (i) gardens, orchards, meadows, arable lands ; (2) pasture grounds ; (3) vineyards. There is also a sub-division of these three classes as to value, viz. : — Forests are valued accord- AT HOME AND ABROAD. 235 ing to (i) yield of wood ; (2) market price of wood ; (3) climatological conditions resulting from topo- graphy. Buildings are classed and valued according to the construction of the walls and roofing, material, stone, brick, wood, or framework, filled with broken stones or butts ; and for what purpose used — dwelling, barn, granary, store, or manufacture. The tax is two francs for each thousand francs of assessed value. Of this 1.70 francs are for general administration, and 30 centimes for pauper fund. The assessed value is reached by deducting debts for which the property is made liable by mortgage, lien, or other legal process. But this provision excludes debts, though secured as above, which are due to the confederation, or to creditors not within the jurisdiction of the canton. The exemptions to the property tax are : — (i) Buildings and ground the property of the State used for public purposes ; (2) churches, parsonages, school-houses, hospitals, asylums, roads, rivers, and lakes ; (3) grounds incapable of cultiva- tion or pasturage ; (4) establishments under federal administration ; (5) railway stations and appur- tenances ; (6) real estate under 100 francs value. The Capital tax covers personal property, stocks, rents, annuities, etc. If the creditor of 236 MUNICIPAL TAXATION stocks, bonds, or rents for which property is bound, resides out of the jurisdiction of the canton, the owner of the property must pay the tax ; but it is considered as being paid on behalf of the creditor, and he is authorised to retain the amount so paid from the interest or rent so paid by him. The assessment of the tax on stocks, etc., is arrived at by fixing a value of twenty-five-fold the amount of annual interest or rent or dividend, and of this each 1,000 francs is taxed the same per cent, as the real estate, or 2 francs per 1,0 do. The ground property pays tax in the district where it is located and listed, personating where the owner is domiciled or claims domicile. The Income tax. The persons subject are : — (i) All persons established in the canton, in- cluding Swiss citizens of other cantons and foreigners ; (2) temporary residents beyond six months ; (3) all companies, corporations, etc., h'censed to do business. The tax is divided into three classes : — (i) Income from professional pursuits, trades, or employments which carr}' with them salary, wages, fees or emoluments, and income from industry, commerce, and manufacture. This class pays three per cent. (2) Income from annuities, pensions, etc. This class pays four per cent. AT HOME AND ABROAD. 237 (3) Incomes from interests, stocks, bonds, shares, deposits (not subject to the tax on property in the canton). This class pays five per cent. From the first class is exempt the sum of 600 francs, and 100 francs from the second and third classes. This exemption can be made only once, and cannot be claimed by a party who may be engaged in two distinct pursuits or businesses, as deductable from each one ; and although husband and wife may be engaged in separate business and keep separate accounts, the allowance is only made for one. In addition, however, to the 600 francs allowed in the first class, there is 10 per cent, additional permitted for expense in producing income — that is, the net income is sought to be taxed. Persons whose official positions entitle them to receive certain privileges and perquisites of value — • such as parsons, teachers, policemen, and employes in certain establishments who may be furnished with firewood, free lodgings, and small tracts of ground, must add the same to their gross income according to a certain stated scale of value. The indirect cantonal taxes are : — (i) Tax on inheritance, legacies, and donations ; (2) on markets, traffic, hawking, etc. These can be taxed only so far as space, stalls, and extra expense of police, fire department, and sanitary 238 MUNICIPAI- TAXxVTION purposes may be involved. (3) On public-houses and retailers of spirits. These are divided into (a) houses that lodge, board, and sell spirits ; {d) houses that sell food and spirits, and do not lodge. The first pay according to a list of eleven classes ranging from 300 to 2,coo francs per annum. The second embraces eight classes, and runs from 300 to 1,600 francs. Ten per cent, of the amount realised from this tax is given to the commune or township vv'here the houses are located for school and paupers. (4) On the manufacture of brandy and spirits for trade. (5) For cantonal fire in- surance. This is the most unique responsibility which municipalities have undertaken. Switzer- land is so far the only Continental country which has undertaken the municipal insurance of property against fire, lighting, explosion, or damage by water in extinguishing a conflagration. The insurance tax is obligatory for four-fifths of the taxable value, and is conducted under the restrictions and regulations usually pertaining to fire insurance, and precludes any other insurance upon the property. In case of fire the indemnity is made in propor- tion of the sum insured to valuation. Single houses isolated, without a fireplace, and under 500 francs value, are exempt from this law ; and powder-mills, laboratories for fireworks, depositories AT liOiME AND ABROAD. 239 of powder or dynamite, and chemical manufactures, are excluded. Additional premiums for insurance are imposed in the following cases : — {a) Houses with wood or partly wood roofs 20 centimes per 1,000 francs ; (/;) when the wall in whole or part consists of material not fire-proof, from 10 to 20 centimes per 1,000 francs, according to its distance from other buildings ; (c) where there is special risk from character of business carried on. The fire-insurance tax varies according to the loss that may be sufifered in a year. It is generally about one and a half francs, with small additional assessments for some small townships. The collection of the insurance tax is, as in other cases, intrusted by the canton to the several communes, which retain a small percentage (4 cen- times per 1,000 francs) for expenses of collection. For systematising the operation of the law the canton is divided into six appraisement districts, in each of which a commission consisting of three members is appointed by the cantonal council for a three years' term. This commission has for its duty the appraisal of the values at which all the buildings in the district are to be insured. The control of the entire system is vested in the direction of the police for the canton. 240 MUNICIPAL TAXATION (6) Stamp tax. All unstamped instruments have no validity in law ; (7) State Church tax. All Protestant Swiss citizens who have not exercised the legal right to withdraw from the State Church are subject to a tax on a certain scale on their incomes and property ; (8) miscellaneous taxes or licences. There are a variety of other miscellaneous taxes or licences imposed by cantonal law, such as the right to hunt and fish, on travellers, hospitals conducted for profits, etc. Such are the taxes imposed by the Canton of Berne. Those imposed by the City or Commune of Berne are the ground and capital taxes. These taxes on real and personal property are the same as in the canton, viz., 2 francs per 1,000; classifi- cation ; and other features similar also to cantonal. The City income tax is 3, 4, and 5 francs per cent., regulated as the cantonal. Water tax. Four francs for each room the house contains. The net profit annually to the city is about 15,160 francs. Gas. One-half franc on the 1,000 of the house valuation. Schools. Higher classes annually 60 francs, and lower classes 4 francs. Dogs are charged for at 10 francs annually. Burial tax. The Municipal authorities of Berne are also the burial board, and in return for certain AT HOME AND ABROAD. 24I Stipulated fees supply graves, hearse, coaches, horses, and bury the dead. Taxes are also levied iov perinis de scjour issued to temporary residents and foreigners. Receipts are also had from spaces and stalls in the markets, from the use of the abattoir and its stable, and from the weighing of commodities. A citizenship can be purchased in the Com- mune of Berne as well as in the canton and confederation. It is somewhat strange that the practice which prevails, in giving in property for cantonal taxation, of deducting all indebtedness secured by mortgage where the creditors reside in the canton — (to deny the same having been decided by the courts to be double taxation, and in contravention of a pro- vision of the federal constitution prohibiting double taxation) — has not been applied to the city or communal taxes. It is thought that as far as it is now applied, there is much fraud practised, and that fictitious mortgages are created for the purpose of evading just taxes. By permitting encumbrances in the beginning honestly made to continue after maturity, when the debtor is able to pay, secures their indefinite continuance at less cost than would follow from the additional tax which would result from the liquidation of the encumbrance. The system of direct taxation in the Canton of Q 242 MUNICIPAL TAXyVTION Zurich is the most democratic and levelHng to be met with. It is essentially progressive. It eases the burden for the poor and the labour- ing classes, and places the greater weight upon the shoulders of those who are best able to bear it, and that, too, in proportion to their ability. The system, indeed, gives evidence of careful study and wise thought. While it cannot be said that the law actually hinders the acquisition of great fortunes or the diversion of wealth into the hands of a few, it yet inculcates the lesson that an increase in wealth brings with it increased duties and responsibilities towards the Government, which pro- tects the individual in the possession of that wealth. As an example of this progressive levy, the following may be given :— Property tax. Of the property of individual taxpayers the following portions are assessed, viz. : — Francs. Five-tenths per i,ooo on the first ... ... 20,000 Six-tenths ,, „ ,, next ... ... 30,000 Seven-tenths ,, ,, ,, ••• ••• 50,000 Eight-tenths „ „ ,, ••• ••• 100,000 Nine-tenths ,, ,, „ ,, ••• ••• 200,000 Ten-tenths ,, „ ,, on all above 200,000 hicomc tax. Of the taxable income of the individual, the following portions are assessed, viz. : — • AT HOME AND ABROAD. 243 Two-tenths on the first ... ... 1,500 francs. Four-tenths on the next ... ... 1,500 „ Six-tenths ,, „ ... ... 3,000 „ Eight-tenths „ „ ... ... 4,000 ,, Ten-tenths on all above ... ... 4,000 „ Every hundred francs of income assessment pays two francs tax for every franc per thousand levied on property assessments. CitizensJiip tax. The tax payable by all citi- zens entitled to vote amounts to one-third of the sum levied per thousand on property assessment. The like progression is observed in the Zurich Cantonal inheritance tax, increasing not alone as the degrees in blood become more remote, but also as the amount of the bequest or inheritance is of greater value. An admirable consolidation of tax is observed by the authorities of the City of Zurich. For city purposes a direct tax is levied on property, on households, and on men who have passed their twentieth year. The town regulations of Zurich to a great extent harmonise in their general tenor with the cantonal law, already given, pertaining to the levy and collection of direct taxes. A few dis- tinctive features and details yet exist. The town taxes are levied on propert)', house- hold, and man, on the basis of so many francs per <.) 2 244 MUNICIPAL TAXATION thousand on property, so many francs for every household, and so many francs for every man who has passed his twentieth year. A minor source of income are the receipts from the indirect taxes, viz., the various office fees, fees at fairs and markets, for use of slaughter-house, baths, fire police, etc. etc. Toward the expenditure for the care of paupers of the township, all citizens of the same residing in the canton, cither within or without the limits of the home township, are required to contribute by taxation. For all other town charges the following persons are taxable, viz. : — (a) all citizens residing within the township or sojourning longer than three months in other towns of the canton (and not liable to taxation at the place of their sojourn) and settlers. From the taxable property is to be deducted that portion which under the provisions of {d) is subjected to taxation in other townships ; (/;, Owners of land within the township limits who reside outside of the township, ie., so far as such land has a value of at least i,000 francs; (f) an owner or partner in any industry carried on in the township, but resident outside of the township, for apro rata portion of its property ; {ci) corporations, stock companies, and endowments domiciled within the township, for that property upon which they, AT HOME AND ABROAD. 245 as such, arc taxable by the canton ; (r) stock com- panies, for the full value of their landed property lying within the township. Lands for public revenues, as well as those portions of the township lands the yield of which is applied to the revenues, arc taxable for all town- ship expenditures. The canton pays proportional damages to townships the roads of which have been materially injured by reason of hauling of wood from the cantonal forests or the carr^-ing on of the cantonal mines. Citizens of townships which are subdivided into several church or school districts are only taxable in the church or school district in which they reside. However, nobody is compelled to pay a tax specially imposed for the individual support of any religious society to which he does not belong. If the system of Swiss local taxation is more democratic than ours, their laws and customs re- garding the occupancy of land are also sufficiently up to date. Our notions of degrees of estate in land are not only absent from the Swiss law, but are almost in- comprehensible to the Swiss themselves. Absolute ownership in the occupier is the only condition known to them, and they possess no idea of such tenures as exist in the United Kingdom, 246 MUNICIPAL TAXATION viz., leases of 99 years, copyhold, estate in tail, and so forth. Farm leases are a separate matter. These are, in general, originally made for short periods, and not unfrequently renewed from year to year. Leases of dwelling-houses are usually granted from year to year, or for a short term of years ; but leases for long periods, such as 50 or 99 years, are not to be found in Switzerland, Property may be sold in small or large lots, and the purchaser acquires full rights over it, to build upon it or not, as he chooses. There can be no reservation of rent from it, or of other annual or periodical payments. If the purchase-money be not paid in full at the time of sale, a mortgage is thereby created in favour of the vendor, the annual interest upon which is charged, not upon the land, but upon the capital. In case of the purchaser's failure to pay the full capital or the interest thereon, the vendor is not entitled to resume possession of the land, but must recover the money in the same way as an ordinary debt. It would be contrary to the constitution in many cantons, and notably in Berne, to subject land to periodical and irredeemable pa}'ments, as savouring too much of feudalism. 247 CHAPTER XI. BELGIUM, NETHERLANDS, DENMARK. Belgium is neither a centralised country like France, and (to a certain extent) like the United Kingdom, nor a confederation like the United States and Switzerland. The provinces and town- ships (communes) enjoy a real autonomy, the rule as stated in the constitution of the kingdom being that provincial affairs are to be settled by the Pro- vincial Assembly, and local affairs by the Com- munal Council (both being elected bodies) ; but, of course, a veto is vested in the central Government on matters which might be considered contrary to the interest of the State. As a consequence, taxes are established and levied, not only by the State, but by the provinces and communes also, the only condition being that the creation of any local tax is subject to the approval of the Government. Taxes of all kinds are levied in some localities. Of course, they are not the same everywhere, and it would be impos- sible to give here, even by approximation, an idea of 248 MUNICIPAL TAXATION the innumerable objects some of these taxes touch. As a rule, howexer, the majority of the provinces, and especially communes, find it easier to add a few additional centimes to every franc of the State taxes. The State taxes, which generally form the basis of these additional centimes, are (i) the per- sonal taxes, and (2) the tax on licences. The State personal taxes of Belgium are based and levied on (i) the rental value of the property occupied ; (2) the number of windows and doors ; (3) the value of the furniture ; (4) the number of servants ; and (5) the number of horses. The State rental tax is a tax of 5 per cent, on the gross annual rental of all houses and buildings, calculated on the average annual rental received during the preceding ten years. Government or local officials occupying premises by virtue of their offices are exempt from the tax. The tax on windows and doors has been already explained when dealing with France. Here, how- ever, it varies with the storeys on which the window or door may be constructed. The State tax on furniture is i per cent, on the value of the furniture. It includes all things in the house for personal or domestic use, but clothing and implements used in trade and for personal adornment are exempt. The State tax on servants varies A\ith the AT HUME AND AliROAD. 249 number of the servants, the nature of their duties, and sex. A supplementary tax of 10 francs is charged should a male servant have to wear a livery. The State tax on horses also varies according to the use made of the horse and the profession exercised by the owner or keeper. However, horses exclusively employed in agriculture, fac- tories, and by -shopkeepers, are exempt from taxation. The State licence tax is levied on all those exercising a profession or trade, with certain excep- tions, as ecclesiastics and members of the learned professions, etc For the establishment of this licence tax there are two tariffs, called " A " and " B." The first, " A," imposes the same licence for all the communes, and the second, " B," on the contrary, varies the tax according to the import- ance of the commune. Tariff " A," applicable to all communes, comprises seventeen classes, and the tax varies according to the classification of the profession or trade, the highest being 401 francs, and the lowest 170 francs. For the application of tariff " B," the law divides the communes into six grades, according to the population, and then dis- tributes the professions and trades amongst four- teen classes, according to the importance they occupy in commerce and industry. Thus, a pro- 250 MUNICIPAL TAXATION fcssion of the first class pays a tax variable, according as it is exercised in a commune of the first, second, etc., or sixth grade. A licence tax for foreign commercial travellers is 20 francs a year. Space will only permit an example of the actual local taxation of the capital of Belgium. In Brussels the municipal taxes include (i) an addi- tion of 95 per cent, to the State personal tax. (2) An addition of 15 per cent, to the State licence tax. (3) Tax on buildings temporarily exempted from the Government real estate tax ; buildings constructed or reconstructed after 1871 are not liable to the Government real estate tax until the second year of their occupation. This slight exemption, however, does not apply to the city, and it collects a municipal tax of 15 per cent, on the net rental. {4) Tax on drinking and tobacco traffic. Dealers in liquors and tobacco are divided into several classes, and taxed according to the amount of annual sales effected. (5) A city tax of 7 per cent, on the revenue from real estate. (6) A carriage tax of 50 francs for a two-horse carriage, and 30 francs for a one-horse vehicle. Any number of vehicles of the same class may be kept on payment of the tax for the first. (7) Dog tax, except on those belonging to blind persons. (8) A tax of 250 francs on every person exercising AT 1 10. ME AND ABROAD. 2$ I the profession of a stock or exchange broker or agent, and 1 5 francs on tlieir clerks, (9) A tax of 25 francs on brokers of merchandise, and 10 francs on their clerks. (10) A tax on constructions or reconstructions. The city is divided into ten classes for the assessment of this tax. That for the first class is i franc per cubic metre for the first five metres of the height, 50 centimes from the height of five to ten metres, and 25 centimes above ten metres. The tax of each of the remaining nine classes is reduced one-tenth. The out-houses, stables, etc., pay one-fourth of the tax. This tax, however, is doubled if the street is opened at the city's expense, and it is one-half more if the street is widened for a length of thirty-five metres at the cost of the city. In the laying-out of new streets in Antwerp, the owners of the property fronting on such streets are required to bear all the expenses, each in proportion to the number of running metres along the front of his property. The amount due per metre is found in dividing the cost of the work by double the length of the street, thus covering both sides. For the expense of sewers 12 francs per running metre is collected from the proprietors of improved and unimproved property. The pay- ment of these taxes for sewers and pavements is required but once and not yearl}', even not again when repairs become necessary and are executed. 252 MUNICIPAL TAXATION To all these samples of local taxation in Brussels, must, of course, be added the tolls received for space at the markets, and the use of the public slaughter-houses. The additional centimes to the State taxes are collected by the State tax-collectors at a cost of 2 per cent, on the sum collected. The other local taxes are collected by the local collectors appointed by the local authorities, and receive, as a rule, a fixed salary. Although in some instances the rate of taxation in Belgium may seem high, yet it is levied upon assessments made so low that the amount of tax paid is comparatively small. There exists no distinction in the system of tenure between urban and suburban dwellings in Belgium, as both are governed by the same rules and regulations. Houses are regarded as private property, which the owners let for a term to be determined by the parties interested. Leases which exceed nine years must be transcribed in the public registers, of which anyone may obtain ex- tracts. Houses are, as a rule, however, freehold property. Leaseholds exist only to a very limited extent, and are tending generally to disappear. Of late years companies have been formed in the country for the construction of working men's dwellings, the tenant having the faculty of becom- ing the proprietor of the house which he inhabits AT HOME AND A15R0AD. 253 by paying annually a sum as rent, comprising the interest and sinking fund of the capital representing the value of the erround and the cost of construction. NETHERLANDS. As in the case of Belgium, so in Holland the pro- vincial municipal revenues are raised chiefly by additional centimes being added to the State direct taxes, called in the vernacular of the country " de heffing van ohcentem op's Ryks directe belastingen." The State taxes, which are principally availed of for this purpose, are : (i) The land tax, (2) the personal tax, and (3) the licence tax. The land tax is levied on all lands, whether cultivated or not, and on all improved and unim- proved real estate. For the purpose of assessing the tax, the land is classified in accordance with its value, quality, and producing capacity ; and on city, town, and other property the tax is payable in accordance with the rent value of the premises. All lands which by draining and diking, etc., are first rendered cultivable, are exempt from this tax for a term of ten years. Likewise improvements on formerly vacant city and town property renders the same exempt for eight years. Property belonging to the State, municipality, or recognised ecclesiastical bodies, is also exempt. 254 MUNICIPAI. TAXATION The personal tax, as we have seen in Belgium, has various subdivisions. This denomination stands for a tax which is levied on the rent value of all premises, on doors and windows, on hearths and fireplaces, on the furniture — or rather value thereof — on the number of servants employed, and on horses owned and used in business. This tax is paid by the inhabitants of the house, whether owners, tenants, or lodgers. Exemptions from the payment of this tax, or taxes, are provided for by different laws, the application of which ex- tends to and relieves the great mass of the wage- earning population and most all other persons whose yearly income falls below, say, about £l20. The licence tax is levied upon persons engaged in different trades and occupations. They are grouped into classes, of which there are a large number, and in accordance with one or another of which each person is assessed, or is made to pay for his licence. The charge as to many kinds of business is very low, amounting only to about a half-sovereign per annum ; but in certain cases it runs up to as much as ^8o. It should be stated that licences are required by each member of a firm, or, in other words, one licence decs not entitle any • firm to carry on any business if it is composed of two or more partners. AT HOME AND ABROAD. 255 Joint-stock companies and corporations pay to the State for their business 2 per cent, on their yearly net incomes. The professional classes, fishermen, seamen, journeymen, tradesmen, and servants are exempt, as also weavers when assisted in trade by their wives or children ; and recently the exemption was extended to widows who con- tinue the pursuit of their late husband's former and certain occupations, so long as they employ only one workman. Some localities derive a part of their income from taxes on dogs, on public entertainments, and all of them from a licence duty established a few years ago on the retail spirit trade. Besides, some localities make a source of income by working a gas factory for their own account, or by granting concessions to individuals for running the same, or a water-works within the municipality, payment being made in a share of the profits. On the same terms there has been granted in Amsterdam a concession for working tramways. In Amsterdam and some other localities a tax is levied, called street money, that is to say, a contribution from the houses for the maintenance of the pavement, the sewers, etc. ; but, after all, this is nothing but an indirect tax, for which the law or local adminis- tration fixes a maximum, thus rendering a direct increase of this tax, as local taxation, impossible. 256 MUNICIPAL TAXATION Duties arc also levied for the use of establishments destined to particular services, as port duties, sluice, bridge, and ferry tolls, markets fees, etc. Next to England the Netherlands is the only- country where the system of free trade has found an earnest and complete application. The tariff of import duties is purely a fiscal one, and rates are very low, and a great many articles are absolutely free. Local excises, or the French system of octroi, have been abolished in Holland, as well as the Government excises on most of the necessities of life. This action on the part of the authorities has been a step in the right direction, alleviating the burden laid by taxation on the working portion of the population. In the Netherlands it may be assumed as a general rule that property in land or houses is held by the proprietor as a freehold, limited owner- ship being hardly known there, as the system of letting or hiring land or building leases finds no favour in that country. DENMARK. As all the towns in Denmark are guided by similar principles in raising local ta.xes to meet their expenditure, we will confine ourselves to the course pursued in the capital, Copenhagen. The sources AT HOME AND ABROAD. 257 of local taxation are not very complicated, being confined to (i) a local income tax, (2) tax on real estate, and (3) a paving tax. In 1861 power was given for the first time to municipalities throughout the kingdom to levy an income tax, being restricted, however, to a maxi- mum rate of 3 per cent. The tax at present levied is 2 per cent, on the ratepayer's income. Incomes below ^^"25 are exempt, and a graduated abatement is allowed on incomes up to £7S, when the liability to the full tax occurs. Office expenses may be deducted to reduce incomes derived from trade sources, and each rate- payer is also allowed to deduct from this income such amount as has been paid by him in the pre- ceding year for taxes to the State or to the municipality, the expenses of repairs on his real estate, and the interest of any mortgage debt he may have thereon. The city of Copenhagen is divided into twenty- three districts, for each of which one tax-collector or more is or are appointed, who, at the close of each year, furnish the tax office with a list of the inhabitants, with accompanying information as to their social and pecuniary positions. The collectors are allowed 2 per cent, on the amount collected. The real estate tax is divided into two classes : R 258 MUNICIPAL TAXATION ( i) the " general [ground " tax ; and (2) the " arcal tax." The first is levied upon all ground, whether within or without the city walls, or built upon or not. Several years ago a measurement survey was made under the following procedure : all ground situated within the distance of 20 ells from the street lines, and which was designated "street ground," was taken in full in the survey admeasurement, whilst the re- maining ground, designated " inner ground," was only assessed at one-sixth its real value. The ground thus found liable to taxation was valued and rated at fixed rates of 16 ore and 2"66 kroner per square ell, according to its situation. By multiplying such scales of taxes on the rateable area of ground, the tax value was obtained, and for each propor- tional amount of 160 kroner of such taxed value, the ground v/as rated for one portion of ground tax. To remedy the inequalities of this system of levying the tax, it was enacted that, when the ground was built upon, the value of the building should also be taken into account, so that every 10,000 kroner of the building's insurance should be rated at one portion additional. This rating only applied to buildings within the city walls ; but as the building of dwelling- houses, with the rapid growth of population, was carried on to a very great extent outside the walls, the tax was fixed thereon as follows : The unbuilt- AT HOME AND ABROAD. 259 upon ground was divided into three classes, and valued at 1,200, 2,400, and 10,000 kroner per barrel (56,000 square feet), according to the purposes for which they were used, with its valuation for business purposes. To this, again, a change was made in 1861, which, on the whole, made a radical alteration in the tax conditions of the city. This law united all the tax, fixing the same at 15 '66 kroner and i8"66 kroner for ground without the city walls. By this law the ground-tax has become a fixed one, and can only be increased by the levying of a greater number of portions on newly erected dwellings. In cases where buildings may be deprived of some of the cor- poration's benefits, such as lighting, etc., a propor- tionate reduction in the tax is conceded. The "areal" tax is levied upon all buildings within the city. It was rearranged, and, as with the ground tax, is now fixed at a constant rate of 13^ ore per square ell frontage, and at 9 ore per square ell on the sides and back part of the building. From it small dwellings, under 64 square ells, are exempt. It is a presumption of the law that ta.xes on buildings fall upon the lessees of the house; or, supposing the owner docs himself inhabit the house, fall on him as occupier thereof, not as owner ; in other words, the building tax is a tax R 2 260 MUNICIPAL TAXATION. on the consumption (that is, the use of the house), and not a property tax. The paving tax is only levied upon property within the city walls. It is levied according to the length of the facade to the street, and the width of the street. 26l CHAPTER XII. ITALY. Like some of the other Continental countries, the Italian system of administration is one of cen- tralisation. In this system there are three financial units, namely, the State, the province, and the commune. For the support of the State the various kinds of imposts levied by the Government arc briefly classified as follows: (i) Direct taxes; (2) taxes on consumption ; (3) taxes on business ; (4) miscellaneous (State salt and tobacco mono- poly). According to the Italian nomenclature, only those taxes which are levied on real estate, including buildings, and those levied on incomes (richezza mobile), are classed as direct taxes. All others are called indirect taxes. Under the law regulating provincial and municipal taxation, the various provinces and communes are empowered within certain limits to assess taxes supplementary to the State taxes on lands and buildings. The communes are also em- powered, within certain limits, to assess taxes 262 MUNICIPAL TAXATION supplementary to the State tax on articles of home consumption. As a matter of fact, the sup- plementary tax of this nature constitutes one of the most important sources of revenue in the Italian communes. Generally speaking, the powers delegated to the communes are: (i) To assess taxes on pro- visio.TS, drinkables, fuel and illuminating fluids, building material, forage, etc. ; (2) to farm out, with right of working, public weights, public grain and liquid measures, and the privilege of letting public stalls and booths at times of fairs and markets; (3) to assess a tax for the occupation of public spaces and areas, etc. ; (4) to assess a tax on draught animals, beasts of burden and dogs, when the last-mentioned animals are not used for guarding rural edifices or flocks; (5) to assess taxes supplementary to the direct taxes of the State as before mentioned. Taxation under the first four foregoing heads must not, however, exceed 20 per cent, of the value of the merchan- dise or interest taxed. The supplementary tax to the direct State taxes can never exceed 50 per cent, of the taxes imposed by the Govern- ment. The value upon which the land tax is levied is that already established in the records of the kingdom, according to the nature, quality, and AT HOME AND ABROAD. 263 class of lands. Ikit as the Italian records are not yet uniform, and there being at present a great inequality amongst the different records of the regions of Italy, the impost is not levied by a uniform and constant aliquot on the land-tax rent levied throughout the kingdom, but, instead, the impost is applied by a method called " distinct division," that is to sa)^ the Government, fixing beforehand the total sum to be paid in the course of the year by the contributors, to whom an only and uniform yearly aliquot is fixed, wliich is ob- tained by dividing the proportion so estimated in the records of the department to which the con- tributor belongs. In Rome, the State tax on land is 9* 16 per cent, of the appraised value ; in addition to this, lands pay the provincial tax and the municipal tax, the former of 3 "20 and the latter of 4"89 per cent., making in all 17 '2 5 per cent. In P^lorence, the State tax on land is iS'io per cent, on its net income, the provincial yo^ per cent., and the commune 20"20 per cent., making in all 45"35 per cent The tax on buildings is fixed on the basis of registered value. This is ascertained by officials called Agents of the Imposts, who estimate the precise value approximately, founded upon the proprietor's valuation. In Rome, the State tax on 264 MUNICIPAL TAXATION buildings is 16*25 on the amount of taxes due ; in addition thereto come the provincial and municipal taxes, the former being 4*94 per cent., and the latter 7'53 per cent., making a total of 2872 per cent, on the amount of the taxes to be paid. The gross amount on which the assessment is made for taxation on buildings is reduced by one-third for workshops and manufactories, and one-fourth for all other buildings. In Florence the State tax on buildings is i6'2 5 per cent., the provincial 5 60, and the Commune i6"io per cent., making in all 37'95 per cent. In Rome there is a supplementary tax to the State tax on the manufacture of spirits, beer, and mineral waters. To certain of the larger com- munes there is a restitution by the State of one- tenth of the amount collected for income tax within their limits. Aside from the supplementary levies on the foregoing State taxes, all other communal taxes are classified under two heads, known as (i) taxes discretionary to the communes, (2) communal dues. The following are classified under the first head : — I. Taxes on beasts of burden and draught animals. This tax is charged to the owners of horses and all beasts of burden. It is divided into AT HOME AND ABROAD. 265 three categories. In the Commune of Rome they are as follows : — (a) all animals used by private persons pay about £t, per annum ; (d) all animals in public service, such as tramways, omnibuses, etc., about £1 4s. per year ; {c) animals for carts and drays about los. per year. 2. Cattle tax. This tax is on the owners of cows, and every kind of farm animal ; like the tax on horses it is per head. It is an animal tax payable at the beginning of the agricultural season. This impost is classified under 13 heads, and is charged from about 6s, per horse to fourpcnce per sheep or lamb. 3. Taxes on sales and industries. The munici- pality of Rome does not assess a tax under the head of sales. There is, however, a tax on in- dustries and professions (which .should not be con- founded with the State income tax). It varies from £2 to £^0, and is assessed on persons exer- cising industries and professions, according to the importance of the same. In 1870 each commune was empowered to levy a tax on all persons, both native and foreign, doing business or practising a profession within its limits. To carry into effect the said law, the communes of Italy were divided into six classes, according to their population, and a maxium tax fixed for each, viz. : — 266 MUNICIPAL TAXATION (i) Over 80,000 inhabitants, maximum tax ^12 10 o (2) (3) (4) (5) 40.000 to 80,000 ,, 20.001 to 40,000 ,, 5,001 to 20,000 „ 2,001 to 5,000 ,, 10 8 4 8 6 8 5 o 3 4 (6) Under 2,001 The tax itself is graduated, and is based upon the estimated income of the person exercising the trade or profession. The following is a fair example of the scale in operation in Florence. MUNICIPAL TAX ON DEALERS AND PRO- FESSIONS, ETC. ,• • Income. Tax. Income. Tax. £ s. d I s. d. Up lo and over ^^2,500 I 12 10 Up lo £,2'?>0 14 I 9 2 ;{:i,8oo •2 II 5 ,, 220 15 I 5 1,600 3 10 M 200 16 I 10 1,400 4 8 15 180 17 18 4 1,200 5 7 10 ,, 160 18 16 8 1,000 6 6 5 1 >, 140 19 14 2 800 7 5 ,, 120 20 12 6 680 8 4 3 4 ,, 100 21 10 560 9 3 6 8 80 22 092 480 10 2 10 60 23 084 400 11 2 I 8 40 24 050 360 12 I 17 6 30 25 042 320 13 I 13 4 4. Tax on rentable value. This is collected from persons having furnished houses or rooms to let, It is proportioned to the income therefrom.. AT HOME AND ABROAD. 267 The municipality of Rome does not assess this tax. 5. Carriage tax. This is collected from owners of private and public vehicles of all kinds used either in the transportation of persons or mer- chandise. This tax is doubled for all . vehicles bearing coats of arms and heraldic insignia. 6. Servants tax. In Rome, masters and em- ployers are taxed per annum for male servants, five shillings ; females, two shillings. 7. Dog tax. The tax on dogs in Rome is five shillings per animal per year. Shepherd-dogs are exempted from this tax. 8. Family tax. Rome does not assess a tax under this liead. In those communes where it is imposed, it applies to all persons (not indigent) residing within the limits of the commune. A family is understood to represent several individuals bound by family ties and residing to- gether. If members of a family do not so reside, they are subject to tax as individuals. Persons residing together, but not relatives, are taxed separately. Minors are not exempt. It is a fixed graduated capitation tax, families being classified according to their estimated in- come. 9. Personal labour tax. Neither is this tax assessed in Rome. Where it is imposed it consists 268 MUNICIPAL TAXATION of an obligation for each head of a family, who, by- reason of economical conditions, is exempted from certain other taxes, to furnish annually four days, work for himself and for each able-bodied male member of his family, and each draught animal with its respective vehicle owned or worked by the family. This personal labour tax, where enforced, may be substituted by a cash payment. It was originally instituted for the improvement of the country roads. 10. Tax on signs, show-cases and awnings. This is collected from masters of stores, shops, etc., and is divided into three classes, according to the desirability of the locality in which the business establishment is situate. The following are known as communal dues:— 1. Licences for hotels, restaurants, cafes, drinking saloons, etc. In Rome, these licences are paid for at the rate of 5 per cent, on the amount of outlay for rent for the first year ; for succeeding years the rate is one-tenth of the tax for the first year. 2. Verification of weights and measures. In Rome, no tax is assessed under this head. 3. Rents of booths and occupation of public spaces. This tax is levied according to the super- ficial area occupied, the position of the site, and is used on fair days. 4. Butchers' tax. Two kinds of taxes are levied AT HOME AND ABROAD. 269 under this head. All animals destined for slaughter go first to the cattle market, and then to the slaughter-house, for both of which the taxes are obligatory. 5. Scholastic tax. As there is only one class of communal schools in Rome, this tax is about eight shillings per month, both for boys and girls. 6. Alortuaiy tax. The Italian cemeteries are, as a rule, owned and managed by the municipal authorities. The hearse service with fixed rates is also a monopoly of the municipalities. 7. Tolls. In Rome there are two toll bridges, on which the municipality exacts one halfpenny for each pedestrian, and twopcnce-halfpeimy for each vehicle. 8. Civil Registrars Acts. Certified copies of all original documents have to be paid for. 9. Miscellaneous. Under this head the muni- cipal authority assesses an annual water tax on three separate water supplies, the assessment vary- ing according to the desirability of the water, furnished in one-inch pipes. However, one of the best water supplies in Rome has been ceded to a private stock company for a term of }'ears, and which charges special rates. The average revenue in Rome from this source is about 6,938;366 lire. The octroi or internal consumption tax in Rome is upon so varied and numerous a class of com- 270 MUNlClrAI. TAXATION moditlcs that it is unnecessary to give theni here in detail. This tax is the most important source of revenue to Italian communes, and is levied on articles of common consumption or utility even upon which there ma}' be no State tax. The average annual revenue from this source alone to the municipality of Rome is about 15,027,265 lire. The rate of taxation on each article varies in the different cities of the kingdom. In Florence traders have to pay an additional tax, as the chambers of commerce of that city, apart from the municipal authority, are empowered to levy upon natives and foreigners engaged in trade, professions, or industries a tax in proportion to the income derived from such trade, profession, or industry, based upon the items of the Govern- ment income tax, and subject to the same system of collection. The only taxes collected directly by the Government are the duties on imports and exports, and the taxes on business ; other direct taxes are collected in the following manner : — The public officers or administrators prepare the tax lists, and their collection is farmed out for periods of five years to private enterprises or asso- ciations called esattore c ricevitore dellc imposte dirette (exactors and receivers of direct taxes). The cost of collections under this system varies AT IiO^IE AND ABROAD. 2/ 1 Considerably in tlie different parts of the kingdom. These associations receive a commission on the amounts collected. It is not paid by the Govern- ment, but is added to the amount of taxes to be collected, and is paid by the taxpayer. In Rome the commission is usually £2j(^ per cent, of taxes due. The right to collect taxes is in some instances even purchased from the Government. In like manner the collection of the direct taxes of provinces and communes is usually farmed out. The collectors of direct taxes on account of the province of Rome usually add to the charge of the taxpayer the same rate for collection as to the State tax. For the direct taxes of the municipality of Rome the rate is ^lyVo P^r cent, of taxes due. The cost of the municipality for the collection of its indirect taxes is about fourteen shillings per cent, of taxes due ; also 4 per cent, of amounts collected as arrearages. This rate of 4 per cent, for arrearages is equal for the whole kingdom. Since the octroi tax or duties are partly of the State and partly of the municipality, to avoid a double set of officers the municipalities usually collect them, and pay to the State a regular sum agreed upon. The municipalities in their town then either collect these duties by their own agents, or farm them out to individuals or companies. In other cases the State collects the Government and 272 MUNICIPAL TAXATION communal octroi duties, and allows the municipalities a fixed portion. This last mode is adopted in the city of Naples, and under the arrangement between the State and the municipal authorities the former collects all the excise taxes, and pays to the muni- cipality annually the net amount of 10,000,000 lire as her share. According to the Italian Civil Code, property in land and buildings consists in the right of enjoy- ment and disposal thereof in the most absolute way. But the system of stipulating a rent or other annual or periodical payment has been very much abandoned, and owing to facilities afforded by the laws of the country for redeeming such rents, which are called "conone" or "cense," it is generally the practice to pay off these rents created in former times, so as to make the property freehold. The stipulations under such contracts, called " emphitcosis," depend upon the covenants made by the parties ; or, in the default of special covenant, the general rules laid down in the Civil Code are applied. Inasmuch as the Italian law enables tenants under an " emphitcosis " to redeem the rent by paying an amount of money equivalent to twenty times the amount of the j'carly rent- — and, if the rent is payable in kind, the value is to be calculated at the average market price of the produce during AT HOME AND ABROAD. 273 ten years then preceding — it follows that a contract of " emphitcosis " which was originally intended for the amelioration of the property, by building or otherwise, is reduced to the simple payment of a certain yearly intere*st at 5 per cent, on a fixed sum of money, which sum of money is not easily to be realised by means of conveyance ; it will not increase in proportion as the value of the property may be rising, and it will be liable to depreciation in proportion as the value of money decreases. Long leases, in the ordinary form, for any period above thirty years, are not permitted. The tendency in Italy is to make all property freehold and easily transmissible. 274 CHAPTER XIII. SWEDEN AND NORWAY. Taxation in the kingdom of Sweden has as a foundation so many remote usages and ancient conditions of Hfc, that it is most difficult to elucidate the existing methods and obsolete terms, which are but little understood by the present generation of taxpayers themselves. The system may be embodied in two general divisions : (i) national (Staten) ; and (2) local (Kommunal). The local tax is derived from the following : — (i) Real estate: {a) income tax from capital or labour. (2) Church tax, on basis of State tax />cr capita. {3) Liquor licensing tax. From the tax on real estate and income by capital or labour is derived the greater part of the "amount raised for the expenses of the com- munity. The amount levied by the State on real estate and income is used as a basi« or foundation of the MUNICIPAL TAXATION. 2/5 local or kommunal tax in cities and towns, which amount is called "bcvillning" (contribution). The city or town authorities ascertain the amount necessary to meet the expenses of the year, and after deducting any income the city or town may have, find the relative value the amount bears to the amount collected by the State from real estate and income, and use it as a multiple for their assessment. Real estate is divided into two classes : — (i) Agricultural real estate, which is taxed for State purposes 3 ore on every 100 kroner of its assessed value ; (2) other real estate, which is taxed for State purposes 5 ore on every 100 kroner of its assessed value. All incomes from capital or labour exceeding 500 kroner per annum, are taxed i per cent, with certain deductions until the income is 1,800 kroner. In exceptional cases, such as numerous family, accident, long-continued illness, the authorities can raise the exemption from taxation up to 700 kroner. The assessors, in estimating the income, use the amount of house-rent paid by each taxpayer as a gauge by which to calculate the probable amount of income, as follows: .Should the yearly rent amount to from 300 to 500 kroner, the income is esti- mated at least three times the amount ; 500 to S 2 2/6 MUNICIPAL TAXATION T,ooo kroner, four times the amount; i,ooo to 5,000 kroner, five times the amount; above 1,500 kroner, six times the amount. The " bevilhiing " tax, being tlie only one where annual value is considered, may be said to be assessed in this way : If a property in the countr}', including necessary buildings, be worth ;^i,ooo, and have a building upon it also worth ;!^i,000, but which is not necessary to agriculture, such as a saw-mill, it is taken at 3 per cent., equal to £2)0, and the " bevillning " at i per cent, on the £'^0, equal to six shillings, while the revenue from the saw- mill is taken at 5 per cent., equal to £so, and the " bevillning " at i per cent, on the ;i^50, equal to ten shillings, so that the pro- perty would pay sixteen shillings per annum to the State. Now if the " bevillning " (amount of State tax on real estate and income) in the city or town was 100,000 kroner, and the amount to be raised in the town was 400,000 kroner, then every tax- payer, for every kroner paid to the State on real estate and income, is assessed four kroner by the city or town. Church tax, on the basis of the building, is a tax levied for the support of the State Church, and is expended for building and repairing churches, or parish buildings, salaries of priests, etc. AT HOME AND A15R0AL), 2// The tax is apportioned on the foundation of the bevillning also, the estimated expenses of the State Church for the year being divided among the taxpayers by certain rules on the basis of the bevillning. The amount of the bevillning is also used as a foundation for the local tax in the country. Church tax per capita (kyrkoskatt) consists of a personal tax, irrespective of age and sex, of fifty ovQ per capita. There is considerable dissatisfaction over the tax for the maintenance of the State Church and clergy, which is especially felt by all those be- longing to other denominations, who, in addition to the State Church tax, have their own clergy and houses of worship to support. The receipts from the provincial liquor licensing tax are divided thus : one-fifth goes to the budget of the province, one-fifth is paid to the Govern- ment Agricultural Society, three-fifths are paid into the municipal chest if the money has been raised in towns, but if it has been raised in the country it is divided among the parishes according to their population. Personal property of every description is exempt from taxation in Sweden. It can hardly be wondered at, therefore, that complaints arc made against the pressure of taxation upon real 278 MUNICIPAL TAXATION estate owners, who arc the occupiers as well, and particularly on the farming community, partly owing, it is said, to disproportionately high assess- ments. Another explanation may be, that per- sonal property being exempt, the tax burden falls upon real estate and income, and the latter, as is well known, being more difficult to reach, the real consequently bears the greater weight of the taxes. In the country districts, there is a distinctive feature in the Swedish system of taxation worthy of noting, different from any that has as yet been considered, and w^hich brings back to our mind our own old feudal system. It lies in certain burdens of land coming more under the denomina- tion of rent than taxation, and being, moreover, paid in kind as much as in money. These burdens are for military service, a large part of the Swedish arm}^ the so-called " Indelta " or tcnemented army being supported by persons who hold their lands on the tenure of providing soldiers. This they do partly by money payments to the soldiers, partly by gifts and provisions of various sorts, but chiefly by setting apart portions of land, which are enjoyed rent free by the above- named soldiers. Sweden is divided into districts for this purpose, and both cavalry and infantr)^ are furnished by the AT HOME AND ABROAD. 2/9 country districts, though, oddly enough, not by the towns. Some look upon this as a system of taxation, others as a system of land tenure. In the consideration of the burden of taxation upon the farming community, should also be taken into account, besides their taxes and their share of the protective tariff with comparatively little benefit from the same, the high latitude of their lands and short summers, which naturally are more detrimental to agriculture than to other industries, coupled with their competition with the farmers of other countries much more advan- tageously situated. The tenure of dwelling-houses in this country is usually freehold. The system of letting land on long building leases cannot be said to prevail to any great extent in Sweden. In the larger towns, where houses are built and let in flats, the system does not exist, the houses being built on freehold plots. In the country leases are not uncommon, but usually for large lots for agri- cultural purposes ; the tenant has the right at the end of his lease to remove any buildings erected by him, all other improvements (in culti\-ation, planting, fencing, etc.) falling to the ground-land- lord. The natural tendencx' of this is, if the buildings erected be useful and substantial, to brine about an agfrcement between the landlord 28o MUNICIPAL TAXATION and tenant for the former to take them over from the latter at a valuation. The only cases in which leases for building dwelling-houses are common in this country are those of plots in the neighbourhood of towns, and in summer resorts, sea-side and lake-side bathing places, etc., for the erection of villas. The usual term of a lease is fifty years, but shorter periods are of frequent occurrence, and everything may be said to depend on the wording of the contract. If a plot is held on lease, the lessee has no right to transfer it to a third person without the land- lord's special permission, unless the lessee has had this right specially reserved to him in his contract. NORWAY. In Norway a somewhat more healthy state of things exists than in Sweden. When Denmark ceded the country to Sweden in 1814, the Nor- wegians did not allow themselves to be thus bartered. They adopted a free constitution for themselves, and after a (e\v encounters with the Swedish troops, a treaty was agreed to, the prin- cipal article of which is the modified constitution of 1 8 14, in accordance with which Norway is a free and independent State under the King of Sweden. AT HOME AND ABROAD. 28l All Norwegians are equal in the eye of the law ; constitutionally there is no longer any nobility in existence. A decree of 1821 decided that ex- emption from taxation should cease at the death of the then existing feudal owners. Norway shows what a country, very scantily endowed by Nature, may become by means of advantageous national arrangements. It is well known how barren the soil is, and that the yield of corn is far from sufficient for home consumption. Manufacturing industries are few ; likewise are the roads. Thus the population are principally confined to navigation and fishing. The country was in a lamentable condition when it obtained its independence. Then the peasantry were the actual rulers, and although they were only plain, simple people, yet there were among them many practical, common-sense men. They have now not only promoted the material well-being, but art and science also. The printing press has found its way into the extreme points of Finland. Middle schools and good parish schools, in which the education is free, exist in most of the towns. Loans have been obtained and expended upon productive services, such as construction of har- bours, high roads, lighthouses, railways, mortgage banks, and others of a like national character. The 282 MUNICIPAL TAXATION. proceeds of the customs, which have considerably increased, are the cliief and main support of the Government. The local taxation on real estate (lands and houses), and on capital and income, and from the licensing of the spirit and other trades, are some- what similar to that levied in Sweden. The condition of the country, both as regards simplicity and solid practical tendencies, is very much similar to that of Switzerland. Land is let at an annual ground rent for build- ing purposes, either for a term of years or in perpetuity. On the expiration of the terms of a lease for a specific number of years, the tenant, as in Sweden, remains the owner of the house, which he is at liberty to remove. Under the common law, a landlord can resume possession of his property, and b}- application to the " Foged " (King's bailiff), eject the tenant or put the property and the buildings up to public auction if the rent or periodical payments be not paid. The same course can be adopted in the event of any breach of agreement, but in such case only by recourse to the competent tribunal. 283 CHAPTER XIV. RUSSIA, POLAND, SPAIN, TURKEY AND GREFXE. The Russian Government derives its revenue from a capitation and land tax, excise and customs duties, various licences and fees ; succession and deed-of-gift duties, passports, duties on express railway traffic ; tax on fire-insurance policies, on increase of salaries of public officials ; royalty dues on mines, mints, post-office and telegraph ; receipts from domain lands, mines and railways ; and other miscellaneous sources of revenue. These inclirect taxes arc very numerous, and that which forms the richest source of revenue is the duty on liquors, or, in reality, the brandy duty. It practically yields one-third of the imperial revenue. The unit of local government in Russia is the Commune. The communal institutions are unique in their way. Each commune includes all its members in a very peculiar socialistic body. The Russian system excludes the autonomy of the separate individual. The community owns its lands under a mutual obligation of the persons 284 MUNICIPAL TAXATION belonging to the place, to pay the taxes and furnish recruits. These peasant republics are found from Smo- lensk to Viatka — from the Onegabai to the Cossack Settlements on the Don ; but they are unknown in Finland, the Baltic Provinces, Astrakhan, Kasan^ Siberia, Kiev, Podolia. and Ukrania. Since the emancipation of the peasants, however, the idea which is the natural consequence of it, viz., of turning the property of the commune into private property (the first condition of a thorough cultivation of the soil) meets with constantly in- creasing approbation. The cantonal system is an extension of the patriarchal system of the commune for the sake of convenience. The district assembly is elected partly by the district town, partly by the com- munes, and the remainder by the landed proprietors. This latter body deals with (i) district communica- tion, (2) schools, (3) sanitary matters, such as drainage, vaccination, and cattle disease, etc. The Provincial Assembly is elected from the district assemblies, and decides questions above the power of the district assembly, such as (i) main roads and railways, (2) general education, (3) famine, epidemics, hospitals, etc. Town councils arc now established in most of the chief towns of the empire. In man}' parts of AT HOME AND ABROAD. 285 Russia, land pays more (sometimes four or five times as much) in local taxation than capital in the hands of a merchant pays in imperial and local taxation together. Great difficulty has been experienced in obtain- ing information as to the financial conditions of the different Russian territories, but from the import- ance of the capital of the kingdom of Poland, the manner of raising municipal supplies there may be taken as the best example that can be given of the system generally adopted. In Warsaw the municipal authorities collect the following kinds of taxes : — Tax on immovable property, (i) This is in the nature of an income tax. All private immovable properties yielding a revenue, whether liable or not to the Government hearth tax, bear this tax upon their gross revenue. It is assessed at the following rate :— Revenue under 500 roubles (;£tS), 2 per cent. ,, over 500 to 1,000 roubles (^78 to ^156), 3 p.c. „ over 1,000 to 2,000 „ (^156 to ^312), 4 p.c. „ 2,000 and over „ (^312 and over), 5 p.c. Vacant properties or properties yielding no income are assessed 5 per cent, on the appraised value. On Government buildings, and on those belong- ing to the various Government institutions, 5 per cent, on the gross revenue is levied ; (2) the 286 :\IUNICIPAL TAXATION municipality collects an additional hearth tax to the hearth tax levied by the Government authorities. This tax is computed according to the value of each building, and is an equal per- centage ratio to the amount at which the building was estimated by virtue of the ukase of the mutual government. It is collected at the rate of r25 per cent, of the gross annual value. (3) Industry tax. A tax is levied upon com- mercial certificates and licences, authorising the carrying on of a trade or industry. These licences are divided into various classes according to the nature of the different trades, and a fixed charge levied for each. (4) Hackney-coach tax. Hackney coaches and omnibuses bear a tax of 10 roubles 80 copecks (about ^i 14s. 2d.), and sledges i rouble 80 copecks (about 5 s. 8d.). (5) Excise licence tax. The municipal tax is 50 per cent, of the price for the excise liquor licence. These licences are also divided into various categories, according to the class of liquor to be sold and the nature and proportion of the business premises. (6) Miscellaneous taxes. Under this head a capitation tax is levied on each dog and horse ; also a tax on sojourn certificates, authorising the inhabitants of other towns to freely reside at AT HOME AND ABROAD. 287 Warsaw ; on foreign passports, and on the attesta- tion of various acts and documents of the municipal authorities. Owners of places of amusement and shows have to pay 3 per cent, on the gross revenue. Gas rate is 3 copecks per 1,000 cubic feet. Suc- cessful litigants have to pay i per cent, of the litigious amount, and certain scrivenery charges. Turnpike tolls are levied, and the same tax is collected from the railway companies at certain rates regulated per passenger, per animal, per weight of luggage, etc. Each portion of the Russian Empire possesses its own distinctive laws and customs respecting the tenure of houses and the system of letting land. In Russia, and especially in towns, tenements are usually freehold. The same applies in Poland. In cases where property is let, instead of being sold, to persons for terms of years, the conditions are generally that houses are to be erected thereon, an annual rent paid, and it is usual to stipulate that at the end of the term the houses become the property of the landlord. In Finland and in the Baltic pro- vinces, however, the owner of the house is at liberty to remove it at the expiration of the lease, or sell it to the landlord at a valuation. Although letting for a term is unknown, still, 288 MUNICIPAL TAXATION wbere it is resorted to, Russian law prescribes that immovable property is not to be let for a period longer than twelve years, with the exception of two cases, in which the term may be as long as thirty years, viz., when waste land is let for the purpose of (i) establishing factories, or (2) constructing country houses within seventeen miles of the two capitals (St. Petersburg and Moscow). In Poland twelve years is also the usual term ; in P"inland from ten to fifty years, and in the Baltic provinces the term is variable, the average length being about twenty-four years. Land-owners in Poland, as a rule, farm their own land, whatever its extent, either personally, through their sons or other relative, or by agent. SPAIN. The taxes paid by the people of Spain to the general government or to the municipalities are called " contributions," and the mode of assessing and collecting them is rather a novel one. The Government financial authorities at Madrid call upon each province for a certain sum to be collected from the merchants and tradespeople, the amount to be paid by each trade, profession, or occupation is stated — so much from the bankers, so much from the merchants, tailors, bootmakers, butchers, and so on, even to the smallest dealer, AT HOME AND ABROAD. 289 everything or anything. Each kind of business has its allotment, or what is termed in Spain its "cuota." This cuota is estimated according to the population of the city, town, or village in which the occupation or trade may be carried on. Thus, for example, the cuota for a merchant is put down at : — Madrid or Barcelona per annum ... 2,645 pesetas. Cadiz, Malaga, Seville, Valencia ... 1,955 »» Alicante, Ameria, Coruna, etc. ... 1,610 ,, Other capitals of provinces and seaports of 16,000 and up- wards in population ... ... 1,000 ,, Towns of 10,000 to 16,000 ... ... 700 ,, Towns of 2,500 to 10,000 ... ... 500 ,, All others pay ... ... ... 400 ,, The cuota for each district having been fixed, the Government allows them to distribute the total sum required amongst themselves, so long as the aggregate is forthcoming ; therefore, three mer- chants are selected by the Government and three others by the merchants themselves to represent them. These meet together and make an assess- ment against each firm doing business in the city, according to the amount of business done by each, the largest firm paying the most, and so on down to the smallest concerns. Each merchant is notified T 290 MUNICIPAL TAXATION the amount at which the committee has assessed him. They have a right to appeal to the committee, and from thence to the Government, but generally some satisfactory arrangement is come to before the Government is appealed to. To the cuota fixed as above is added 18 per cent, as an annual tax to the city or municipality in which the merchant or tradesman is located, and another 6 per cent, off the total is paid for the expenses of collection. In every city, town, or village in Spain a " Con- sumos" duty is collected upon everything consumed — that is, anything to eat, drink, or burn. TURKEY AND GREECE. The fiscal condition of the Ottoman Empire is hidden from the public gaze. Its total revenue is an unknown quantity, no figures being published, and no information given confidentially. It is impossible to obtain information even as to such items as the amount produced by the taxes on land and buildings. These were formerly calculated as a percentage on the revenue of the property. Proofs of revenue were comparatively easily obtained, and the incidence of the tax was said to have been reasonably fair. A new system has, however, now been adopted, under which the tax is calculated on AT HOME AND ABROAD. 29I the gross value of the property. This, it is said, gives rise to much injustice and dissatisfaction, as proof of gross vahic is difficult to establish, and the decisions of local valuers are frequently arbitrary and unjust. Practically speaking, all taxes in the empire are raised for national purposes, no taxes, not even in important towns, being permitted to be directly devoted to local purposes. Each vilayet, and towns like Constantinople, are called upon to pay over the whole revenue col- lected to the State Treasury, which, on the other hand, approves an annual budget from each administrative centre, and permits the application of such funds as may be temporarily found in the local treasury to the payment of approved local demands. The following are, so far as can be ascertained, the nominal rates of taxation on the different classes of land and house property ; but the nominal and real rates are frequently widely divergent : — 1. Land on which no building exists, 4 per 1,000. Agricultural land pays, in addition, the tithe of the produce (" dime "). Vineyards which do not pay tithe pay 10 per 1,000. Gardens and orchards pay 10 per 1,000. 2. Houses valued at less than 5,000 piastres T 2 292 MUNICIPAL TAXATION (^45) are exempt from taxation when inhabited by the owner. 3. Houses valued over 5,000 and under 20,000 piastres (;^i8o) pay 5 per 1,000 when inhabited by the owner. 4. Houses valued over 20,000 (^180) pay 8 per 1,000 when inhabited by the owner. 5. All houses rented pay 10 per 1,000. 6. All shops and warehouses pay 10 per 1,000. 7. Small houses in vineyards pay 8 per 1,000 when inhabited by the owner, and 10 per 1,000 when rented. 8. Fishing stations pay 4 per i.ooo. 9. Ecclesiastical property (" Evkaf "), and pro- perty of which the revenue is specially devoted to religious or charitable purposes, pay 4 per 1,000. An additional h per 1,000 is levied on all pro- perty in land for the support of Mussulman schools. GREECE. The country that produced a Pericles must have indeed retrograded when its administrators have to acknowledge that statistics are not kept, and this important criterion of the present condition and future prospects of the nation absent from its archives. Liberty and political sagacity found a nursery in the old Greek commonwealths — commonwealths, AT HOME AND ABROAD. 293 and not mere municipalities, such as we are used to in modern times. However, their gradual extinction was the necessary consequence of the changes which followed on the centralising and despotic tendencies of the late Roman Empire, and the subsequent westward march of civilisation appears to have sapped the older country of its energy and prosperity. It is, therefore, difficult to fathom the dis- tribution of taxation, but it is believed that the poorer classes pay far more in proportion to their income than the rich or well-to-do classes. The relations between indirect and direct tax- ation in national matters are as 2 1 to i, the prin- cipal source of the national revenue being collected in the Custom House by taxation of imports. In Piraeus the principal revenue of the local authorities is also collected at the Custom House. It receives 5 per cent, on the sum charged as Customs dues by the Government on all goods imported for sale or use in the town. The other sources of civic revenue are the rents from corporate property; 10 per cent, of the tax collected by Government as licence to trades and on all kinds of business in the town ; 10 per cent, of the Go- vernment house-property tax in the town ; and the tax on vineyards and vegetable gardens, etc., in the township. APPENDIX. 297 APPENDIX I. TAXATION IN BRITISH COLONIES. {^Being Extracts from Parliamentary Return No. i8l — 1891). RETURN compiled from Replies to Circular Despatch, showing — I Taxation on Land : [a) The Percentage on the Annual Value which the Rate levied amounts to ; {^) The Total Amount raised, the Totals for Local and National Purposes being stated separately ; {c) The Percentage which the Amount raised by Taxation of Land bears to the Total Taxation. 2 Taxation of Buildings : (a) The Percentage on the Annual Value which the Rate levied amounts to ; (^) The Total Amount raised, the Totals for Local and National Purposes being stated separately ; [c) The Percentage which the Amount raised by Taxation of Buildings bears to the Total Taxation. Taxation on Land in British Colonies. ^ Percentage Amount raised. '^■- °% on the annual value which the rate U'" S" ra 2c«h levied Local National §O.Q-g amounts to. Total. i:! S Purposes. purposes. £■= h £ £ £ Gibraltar Nil Nil Nil Nil Nil Malta ,j ^, Sierra Leone ... ,1 J, Gambia ,1 J, „ Gold Coast J, ,, ,1 ,, ,, Lagos ,. ,, ,, ,, ,, Jamaica ■85 15,658 15.658 ,, 2-8 Bahamas Nil Nil Nil ,, Nil St. Lucia jj ,, ,, ,, St. Vincent 6d. per acre 1,268 ,1 1,268 4'47 Antigua Not ascertainable 2,980 2,980 Nil 8^ St. Kitts and Nevis jj 4.400 4 400 ,, 10-99 Virgin Islands ... ,, 131 131 ,, 1073 Dominica 2 1,938 1,938 ,, 9 Montserrat On lands and build- Not Not Not Not ings jointly ; esti- stated stated stated stated mated 7j town. 10 country Bermuda ■118 on assessed capital value of lands and build- ings jointly 1,259 1,259 4-48 Barbados 2S. 8d. to 4s. lod. per acre 25.894 21,713 4,181 14-42 Ceylon Nil A-ote.—The Paddv Tax Nil H which is vi Nil tually a land Nil tax, yield Nil ed in i883 Rs. 8?3,5oo (national purposes), or 9-39 per cent, of the total taxation. Straits Settle- ments 5 331,846 Not stated Not stated ■83 Hong Kong Nil Nil Nil Nil Nil Mauritius (Port Louis) Lands and build- ingsjointly; three- fifths, with an ad- ditional -50 there- Rs.181,837 Rs.181,837 Not stated on for 1890 £ £ Falkland Islands ,^,d. per acre = '52 on annual value 1,476 1,476 „ 30 St. Helena Lands and buildings iointly, i 'i 941 941 ,, 158 New Guinea ... Nil Nil Nil ,, Nil Basutoland ,, ,, ,, ,, ,, Bechuanaland Lands and buildings (Vryburg) ... jointly, 27-08 897 897 ,, "■5 Zululand (Enton- janeni District) I "5 — " ^ •3 Fiji: _£■ Suva Town ... 12-08 153 153 / l.°.S§ LevuVa Town 7'5 209 209 •■I 362 362 MUNICIPAL TAXATION. 299 Percentage Amount raised 11 ol on the (u«25 pnnual value Avhich the rate ^^i:£ 2 cSH levied Local National Sg.Q-3 amounts to. Total. si s Purposes. purposes. S." H £ £ £ Gibraltar 75 10,829 10,829 Nil S-8S Malta Nil Nil Nil jj Nil Sierra Leone ... jj ,, Gambia 3 410 410 " Not stated Gold Coast Nil Nil Nil ,, Nil Lagos ,, „ „ „ ,, Jamaica 13-8 54,400 54,400 ,, 9-6 Bahamas 5 700 700 ,, I '5 St. Lucia Not exceeding 8 2,400 2,400 '■ Not stated St. Vincent 3'5 805 805 ,, 2-84 Antigua 4'5 760 760 ,, 2 St. Kitts and Nevis 4 570 570 ,, I '43 Virgin Islands ... 7'5 67 67 ,, 5'25 Dominica I 912 Not stated Not stated 4'5 Montserrat See land Bermuda See land Barbados 5 5,887 5,887 Nil 3'27 Ceylon 8-87 Rs.29S,3oo Rs. 295, 300 ,, 3'i4 Straits Settle- Not Not ments II $430,653 stated stated II '24 Hong Kong Victoria, 13 ; Hill districts, 8 75 ; Kowloon and villages, 7 ■?375,ooo $375,000 3125 Mauritius See land Falklands 1-66 £60 .^60 Nil I "39 St. Heleni See land New Guinea ... Nil Nil Nil J, Nil Basutoland 14s. per hut 18,674 ,, ^18,674 92 Bechuanaland ... See land Zululand 14s. per native hut 28,000 Not Not 73 stated stated „ Fiji : s's . Suva Town ... 17-08 2,368 2,368 Nil ( "rt c '^-^ Levuka Town 7"5 599 599 Nil g|§B 2,967 2,967 2 ' 300 MUNICIPAL TAXATION CANADA. Province of Ontario. In the province of Ontario taxation on land and buildings is for municipal and school purposes only. Land and buildings are included in the term " real property," and separate valuation is not required by the Assessment Act. For the purpose of assessment, real property is estimated at its actual cash value, as it would be appraised in payment of a just debt from an in- solvent debtor, and the rate is levied upon such valuation. The following table presents the assessment statistics of the province by townships, towns and villages, and cities, for the year 1887, being the last year for which the returns have been com- piled : — Classes of Municipalities. Value of Personal Property. I Dollars. Townships ... ... ' 428,614,636 Towns and Villages ... 91,014,414 Cities 132,839,465 Totals 652,468,515 Taxes Imposed. Rate of Taxation. Dollars. Mills.onDoIs. 4,157,562 97 1,729,274 19-0 2,444,246 18*4 8,331,082 1277 (Signed) A. Blue, Deputy Minister of Agriculture. AT HOME AND ABROAD. 3OI MANITOBA. Memorandum as to Source of Revenue and System of Taxation in Manitoba. (a.) The revenue of the province is derived from the following sources, viz. : — Subsidy from the Federal Government, fines, marriage licences, liquor licences, etc, etc. There is no direct national tax levied, all levies on lands or buildings being expended for local purposes only. (b.) All lands in rural municipalities improved for farming or gardening purposes are assessed at the same value as such lands would be assessed if unimproved, but lands improved for other purposes than the above, the value of the improvements are added to the assessments of the lands. (c.) All produce from lands occupied as farms or gardens are exempt from taxation ; live stock and farming implements, the property of a farmer, are also exempt to the value of 1,000 dollars. (d.) In villages, towns, and cities the assess- ment of lands is ma le according to the actual value. ^02 MUNICIPAL TAXATION AUSTRALIA. New South Wales. Neither land nor buildings are taxed for national revenue in New South Wales. For local purposes the Municipalities Act (31 Vict. No. 12), provides that municipalities may levy rates of not more than one shilling in the £ for ordinary purposes, and not more than one shilling in the £ for special purposes. The assessment is made in the following manner, viz. : — Upon nine-tenths of the fair average rental of all buildings and cultivated lands, or lands which are, or have been, let for pastoral, mining, or other purposes, whether such land or buildings be actually in occupation or not, and upon five per cent, of the capital value of the fee-simple of all unimproved land. Land is not taxed separately from buildings unless it be not improved (that is in effect un- occupied) ; it is therefore impossible to distinguish, as this return requires, taxation on land from taxation on buildings. The attached statement shows the valuation of lands and buildings for purposes of local taxation and the amount of taxation for the year ended February, 1890. AT HOME AND ABROAD. 503 VALUATION OF LAND AND BUILDINGS SUBJECT TO MUNICIPAL TAXATION IN NEW SOUTH WALES. Capital. Value of unimproved land ... Value of improved lands, buildings, &c £ 15,665,508 111,546,538 £ 783,275 7,009,075 Total 127,212,046 7,792,350 Taxation. For general local purposes For lighting For water and other rates £ 383,426 47,283 24,069 Total 454,778 The area of the colony within municipal boundaries comprises only 1,384,926 acres, the remainder of the colony being 197,463,074 acres. The value of lands outside municipal limits is approximately ^120,000,000, and the value of improvements thereon, iJ"6 1 ,000,000 ; total, i^ 18 1, 000 ,000. No ta.x is levied on either land or improvements. 304 MUNICIPAL TAXATION Victoria. Taxation on Land and Buildings. Taxation by General Government on land only Taxation by Local Government on land and buildings Taxation by Local and General Government on land and buildings ... Amount raised annually for national purposes on land only Amount raised annually for local purposes on land and buildings ... Total amount raised annually on land and buildings ... Proportion which the amount raised annually by the General Government by means of taxation on land bears to the total taxation by the General Govern- ment Proportion which the amount raised annually by the Local Government by means of taxation on land and buildings bears to the total taxation by the Local Government Proportion which the amount raised annually by the General and Local Government by means of taxa- tion on land and buildings bears to the total taxation by the General and Local Government Percentage of Annual Value. 7-0 57 124,308 732,324 ;^856,632 Per Cent. 3-3 80 -o 18-4 Note. — The General Government taxes land held in large blocks, viz. : — 7,080,968 acres in all, but does not tax blocks under 640 acres in extent, or any blocks not worth .,^2,500, or any buildings. The tax is upon the capital value, and no return is made of the annual value, but for the purpose of this talile the latter has been assumed to be five shillings per acre. The Local Government, which taxes both land and buildings, does not separate the two, and therefore it is not possible to give a statement for the taxation on the one apart from that on the other. (Signed) H. H. IIayter, Government Statist. Office of the Government Statist, Melbourne, 26th June, 1890. AT HOME AND ABROAD. 305 SOUTH AUSTRALIA. RliTURN SHOWING, FOR VeAR 1889, IN SoUTH AUSTRALIA, I. Taxation on land — {a) The percentage on the annual value which the rate levied amounts to = 4jth per cent. (b) The total amount raised for local purposes* 122,369 For national purposes! ... ... ... 67,877 Total 190,246 {c) The percentage which the amount raised by taxation of land bears to the total taxation = 9I per cent, on land only (for national purposes). 2. Taxation of buildings — (a) The percentage on the annual value which the rate levied amounts to = 4|r per cent, on lands and buildings combined (for local purposes only). £ {/>) The total amount raised for local purposes* 122,369 For national purposes ... ... ... nil. Total 122,369 ( Shires :— Total Rateable Property 26,836,905 General Rates... Separate Rates Special Rates ... Divisions : — Freehold Selections and Home- steads Lands Leased for pas- toral purposes 1,778,361 1,629,216 267,532 307,690 88,926 45,074 20,182 154,182 24,586,073 4,07,212 4,643,291 , 64,963 9,381 11,993 33,266,576 2,204,438 86,337 Total 60,103,481 3,982,799 240,519 Mode of Rating Two-thirds of the rent, but not less than 5 per cent, on capital value. Not less than 8 per cent, nor more than 10 per cent, on capital value. Not less than 5 per cent, nor more than 8 per cent, on capital value. The annual value to be taken at rent payable under the lease. The annual value to be estimated on surface value and buildings only. The Treasuiy, Queensland, 30th June, 1890. U 2 Town and suburban land, improved. Town and suburban land, unimproved. Country land ... Pastoral leaseholds ... Mines 308 MUNICIPAL TAXATION SOUTH AFRICA — CAPE TOWN. There is no land tax in the form of a general rate for national purposes in this colony, and there is no complete and reliable valuation of land, either for national or for local purposes. There is a valuation for Divisional Council purposes, but it is a partial one, not taking in land in native locations, the Division of Herschel, and the native territories ; and there is a valuation for municipal purposes of land and tenements in towns and villages. The only source of information as to these partial valuations and the taxations thereon, is the Statistical Register, and the figures given for 1889 are as follows, viz. : £ Council purposes - - 35,436,046 Municipal purposes - 13,529,569 Total amount of assessment (not stated). Total amount of taxation received : £ Divisional Councils - - 88,330 Municipalities - - - 166,514 There is no taxation at present either for general or for local purposes of buildings. Up to 1888 there was a direct taxation on buildings for national purposes, but the Act was repealed last year. AT HOME AND ABROAD. 309 Taxation for local purposes is levied not on buildings alone, but -on buildings and land, valued as one. The last valuation of buildings in 1888, for national purposes, gave : £ Valuation - - - 16,152,590 Taxation - - - 101,106 Percentage of taxation on total taxation of colony : — ^i,595>457 - - - 6-34 The figures given, however, will not admit of comparison with returns from other countries and colonies. .^10 MUNICIPAL TAXATION. < < n '6 c o c o 'o'o > 1) c "o ^? s? a; .= oJ 3 i: u_ E o rt •- rt o " c-:2 £ 1 .o > - o o 3 4-1 rt — T3 C _rt 2 s -a rt 3 s N .S S o o a 3 ■-4 s hi! 3 C 3 2 8 Sz^z 1- s fa •r - 3 VO •5^ ■H": c r^ TS^rt o g" CQ.5 s rt 2 « u T3 o u-> O VO o _3 rt '3 W' 1 X ro ■^ 1^ r^ O 0-5 a CO On «- 00 "^ 00 vO rtT3 V g E^ o "^ ■-.5 a o -1 N » .1- V n .S'^li! 7 u a a. > (!) aJ = "2^ 2 c c c c !l- .- 11 3 rt ^15 be ^-^ o E o a, 1) 0) o o OJ CJ OJ o o o OJ OJ OJ o E5a 1 c _rt C (U > Percen Freeho Land ai whicl a, a, 1 — 4^ (U ,,; 3 > 'y. ~i rt . n H c "y "H j3 OJ E 305 S > u- '""' rt "rt "• 5 o o — ^ -a c ^8 OJ > o o M 3 o s g "rt C 3 D. > >, 3 o CL, o 'C J- > ri il "o U u;2;H^t> U l-i c rt O o 5 API 'ities of t/i^h^ a7id Consuls Value Liable cipal ;ion. 0,864 1,840 6,296 8,244 S>955 8,980 9,805 0,724 5,439 0,167 4,635 4,086 6,000 0,000 5,904 5,360 8,000 6,918 4,916 4,625 6,068 Num hou: tl Mu pal 5,720 • Observations. 29 5'^:lude that of Water Trustees. 100 19 47 sets, includes those from Gas and Water Works, &c. sets, includes those from Gas, Water, Electricity, &c. ^4|penditure, includes ;^25,ooo raised for School Board, o 493sets includes Water rents, those from other sources not 106 548 5 only. Table not including Accounts of Commissioners of (^"•^^rs of London, onl 105 22 45 10 °9er sources includes Water Rents and Rates, &c. 14 ^7^r sources includes Gas Rents, &c. S'-'wclusive of Water and Gas Debts. 1 42 J "4^erty means total Cadastral income, not yearly value of rty as in United Kingdom. Exchange 25 francs to £. The Its of 1892 were^i 1,219,928, with the extraordinary receipts, al estate, or immovable goods, borrowed, &c., the amount 18 ; with the balance of previous year, the amount was I The ordinary expenses were ^"10,767, 485 ; with the extra- pses, ^11,232,870; with other expenses, ;if 13, 363,375. li is maintained for great works and expenses on same of 3',ie, not yearly value. Exchange 25 francs to £. w APPENDIX II. of the Prtudpal Municif^aliiies of the World in iSgr, compikd fro Her Afajgst/s Consith of the Foreign Municipaiitiis. submitiiJ to t}ii Ofu-ers of the British, aud Munkipaliiy. P.H.,i... T„.l - uatKccclp. fthe Municipality. Municipality Yearly Value Property Liable Mun'Jipel pSiiy' pahty ■ ndebtedne.. c,..,„. Municipality. Municipal M^n'SUl se Total. Per Per Per r^. Per Per Ob..,..„m,. T„..ion. Source Taxation. Head. Fami'ly. Ho^U He^ Family. """■ £ £ i £ £ £ £ £ .. J- £ t. J. £ r. d. £ •■ d. £ : d. £ .. d. Ireland Dublin 245,001 1.233,139 24,332 182.003 98,652 304,987 318,599 690. S64 29.368 51.851 5 7 23 15 7 41 19 9 I 6 6 2 10 10 16 tl Belfasl 1,014.675 .89,961 144.363 320.775 655,099 608,709 761,840 58.000 3 13 9 17 9 10 243 10 9 10 Debt does not include that of Water Trustees. England Birmingham 487,000 10,388,413 262,872 .380,532 754,576 1,398.080 1,370,968 2,046,296 100,715 — 21 6 10 — 103 2 11 2 16 3 — 13 2 2 Recciiits from Ajsels, includes those from Gas and Water Works, &c. Brighton il?,833 816,615 S9,SSl 109,483 34.509 203,573 216,215 708,244 19,619 6 18 7 41 12 5 1 16 8 Bradford 2t6,36r 4.691.621 476,267 207,700 256,384 940,351 887,665 1.065.955 47,875 21 13 8 97 19 11 11 10 % ReceijiU from Assets, includes those from Gas, Water, Electricity, &c. Cardiff 143.346 1.343.192 54,665 129,355 36,542 220,562 202,141 808,980 24,563 58.000 9 7 4 23 3 2 54 13 8 1 8 2 3 9 8 8 4 7 Taxation and Expcndifjre, includes ^^25,000 raised for School Board. Carlisle 39.176 178.33s 16,904 19,687 18,440 55,031 62,407 159.805 7,774 4110 22 18 9 22 5 10 7 16 Hull 200,041 1,074,644 116,981 124,299 — 241,280 259,764 730,724 49^810 48,000 5 7 5 22 7 9 21 11 5 1 5 11 5 8 2 5 4 3 Income from Assets includes Water rents, those from other sources not Liverpool 517,980 7,237,016 66,242 499.516 50.381 616,139 559,112 2,985,439 106,134 104,890 13 19 4 68 19 11 68 3 9 1 1 7 5 6 7 5 5 4 returned. London CO. 4,232,118 30,621,813 95,829 1.692,551 712,238 2,500,618 2,449,794 33,600, 167 548.315 941,693 7 4 5 32 10 4 55 16 11 11 6 4 9 6 London (Met.) 37.694 5.136,500 157,567 (rents only) 95,498 391,940 645,005 652,962 4.094.635 5.819 (Inhabited only). 105.88s 136 5 4 882 14 2 17 6 5 ~ Ni(jhl population only. Table not including Accounts of Commissioners of Police or Sewers of London. Manchester 515.567 10,399.145 850,394 506,137 16,308 1,372,839 1,370,41s 2,844,086 100,249 20 3 4 103 14 7 98 4 2 2 17 5 13 13 4 12 iS 10 Oldham 131,463 1,528.023 181,761 67,855 8,111 257.727 203.195 596,000 22.531 29,634 11 12 S 51 11 3 67 16 4 6 17 1 904 Nottingham ... 215,000 3,247,032 325.420 179,900 137,977 643,297 633.724 1,060,000 4S.00O 43,000 15 2 75 10 2 72 3 1 2 18 II 14 14 9 Plymouth 85,000 462,000 35.235 64,75s 4,748 104,741 108,251 305.904 10.504 5 8 8 43 19 7 1 5 5 10 6 1 Sheffield 324,243 3.394,873 286,557 138,746 425.303 419,959 '■;g;S 69.69S — 10 9 4 — 48 ,4 1 I 5 10 — 6 s Income from other sources includes Water Rents and Rates, &c Walsall 72,000 250,497 '7I122 31,218 10,784 49.124 49,943 14.136 396 17 14 4 13 10 3 10 7 Scotland Aberdeen 129,543 777,977 89,256 99,622 200,878 202,007 576.918 27.748 27.S74 6 I 27 18 2 28 8 742 757 Income from other sources includes Gas Rents, &c. Edinburgh 261,225 446.35s 44.242 203,114 87.659 335.015 330,339 — 50,979 1 14 2 — 8 .5 I 1 5 3 6 9 7 Indebtedness is eaclusive of Water and Gas Debts. Glasgow 656,18s 6,718,516 1,102.403 477,650 (Included in assets). 556 1,580,053 - 4.164.916 142,830 139.038 10 4 9 48 6 5 47 2 2 — — — L5„„|, 4,579 15,932 1,090 1,395 3,041 2.800 14,62s 1,016 1,094 396 14 11 3 15 13 7 12 2 2 11 2 2 IS 1 France Paris ... '.'.'. '.'.'. 2,447.957 76,490,920 7,813.214 1,994.623 1,412,091 ii,2l9!928 10.856,343 440,606,068 84,732 794.116 31 4 11 96 6 5 902 14 9 4 8 8 13 13 5 128 2 6 1 Value of property means total Cadastral income, not yearly value of rateable property as in United Kingdom. Exchange 25 francs to £. The onlinary receipts of 1892 werc.£ll, 219,928, with the extraordinary receipts. I.e., sales of rati estate, or immovable goods, borrowed. &c.. the amount was ^12.733.518 ; with the bjtlance of previous year, the amount was ^^17,620,413. The ordinary expenses were ,f 10,767.485 : with the extra, ordinary expenses, /l 1,232,870: with other expenses, /13,363,37s. A reserve fund is maintaineti for great works and expenses on same of ;C3.657,76o. Ghent 150.157 1,538,630 S.4S2 144,494 55.204 226.6S4 210,696 3.045.7=0 31.749 30.019 I to 4 3 51 5 1 48 9 2 1 1 8 7 4 6 12 8 - Cadastral incnme, not yearly value. Exchange 25 francs to £. r\ w APPENDIX U.—Coi Denmark .,. Sweden Poland roilugal America (U.S Florence Genoa ... 1,704,269 3,138,184 1,671,149 6S3.334 19,454 '9,9J4 320,633 393.294 ■03,863 363,297 96.497 78,596 238,801 350,452 618,450 806,593 341,054 618,451 145. 374 475,902 302,178 805,42' 612,52 959,20< 3.704,243 6.156.3" 395'.« 95S.396 731.857 308,454 452.345 123,716 478,559 306,065 229,166 395.687 5.528.959 15.208,333 27,008,227 380,888,390 en;' Number „t palilV. paliry. 12,165 53.369 7,25s 36.289 8.000 So!490 15.751 30,801 35.322 =9.322 286,759 ■3.066 29,644 29.507 22,700 i,7;o 89,764 5.S53 7,000 76,000 5,402 27.159 i^:S? S4.SS3 rjls 40,000 50,000 69 7 19 5 23 .8 = 55 16 6 20 1 21 19 9 25 3 ' 42 18 63 8 679 2S Q 8 ^ Cadastral value on roll, not yeaily value of property. Exchange, 25 Lire Like Exchange, Numbers or houses and families those included in Census 1SS2. Like Exchange. Number of families only approxi ; addetl to every House and Land tax< e of Government Tax, led in 1892 • for lands, total Lire 935,127 Government .son of 10. 1 1 ,1 Lire 5,8 the City. Exchange, i I Lire in favour of ' marks toj^. Yearly value colum In Vienna all houses are locked at 10 p.m., and by universal Kreuzer are paid by everyone seeking admission after that hour. 10 florins lo £. Exchange, 10 florins to £. Exchange, 25 francs to £. " [change, : ~ ' kc En change. nee 1S93 five sul: lalioii by t05,ooc In this as other c value. See text. Exchange, 18 Kioi ' Capital value. Sec foregoing n See last note. See last note. xcd to Zurich, increasing the popu- i made on the capital and not yearly eipla principally from t o Observations, value on roll, not yearly value of property. Exchange, 25 Lire ange. Numbers of houses and families those included in Census :hange. families only approximate. House and Land taxes — Lire 65.76 .1 rate added to every 100 Lire of Government Tax. Government estimated in 1892 ^ for lands, total Lire 935,127 in reason of 10. 11 every 537 Lire estimated value ; - for houses total Lire 5,866,189 I of i6"25 for every 100 Lire of taxable income, viz., | of assessed Income Tax (Ricchezza Mobile) o, ^^ of Government Tax on nal incomes only cat. B. and C. yield 190,000 Lire in favour of 20 marks to^. Yearly value column shows amount on roll for icome and class tax, &c. all houses are locked at 10 p.m., and by universal custom 10 are paid by everyone seeking admission after that hour. Exchange, 3tO;^. 10 florins to £. 25 francs to £^. 12 florins to £. ange. five suburbs have been annexed to Ziirich, increasing the popu- ' 105,000. other cities the assessment is made on the capital and not yearly See text. 18 Kroner to £,. I rouble to 3s. 2d. ange. alue, not yearly value, taxed. ing note. )te. )te. )te. Total receipts principally from taxation. J. J. O'Meara. Printed by Cassell & Company, Limitld, La Belle Sauvage, London, E.C. 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