Hermann von Schullern zu Schrattenhofen: Review of Fabrizio Natoli’s L’imposta sull’incremento di valore del suolo urbano (1909)

Schullern’s German review examines Natoli’s 1908 study of taxation on increases in urban land value. Following the book’s three-part structure, it presents the empirical basis, fiscal justification, and assessment methods of the tax. Its central judgment is qualified: Natoli treats the subject comprehensively from the standpoint of public finance, but leaves important social-policy consequences unresolved.

The first part establishes urban land appreciation as the taxable object. Schullern reports that Natoli’s figures from several large cities show sustained increases in land values, often without corresponding growth in returns from sites and buildings, and accompanied instead by falling interest rates. This distinction between capital value and yield prepares the conceptual issue raised by the second part: what justifies taxing appreciation?

Natoli rejects justifications based on ability to pay, state-provided benefits, and socialist principles. He instead defines the levy as a supplementary tax on particular wealth, whose rationale depends on its place within the general fiscal system. Schullern challenges the broad proposition that the quantity of wealth determines individual taxable capacity, arguing that income generally provides the relevant measure. Yet he accepts the marginal-utility approach to the sacrifice involved in taxation:

Daß die Steuerleistung in diesem Sinne als ein Konsumproblem aufgefaßt wird, scheint mir richtig (S. 72).

English translation: That the payment of taxes is in this sense conceived as a problem of consumption seems to me correct (p. 72).

The review thus distinguishes disagreement over the measure of taxable capacity from agreement about the utility framework. Schullern also acknowledges that the quantity of wealth is specifically relevant to wealth taxes, even if it cannot explain taxable capacity in general.

The third part considers taxes on developed and undeveloped sites, taxes triggered by ownership transfers, and direct taxation of appreciation. Natoli favors taxing the actual increase in value through a single capital payment, rather than imposing a continuing or repeated charge upon it. Assessment and payment may occur periodically or at transfer; although he initially prefers the latter and examines German examples, he ultimately recommends combining the two methods. Schullern briefly registers further discussions of unearned increment, progression, and tax shifting.

The decisive reservation concerns whether the tax could itself raise building-site prices and thereby cause social harm:

Das Thema ist — staatswirtschaftlich angesehen — im vor- liegenden Buche gewiß allseitig angefaßt; wer aber die Wertzuwachssteuer in erster Reihe als eine sozialpolitische Maßregel betrachtet, wird die Beantwortung der vom Verfasser am Schlusse aufgestellten und oben bezeichneten Frage und manches, was damit zusammenhängt, ungern vermissen.

English translation: The theme is — regarded from the standpoint of public economy — certainly taken up on all sides in the present book; but whoever regards the increment-value tax primarily as a measure of social policy will regret missing the answer to the question raised by the author at the close and designated above, and much that is connected with it.

This concluding distinction gives the review its significance: a coherent fiscal rationale and detailed assessment scheme do not settle the tax’s value as a social-policy instrument. Schullern credits Natoli’s systematic treatment while identifying the unanswered question of price effects as the limit of its explanatory reach.