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The amount of ground rent available for public use can be altered in different ways. Assessment practices, tax enforcement procedures, centralised controls and aids can affect public rent collections as much as a shift of the local tax base from buildings to land. Those who want to improve the public revenue system can do so more effectively if they are familiar with all such avenues of advance.

An avenue of advance which is already important and which will be more important in years to come is abolition of the special tax exemptions enjoyed today by certain private lands. Much public land is also tax exempt, but this presents a different problem, as will be shown.

Special exemption from the tax rates imposed on land generally is, on its face, a violation of the principle that land rent belongs to the public. The rent is not collected; it is forgiven. It remains in private hands.

Defenders of exemptions do not permit the case to be closed so summarily, however. The exemptions, it is argued, are given only to certain "non-profit" or "welfare" organisations which perform "public" services. The rent they keep is therefore devoted to "a public use." In this view, the exemption does not violate principle after all, but constitutes, along with the leasing and taxing, a third alternative for socialising rent.

If it is determined that certain welfare organisations are indeed performing public services and deserve the support of public money, tax exemption is not the only way to provide it. Direct subsidies could be given. Direct subsidies, being known in amount and subject to reconsideration every year by the same elected representatives who are responsible for the public budget, would be subject to the established controls. The annual reconsideration of existing exemptions is no more than a tedious formality which weighs neither the value of the service performed nor the value of the land exempted. Exemptions is not expenditure. It is non-collection. It is private retention of rent unaccounted for.

In the USA many state constitutions allow land to be held tax-exempt by certain types of welfare organisation to whom appropriations of public money are, as a matter of policy, denied. Here is a profligate settlement. The smaller privilege of controlled appropriations is denied. The greater privilege, uncontrolled retention of ground rent, is permitted. The inconsistency stems from the habit of seeing all taxes as invasions of a sphere that is rightfully private. The exemption of land from taxation is not seen for what it is - the denial of a common right. Taxes are looked upon as a necessary evil from which, if it were only possible, all should be relieved, and from which we can at least relieve those deemed worthiest.

It would make as much sense to relieve such welfare organisations of their municipal water bills. Taxes upon land are not invasions but dues. They should be collected with the same firmness a municipal water department shows to its customers. If a desperate, deserving water customer cannot pay his bill, he turns not to the water department for exemption, but to the welfare department for a grant-in-aid. Land taxes should be levied with the same inflexibility.

The familiar evils that result from exempting all land from taxation are visible when some land is exempted. Consider land speculation, for example. Exempt interests are placed in a particularly favourable position to speculate in land values, since they are not even subject to the small taxes other land speculators must pay. Many a welfare organisation, faced with the question whether or not to move from land that is unnecessarily valuable, postpone the move in anticipation of getting a higher price later. Were they subject to taxation the same as other landholders, the annual tax bill would promote better use or surrender of the land to someone who could use it better.

The same kind of inequality that results when land generally is relieved of its financial obligations exists on a proportionate scale when certain lands are tax-exempt. One welfare body may occupy extremely valuable land in a growing business district; another may be in a poor residential neighbourhood. Tax exemption may be of immensely greater benefit to the one in the growing business district, yet the organisation in the poor residential neighbourhood may be better located for performing its service. A third welfare body, possibly more useful than either of the other two, may be a non-landholding tenant, and therefore incapable of benefiting from tax exemption. A marginal business which, by strictly objective standards, may be of greater public service than any of the nonprofit welfare organisations, is also excluded from the exemption privilege.

Or consider the snoopy regulations, the red tape and paper work necessarily involved in land-tax exemptions, as in any other form of special privilege. When certain land uses involve the privilege of holding land tax-exempt, definitions of that use must be established, applications and reports must be devised to make sure that use is continued, and borderline cases must be resolved. Privilege and regulation inevitably go together. The exemption privilege also involves the possibility, realised in more than one modern nation, that tax-exempt interests will acquire large areas of valuable land. Whatever their intentions, whatever the sentiments in their favour, these interests, because of their privilege, stand separate from the common man, vulnerable to the claims of equal justice.

Where land and buildings are taxed together, they are generally exempted together. The proper solution, of course, is to exempt the building and tax the land. If a choice is to be made between taxing both or exempting both, taxation has two advantages: (1) It avoids the worse alternative of a non-property tax which does not fall at all upon land as such, (2) It enlists welfare bodies in the drive to untax buildings. Exemption of both their land and buildings places welfare bodies in a position where they stand to lose rather than gain from the advent of sound taxation. This is not the way to win allies.

The underlying sentiments which today favour land-tax exemptions are two: (1) Partiality to an exempt interest, (2) Distrust of democratic government; private welfare organisations are felt to perform public functions more effectively than publicly elected representatives.

As to the second, two points must be made: (l) Government efficiency is related to the source of public revenue. Direct taxes on land promote efficiency. (2) Surrender of the public revenue to private welfare bodies amounts to abandonment of common rights to land. The rent fund is no longer administered by delegated representatives, but by a select aristocracy. We must choose between representative government and unequal rights to land. There is no third position.