LOCAL TAXES in 



The Economy of Rates 



Another persistent idea may be illustrated from the same 

 writers. They accept the notion that a local income tax 

 is impossible. They accept also the idea that local profits 

 cannot be taxed. That also is impossible. And yet these 

 same Commissioners show most clearly that a rate for 

 onerous purposes is really an income tax levied on all kinds 

 of incomes, because the possessors of these incomes are, for 

 the most part, occupiers of dwellings. 



A rate is an income tax, so far as the ratepayers are con- 

 cerned ; but it is partial and inequitable, because some 

 incomes escape altogether and some partially. 



We might not be able to tax all profits in the most 

 equitable way, but we might, at least, tax them to some 

 extent, and, so far, that would relieve the other ratepayers. 

 And we might supplement the dwelling-house test, by other 

 local signs and evidences. 



The legal fictions regarding the rating of railways are 

 instructive (p. 126). The economic or political idea was 

 to rate railways according to their profits ; but the lawyers 

 came in, and a mass of cases have given rise to all sorts of 

 rules for the discovery of the rateable property used by the 

 railways. In this case, at least, it would have been infinitely 

 simpler to levy the rates on the dividends, but the fiction 

 of real property only being rateable prevented it. 



It is stated (p. 124) that if the whole of onerous ex- 

 penditure could be met from national funds it should be 

 done, but it cannot. The reason assigned is that those 



