LAND TAX v. PROPERTY TAX.

Ashburton Guardian, Volume VII, Issue 2587, 1 December 1890, Page 2

LAND TAX v. PROPERTY TAX.

TO THE* EDITOR. Sir, —Witli your kind permission I would ask for space to reply to Mr Purnell's letter m your issue of Thursday evening. The Property tax iB objected to on principle because it not only taxes all industry; but'taxes it at its highest value, thus becoming very oppressive, instead ot* taxing the' minimum value, Under the Property tax the more a man improves his property and beautifies his home the more he is taxed upon it;^ '.The principle of the Lttnd'tax is to exempt all VAlue.created by industry and, improveme4tp,»n|l tax on a basis of unimproved value, only. It has been said a man should pay on all his wealth; This may look w«ll on the surface, and sound well to the ear*' but will the same tax put on all wealth.alike work out justly-and equitably? I think not. For example, one man invests his capital m land, and by a proper system of work* ins; it obtain good results, and improves the quality of the land and' keeps it m good heart. Another, man invests his capital m buildings, or., machinery, which are constantly depreciating m value. Is it just to tax both these investments m the same manner ? I reply, certainly not. This is what the Property tax does. The mode of imposing a tax is as important as 1 the imposition of the tax itself—a prin- ; ciple very often-lost sight of. I maintain that, whilst the Property tax may suit some, it is not the •fairest andjmost equitable tax to impose upon all * kinds of! wealth, because it taxes, all tlie product! lof labor and. industry, m, the highest degree, becoming oppressive, and taxes alike that which decreases m value with the using as welhas'that which increase.l). Now, for the Land tax. Your correspondent, Mr Purnell, wishes to know why I take £7 as the unimproved-value of the farm mentioned m my previous,letter. I will try to explain, The figures you published m a recent iss.ue show .that there are at least 36,000,000 acres which would be taxable under a Land tax (were the Property tax abolished). This, valued at £2 per Acre, would be £72,000,000, which average value would, I think, be a very low one when all the town lands m the colony were taken .at fcjie'same value. One penny m the £ on £72,000,000 would yield £300,000, or within £55,000 of the Property tax returns. But, sir, I contend that all tha land, should be classified according to quality and position—say into four classes; bad, medium, good, and best—and the tax should be graduated accordingly ; the man ' 'having the best land being able jbb pay a larger proportion than the man with, the poor land, and it is onlyjustthatheshoulddofcb. Tjbetaxwould thus fall more equitably upon* those who ought to pay it It will, Itjn'ufc, be seen at a glance that with the lands properly i classified, and a graduated, tax imposed, a a much larger amountihan £300,000 could be raised without ' crushing , anybody. Under this system the small fatmer would pay less than he, now .does, and' the large landowner would have to j&y more than lie now does—in fact,' .nis fair share towards the taxation' imposed on the money borrowed and spent to improve his large holding. If the land were thus classified the valuation^ fcr, taxation purposes at the present time need not exceed £8 per. acre for the best lands, and could rundown to 10s for the poorest. If all the land of the colony was properly classified doubtless the majority" of it would range under the three higher grades, for whilst there is a good deal of poor land m the country, the fertility of the soil of New Zealand as a whole, is a fact proved by it* productive power, when cultivated, either for the growing of grain and root crops or stock raising. This classification and valuation suggested refers 6<ily.to country land, and not to town land),which would be valued on its owii .merits; and taxed accordingly. The reason .!l took £7 per acre as the unimproved' value of the farm m question was 'because °I consider it xs high enough for the p'urppse required, and which 'is amply proved'if the average, unimproved value of the jand of the colony is taken at £21 p?r. acre. If £lO> per acre be "taken 'as the unimproved value for the property In' question, a* put down by Mr Purnell, such a valuation would add so enormously to 1 the generalaverage of the unimproved value that the taX could be proportionately reduced, and not increased as Mr Purnell wishes to> show us it would be, I took what I considered to be the highest reasonable value of the property m question for taxation. Sir H. Atkinson tells ÜB.\m vhis recent manifesto that the unimproved value of all the lands of the 'colony |n the last Property Tax return* is put down at £75,000,000, and deducts £33;000,000 tar Crown lands, Native lands* .reserves, &c., leaving a balance' of £42,000,00p as a bask for the Laud Tax scheme, and admits. that it is clear to the .Property Tax Department ' that the valuations between land and improvements 'have not been correctly made, and assumes that the balance is m favor, of. improvements, and not thp land, thereby reducing the value of the land further afcil^; but when we remember that this valuation was mado some three years ago, and our position as a colony is supposed to have improved yery much = since then byM'easen of our increased exports, 1 ; restore}! credit, etc., and also the, ,fcct> < which is an. open secret* .a'great many, if not thy majority,'.'of' $ie , properties are undervalued, and that tliis number it comparatively few who would part with , their properties at their own- valuation,, even with ten per cent, added, I think it may fairly be assumed that the unimproved value pf the land of the colony would conjudqrably exceed the estimate of

£42,0#,tH)6 if carefully valued by compefeent persons j but an average; tax of 1 per (ients. on the above amount wOuld bring m a revenue of £420,000, as against £355,000 now obtained under the Property Tax, and 1 per cent would be a Very small taif, when imposed upon lands classified, as suggested, according to valuq. It has been shown that an additional half-penny put on properties m the coldny over £10,000 m value,, would produce an additional £73,000 revenue. ! Now,, for. a word or two re..the Income Tax which seema to so disconce|MVlr Purnell and " Speed the Plough.'? Tito Income Tax, is to reach those who get their living and wealth from other sources than land, as it is only right they should contribute to the revenue according to their ability to do so. The Income Tax should not touch the small farmer m any case. The tax would, I presume, be levied on gross income, but the exemption m the case of the farmer should be very much larger than m the case of the man who is receiving a stated salary. | I understand m England, where there is a Land and Income "Tax (as well as,.other taxes), only.one tax is imposed on the same thing, and incomes from land are not; included m amount assessed for income, as they have already paid on the rental of the land, No one proposes to inflict the ; injustice of making a man pay twice, when he should only pay once, and " Speed the Plough's " calculation of the Income Tax m the case cited, falls to the ground, as the exemption m favor of the farmer should practically, if not altogether, do away with the tax m this case. If a Land and Income Tax were m vogue the Custom duties cojuld and ought to be greatly reduced, especially on article's of necessity, and those things we cannot make m the colony. If a farmer buys during the year £200 worth of goods for the use of his family, he pays, whether he knows it or not, about one-third of that amount for taxation ; m other words £65 'at least of his £200 has gone m Customs duties, and interest cm same, for which he haa no real value. Under the Land and Income Tax one-third of this amount might bo" saved to him and others. In reference to Mr Purneil's objection to the Land and'incoms Tax on account of its unfairness, as he puts it, with regard to different classes of investors, to my mind is no objection at all, and resolve sitself into a simple matter of adjustment. We cannot all be land owners or occupiers, . nor chii we all be money lenders. If a man chooses to lend his money on interest instead of buying land and working it, the money lent not producing so greet a result as if invested m a farm, should only be faxed according to its ability to pay. That capitalists should contribute to the revenue of the country out of tlieir earnings is only just, and right—the proportion is a'matter of adjustment. The object of the Land Tax is to distribute the njpnopoly which now exists m land, and cause ifc to pay its fair share towards. the revenue of the colony. The historian has said that "big estates ruined Italy." landed monopoly drives a lar^e percentage of the people of England into pauperism. It has been calculated that onefourth of the beople of Great Britain who live to the age of 65 fine 1. ■ their way to the workhouse. I trust the Sectors ; Will duly, consider the existing state 'of ' kffairs arid return to the House men pledged"' to .so alter m a wise and judicious manner the present state of thinps with regard to thejadministration of. ouu lands, and the iacidence of taxation, thai the existing land monopoly and all other monopolies that nre working to the detriment of the many,;and the benefit of the few, shall come td an end, so that a free, people shall enjoy what Advantages a free and splendid country like ours can bestow. In conclusion,^*, I submit that the imposition of a Land .and Ittbome Tax iff one of the best means to remedy the present unsatisfactory etate of Jiftairs m our island home. The assertion that Mr Purnoll makes as to the fanner not paying the tax on his .mortgage-is.'a fallacy so well known thafc I need hardly take up space to go into the matter. I submit that the farmers who think- for themselves know full well that they do really pay the tax, not direct to the Government, but . through the mortgagee, and a trifle over. Thanking you for your valuable space,—l am, etc., L,and Tax,