The Builders' OpportunitY

By

David Woodhead, President, Woodhead Lumber Company, Los Angeles.

Builders and building material dealers have made the mistake of paying too little attention to the making of the laws under which they must do business. Too often they are unorganized, and leave these matters to others.

But the time has come when they should and must seriously consider the various taxes that are levied upon them indiscriminately. They should consider whether they should line up with constructors, or with speculators.

The average contractor and building material'merchant has little appreciation of the influence of taxation on the building industry. The power of taxation, wisely used, tends to build up a community and make it prosperous. The same power, unwisely used, can depress trade, inflate speculative values, and reduce an 'intelligent citizenship from prosperity to poverty.

A man may carry a l00-pourrd sack of plaster on his back with little discomfort, but if it be tied to one of his legs he will be seriously inconvenienced. This is true of taxation. To tax homes heavily and autos.'not at all will depress home building and stimulate auto buying. If factory building in Los Angeles be heavily taxed, and those in Vernon be exempt, factories will tend to locate in Vernon. Were the owner of a vacant lot taxed the same as the owner of an improved lot he would seize the first opportunity to build, or to sell to others who would build.

New York City met the housing shortage following the war by exempting dwellings from taxation for ten years. The effect was so pronounced that when the time for complying with the law expired it was immediately extended. Now that the laSt extension has expired there has been a sharp falling ofi in that class of building.

Pittsburgh, Pa., adopted a law in 1913, reducing the tax on improvements ten per cent every three years. The result has been so satisfactorv that the chamber of commerce and the business elements -strongly endorse the idea.

Florida, realizing that taxing capital drives it away, advertised to the world that it would tax neither inheritances nor incomes. The effect has been to make that State attractive to men with capital, and to draw a large stream of tourist travel.

- Oui own State has decided to assess securities of other States at only 7 per cent of their value. This was done in Itt" intet.tt 6t fints and rich men. But why should not our legislators do something for those who are t-rying to gain a"foothold and establish- a little home or farm ?

" This is the purpose of the Tax Relief Amendment put out by the Tai nitiei" Association of California.- The propor.d'amendment exempts from taxation $2,000 wo:th of impiovements and all personal-property. It takes effect at thd rate of 25 per cent a year, in oider not to disturb business. It is haid to conceive of a measure that would have a more wholesome efiect on home building. And who, after the owner, has a more legitimate interest in building homes than builders and building material men ?

A home owner means a fixed resident, with a keen interest in the welfare of his community. The home owner may be sanely progressive, but is- rarely insanely radical' Toiexempt the frrst:$2,000 invested in a home, and change the prese?rt tendency'of Los Angeles from tenancy to homeo*tiing, would soon put us at tfie-head. of the home owning cities.-'The stimulaiion to the building industry and to manufacturing that would follow as a result of exempting from ,taxation- stocks of goods and machinery, wo-uld be the one thing to keep our present land values from a heavy slump.

The proposed exemption would undoubtedly increase to .o*" .itent the tax on the site value of land. But it is easv to see that realtors of this State would be ahead of those of every other State in advertising the advantages of California to manufacturers, merchants, and home seekers. It would turn the tide of immigration this way again.

Some say building has reached the point of saturation. That may be true oT luxurious apartm€nts and hotels. It is not trire of modest homes. More than half our people are tenants, and the percentage is increasing. If we must reverse that tendency, and make this a home-owning nation. As the national government exempts small incomes,. so the state government should encourige home ownership 'by exempting $2,000 worth of improvements.