72 UNIVERSITY OF COLORADO STUDIES 
likely to vary with the amount of wealth, and in consequence, those 
persons having an income from investments in government bonds and 
other securities, and with a reasonable assurance of its permanence, will 
have more elaborate habitations than those obliged to secure an income 
from their personal services, for the latter will of necessity feel them- 
selves obliged to save a part of their earnings. Hence, they will not 
be able to spend so much on a habitation. Thus, it seems, the tax on 
rentals taxes the income derived from invested funds at a higher rate than 
that derived from service and so conforms to the ideal scheme of an 
income tax. 
In the French cities where the tax on rentals is in operation, a pro- 
gressive scale has been adopted. ‘The houses are classified according to 
their rental value. As a rule those with a rental below soo francs are 
exempt. The rates on the other classes vary from year to year according 
to the fiscal needs of the community.? 
In defense of this progression it is said that the lower in the social 
scale you go the higher is the proportion house rent bears to the total 
expense or income. The poor spend a much larger proportion than the 
rich for the rent of their homes. It has been claimed that a progressive 
rate of taxation on rentals would counterbalance the decreasing propor- 
tion rent bears to the total expense. While there is truth in this, it 
should be remembered that expenditure is only an approximate measure 
of a man’s income or ability to pay taxes. In a country like the United 
States where the democratic ideal is strongly emphasized, the amount 
of rent paid is a more uncertain index of income than in countries where 
social classes are more sharply defined. This is especially true of the 
middle and lower middle classes. However, this objection to the pro- 
gressive feature becomes less serious if the rental exempted from taxation 
is reasonably large. 
«In the year 1890 the following rates prevailed: 
Rentals to soo francs . . . . . ~ 6 per cent. 
; 9 609 ki Qo smeseiae Ths 3 per any 
Re es cpa 2 ae Cayetano aie ; per = 
Bf 4 OD) [ies 3D a),\ vor hke. 0) aids) Ome oar 
7 net QOD) ye oe ikal) Signet os Vie. ReCPMnes ICeTCs 
1,000 ry ear) ae I1.74 per cent. 
Big Say, Dictionnaire des finances, Vol. II, p. 854 (given in SELicman, Progressive Taxation, 
Pp. 56). 
