Robert Meyer · 1905
Robert Meyer’s fiscal-policy essay examines Friedrich von Wieser’s proposal to divide the Hauszinssteuer into a component shifted onto tenants and one borne by urban land rent. Meyer supports relief for cheaper housing but disputes both Wieser’s calculation of the tenant-borne share and the possibility of reducing it without benefiting landowners. His argument connects rent formation, construction incentives, and capitalization with the practical limits of tax reform.
Leider vermochte ich mich hierbei von der Richtigkeit der Lehre Wiesers nicht zu überzeugen.
English translation: Unfortunately I was unable in this connection to convince myself of the correctness of Wieser's doctrine.
The disagreement begins with Wieser’s treatment of peripheral rents as determined by construction costs and agricultural land value, while central locations command additional payments. Meyer argues that anticipated urban expansion already raises available building sites above agricultural values. Organized monopoly is unnecessary: expectations of future uses suffice. Extending the city’s effective boundaries therefore need not release land priced solely for agriculture.
Wenn sie nun mit Wien in unmittelbaren Zusammenhang treten, so mag ihre Bodenbewertung rasch steigen, damit erweitert sich aber auch dort der Kreis der bewerteten Grundstücke.
English translation: If they now enter into immediate connection with Vienna, their land valuation may rise rapidly, but with that the circle of valued plots there is also widened.
For Meyer, site valuation follows expected returns rather than constituting an independently fixed production cost. Treating prevailing land prices as irreducible expenses obscures the possibility that taxation lowers those prices. Depending on market conditions and sellers’ resistance, an increased tax may reduce land appreciation rather than construction. Existing property values cannot, therefore, reveal how earlier taxes were distributed: they already embody their effects.
The discussion of central districts adds a demand-side objection. Tenants pay a total rent, not economically independent charges for buildings and location. When rents rise, some prospective tenants withdraw, while others lose the capacity to bid for advantageous sites. Meyer consequently contests the inference that higher peripheral rents must pass completely into central rents.
Vielmehr ist auch hier mit der Wahrscheinlichkeit zu rechnen, daß ein Teil dieser Last wieder auf den Grundwert ausgeht; dies stimmt auch vollkommen mit der Erwägung, die wir oben über die Leistungsfähigkeit der Nachfrage angestellt haben.
English translation: Rather, here too one must reckon with the probability that a part of this burden again falls upon the land value; this accords perfectly as well with the consideration we set out above concerning the capacity of demand.
Supply conditions reinforce this qualification. Existing buildings cannot readily withdraw from use, and legal height restrictions complicate the claim that taxation necessarily reduces the economically chosen number of storeys. Meyer expects less shifting onto tenants than Wieser calculates, without substituting an equally definite numerical formula.
His treatment of reduced housing consumption distinguishes an individual landlord’s adjustment from that of the market as a whole. One landlord may relet space relinquished by an economizing tenant; landlords collectively cannot assume that equivalent new demand will appear. Vacancies may instead depress rents and property values. Housing deprivation is socially damaging, but does not itself prove successful tax shifting.
Meyer also examines construction-tax exemptions and private cost calculations. Exemption years materially reduce lifetime taxation; shortening them can increase the burden on new construction even when nominal rates fall. Development profits and speculative losses further complicate a mechanical division of the tax between tenants and owners. Long exemptions ease initial financing requirements, although purchasers may misjudge their value.
Property sales introduce a distinction between land rent as an economic category and the purchaser’s invested capital. A transaction capitalizes expected rents and taxes, fixing losses already incurred by the seller rather than independently determining incidence. This informs Meyer’s qualified interest in taxing future increments in value: such taxation can reach gains received by their beneficiaries without indiscriminately burdening returns already embodied in purchase prices.
The practical argument identifies new construction, extensions, and rebuilding as the principal channels through which relief can moderate rents. Relief to existing houses does not itself create additional supply. Even concessions for new building may partly raise site prices. Meyer thus favours concentrating incentives on building activity without promising tenants their entire benefit. He also distinguishes restraint of future rent increases from absolute reductions that impair existing investments.
Restricting relief to the assessed building component might favour cheaper sites, but would require uncertain separate valuations of land and structures. Predictable concessions may stimulate construction more effectively than theoretically refined but unstable assessments. Meyer’s central conclusion is that accounting separation cannot establish either historical tax incidence or the future distribution of relief: both depend on demand, construction, capitalization, and changing market conditions.
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