Richard Reisch on Building-Tax Reform

Richard Reisch’s two interventions in the sixteenth session of the building-tax reform inquiry, held on 11 December 1903 and published in 1904, address the alleged double taxation of manufacturers operating in their own buildings. These official hearing contributions develop through exchanges with Dr. Singer and references to Hofrat Dr. Philippovich. Reisch’s central claim is that the combination of business and building taxation does not itself establish double taxation: a valid comparison must consider the burdens borne by tenants, the assessment of earning capacity, and the economic advantages of ownership.

The first intervention compares rented and owner-occupied factory premises. A manufacturer renting premises contributes to the rental tax through the rent, whereas an owner-occupier may pay it on an assessed equivalent rental value. Reisch therefore rejects the suggestion that business tax makes a separate building-tax charge redundant. Business-tax commissions already consider circumstances affecting earning capacity, including building-related burdens and rent payments. Moreover, the two taxes have substantially different rates:

Keinesfalls läßt sich die jetzt gezahlte Hauszinssteuer durch die Erwerbsteuer ersetzen, weil die Füße dieser beiden Steuern absolut verschieden sind.

English translation: Under no circumstances can the house-rent tax currently paid be replaced by the business tax, because the rates of these two taxes are entirely different.

This distinction supplies the practical force of his objection. If tenants continue to bear house-rent tax while owner-occupiers are exempted from building tax, ownership receives preferential treatment: the lower business-tax rate effectively replaces a house-rent-tax rate of 14 to 19 percent. Reisch’s comparison thus turns the proposed relief into a question of unequal treatment between businesses using different forms of premises.

The second intervention answers Singer more explicitly. Reisch maintains that both tenants and owner-occupiers are affected by business and building taxation. To establish that the latter are worse off, two further claims would have to hold: their imputed rental assessment would have to exceed the appropriate actual-rent comparison, and ownership would have to exercise an excessive influence on their business-tax assessment. Neither proposition, he argues, can simply be assumed.

His reasoning distinguishes an assessment that takes ownership into account from one that penalizes it unduly. Occupying one’s own building is one circumstance among many relevant to earning capacity, comparable to the statutory distinction between operating with one’s own capital and borrowed capital. Ownership may also confer genuine advantages. A proprietor adapting premises faces less risk concerning their continued use than a tenant who may have to leave after a few years. A heavier assessment can therefore reflect differences in economic position rather than duplicate taxation of an identical capacity.

Ich glaube also, daß hier bei richtiger Veranlagung eine doppelte Besteuerung nicht konstatiert werden kann.

English translation: I therefore believe that, with proper assessment, double taxation cannot be established here.

The qualification concerning proper assessment is essential. Reisch does not demonstrate that every existing valuation is correct; he argues that the tax arrangement need not produce double taxation when administered appropriately. His defence depends on assessment commissions recognizing relevant burdens and advantages without exaggerating their significance.

The closing reply to Philippovich shifts from assessment to tax incidence. Reisch denies that, because landlords previously passed the tax on to tenants, abolishing it must necessarily benefit tenants in return. The saving could instead remain with landlords. This final distinction extends the logic of the interventions: neither legal liability nor the removal of a tax determines its ultimate economic distribution by itself. The document’s relevance lies in this compact separation of tax rates, valuation, earning capacity, and incidence—four questions that an apparently straightforward demand for relief risks conflating.