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1 These figures include social security contributions.

2 The first income tax is often said to have been introduced into Britain in 1799. However there had been many previous taxes that did attempt to tax income. In Britain these attempts to tax income include the Land Tax of the 18th century in which the tax base incorporated stipends in addition to property based revenues. Also note the Taille in pre-revolutionary France which was an income tax in character, although defective in that the richest were exempt.

3 This is certainly the case if church taxes (such as tithe or dîmes) and papal taxes (such as 'Peter's pence) are included in the definition of property taxes. It should not be assumed that property tax was the most important source of tax revenue by choice. It was more often that real property was the most visible form of wealth and the only tax base available.

4 This simple conclusion needs qualification and should be used with caution. If the average yields of property taxes are considered as a percentage of GDP, rather than in relation to tax revenues, it is seen that there has been remarkable stability. The OECD average property tax receipts as a percentage of GDP was 1.9 percent in 1965 and exactly the same in 1998.

5 Although in general people and business occupy properties that are consistent with their ability to pay the tax there will be exceptions. A common case found throughout the world, and one, which always causes sympathy, is the widow in the family house. Sentiment and circumstance may make it difficult to move but assessed property tax may be difficult to pay with her present income. The public is always sympathetic to widows who are always assumed to be poor.

6 Property tax designers tend to have in their minds a vision of perfectly matching democracy and taxation. The elected representatives of the local community decide the local needs and calculate the resulting local revenue required. The necessary rate is then set. This vision of local democracy is sometimes encouraged by notions of the democracies of ancient Greece or newly independent America. However in both those cases there was not universal suffrage. Only property owners (and therefore taxpayers) had the vote.

7 The alternative is charging by the amount of water used as assessed by water meters. The installation, maintenance and reading of meters is expensive. Meters may save water: it was about 11 percent in one study in the UK. The decision on whether to install meters can be made by calculating the cost of supplying the additional water and comparing that with the cost of meters.

8 It is not only the low-lying marsh areas in which drainage boards might operate. There is also a widespread problem relating to systems of under-soil drainage and privatisation. During the socialist period extensive systems of under soil drainage were installed on collective and state farms. In many countries the restitution to the former owners takes no account of the pattern of drainage which will now have to be maintained communally if whole systems are not going to silt up and fall into decay.

9 An up to date valuation list will assist only in the first stages of a process of consolidating scattered holdings. A much more accurate and painstaking valuation will be required to satisfy the landowners before final apportionment of the land under a new layout.

10 This general condition has little application at present in most countries in transition where agricultural land prices are low, in sharp contrast to the sometimes adjacent EU countries.

11 The cost yield ratios for rural areas tend to be less favourable. The unit costs of assessment will be the similar in both rural and urban areas. However the average yields in rural areas will be much lower.

12 Properties must change hands because the human condition is same throughout the world whatever the social regime. People die, get married, have children, start businesses, change jobs, get old, get divorced, etc all of which may require a move from one property to another. A market will develop to accommodate these needs in some form or other. The greater the regularity and transparency of the property market the better it will be for the economy.

13 It is up to the valuers to find the evidence whether it is in the official domain or not. It is what valuers are trained to do and that is an integral part of their professional task. Of course evidence of value obtained from non-official sources are somewhat harder to prove on appeal but this is not an insurmountable difficulty.

14 This takes the form of rates per square meter set by law or regulation for various different types of property in different locations. Usually these flat rates are meant to reflect market values. The tables from which they are derived are often elaborate and the result of much work.

15 It is important that the whole list is available for inspection at no cost by any member of the public and not only taxpayers. The law should incorporate this right. Officials should not obstruct it.

16 A site valuation basis for valuation usually suffers from there being very little evidence of site values. This can seriously detract from the credibility of the assessments produced.

In any consideration of the options for bases of assessment for property tax it is likely that there will, at some point, be reference to the works of the charismatic 19th century economist Henry George. A key element in his prolific work was his advocacy of a single tax levied at 100 percent of the annual value of land (but not the buildings and improvements thereon). This single tax would be a substitute for all other taxes.

Although the single tax is central to his theories it is part of a larger vision. It is not an uncomplicated advocacy of site value taxation and it does not do justice to his work to view it so narrowly. In his utopian vision he believed that " in a simple change in the method of taxation lies the fundamental cure of pauperism and low wages and all the social difficulties which afflict the modern society". He also said "it is not necessary to confiscate land, it is only necessary to confiscate rent". This confiscation of land value was also an important and deliberate part of his scheme.

Few now believe in the practicality of this theory although the fervour that he engendered in his lifetime still exists for some.

17 There used to be a particular problem associated with bases of assessment that applied to rental values. It concerned the inter-relation with legal rent control provisions. The question was whether the rental value was the rent payable in accordance with rent control laws or the open market rent that would be payable if those laws did not exist. In the UK the courts determined that it was the full unrestricted open market rental value. In India the courts said it was the restricted value, and by doing so the whole rating system was considerably curtailed. The different opinions of the two national courts were understandable if the different underlying philosophies of the taxes in the two countries are considered. In the UK rates were a tax on occupation and the occupier pays the rates. The value of his occupation is not affected by rent control. In India the tax is on ownership and the owner pays the property tax even though it is assessed by reference to the rental value. Rent control affects the value of his ownership and this should be reflected in his assessment.

It would not be difficult to rectify this defect. Rent control in effect transfers an element of value to the tenant. If the law provides for a tenant to be assessed for a partial 'ownership' where rent control exists, this element of value is partially picked up in the tax net.

Rent control has not disappeared but is now much less common in the world. It is therefore much less likely to be a problem with which a property tax legal code will have to cope.

18 There are jurisdictions where both the owner and the occupier are severally liable for property tax. This is an option in most circumstances. However there may be administrative disadvantages. It may cost more because there will be more separate assessments to value and list and administer.

19 These figures are based on the author's experience.

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