rent, for which it would for some time increase
the competition. But the rents of
every class of houses for which the competition
was diminished, would necessarily be
more or less reduced. As no part of this reduction,
however, could for any considerable
time at least, affect the building-rent, the
whole of it must, in the long-run, necessarily
fall upon the ground-rent. The final payment
of this tax, therefore, would fall partly
upon the inhabitant of the house, who, in order
to pay his share, would be obliged to give up
part of his conveniency; and partly upon the
owner of the ground, who, in order to pay
his share, would be obliged to give up a part
of his revenue. In what proportion this final
payment would be divided between them, it
is not, perhaps, very easy to ascertain. The
division would probably be very different in
different circumstances, and a tax of this kind
might, according to those different circumstances,
affect very unequally, both the inhabitant
of the house and the owner of the ground.
The inequality with which a tax of this
kind might fall upon the owners of different
ground-rents, would arise altogether from the
accidental inequality of this division. But
the inequality with which it might fall upon
the inhabitants of different houses, would arise,
not only from this, but from another cause.
The proportion of the expense of house-rent
to the whole expense of living, is different in
the different degrees of fortune. It is, perhaps,
highest in the highest degree, and it
diminishes gradually through the inferior degrees,
so as in general to be lowest in the
lowest degree. The necessaries of life occasion
the great expense of the poor. They
find it difficult to get food, and the greater
part of their little revenue is spent in getting
it. The luxuries and vanities of life occasion
the principal expense of the rich; and a magnificent
house embellishes and sets off to the best
advantage all the other luxuries and vanities
which they possess. A tax upon house-rents,
therefore, would in general fall heaviest upon
the rich; and in this sort of inequality there
would not, perhaps, be any thing very unreasonable.
It is not very unreasonable that
the rich should contribute to the public expense,
not only in proportion to their revenue,
but something more than in that proportion.
The rent of houses, though it in some respects
resembles the rent of land, is in one
respect essentially different from it. The
rent of land is paid for the use of a productive
subject. The land which pays it produces
it. The rent of houses is paid for the
use of an unproductive subject. Neither the
house, nor the ground which it stands upon,
produce any thing. The person who pays the
rent, therefore, must draw it from some other
source of revenue, distinct from and independent
of this subject. A tax upon the rent of
houses, so far as it falls upon the inhabitants,
must be drawn from the same source as the
rent itself, and must be paid from their revenue,
whether derived from the wages of
labour, the profits of stock, or the rent of
land. So far as it falls upon the inhabitants,
it is one of those taxes which fall, not upon
one only, but indifferently upon all the three
different sources of revenue; and is, in every
respect, of the same nature as a tax upon any
any other sort of consumable commodities. In
general, there is not perhaps, any one article
of expense or consumption by which the liberality
or narrowness of a man's whole expense
can be better judged of than by his
house-rent. A proportional tax upon this
particular article of expense might, perhaps,
produce a more considerable revenue than any
which has hitherto been drawn from it in any
part of Europe. If the tax, indeed, was very
high, the greater part of people would endeavour
to evade it as much as they could, by
contenting themselves with smaller houses,
and by turning the greater part of their expense
into some other channel.
The rent of houses might easily be ascertained
with sufficient accuracy, by a policy of
the same kind with that which would be necessary
for ascertaining the ordinary rent of
land. Houses not inhabited ought to pay no
tax. A tax upon them would fall altogether
upon the proprietor, who would thus be taxed
for a subject which afforded him neither conveniency
nor revenue. Houses inhabited by
the proprietor ought to be rated, not according
to the expense which they might have cost
in building, but according to the rent which
an equitable arbitration might judge them
likely to bring if leased to a tenant. If rated
according to the expense which they might
have cost in building, a tax of three or four
shillings in the pound, joined with other taxes,
would ruin almost all the rich and great families
of this, and, I believe, of every other civilized
country. Whoever will examine with
attention the different town and country houses
of some of the richest and greatest families in
this country, will find that, at the rate of only
six and a-half, or seven per cent. upon the
original expense of building, their house-rent
is nearly equal to the whole neat rent of their
estates. It is the accumulated expense of several
successive generations, laid out upon objects
of great beauty and magnificence, indeed,
but, in proportion to what they cost, of
very small exchangeable value.[58]
Ground-rents are a still more proper subject
of taxation than the rent of houses. A
tax upon ground-rents would not raise the
rent of houses; it would fall altogether upon
the owner of the ground-rent, who acts always
as a monopolist, and exacts the greatest rent
which can be got for the use of his ground.