THE MORTGAGE TAX.

Gisborne Times, Volume XXVII, Issue 2568, 31 July 1909, Page 2

THE MORTGAGE TAX.

r* : ‘ l ' ' - -ONDEMNEH BY THE FARMERS’ ; UNION. (Per Press Association.? * WELLINGTON, July 30. The Dominion Conference of the Farmers’ Union discussed the .mortgage tax. The subject was introduced by Mr G. C. Cooper, to. the following effect: “That this conference endorses the re--5 solution passed by the conlerence of the [ united Chambers of Commerce, to the f effect that the mortgage tax be abolishod, and that taxation on mortgages be in tho form of an income tax.” They ! all realised, said Mr Cooper, that, they \ should pay some form of taxation. In tho mortgage tax. it was distinctly taxing a man on what he owed, rather than on what he owned. Under the * ordinary land tax on exemption was allowed, but under the mortgage tax no exemption iwas granted. The borrower certainly did not directly j>ay the tax, but, as the mortgagee had to pay it, he passed it on to the mortgagor. Certainly the Advances to Settlers Act brought a lot of cheap money into the country. The mortgage tax and the cost of collection made it impossible for the private lender to compete against the Government, and a considerable amount of money had been withdrawn from investment in the country. This was having a considerable effect on the development of the Dominion. He did not mean to say that the people investing money should not pay taxation. •Take the income tax, there was exemption to £3OO, which was a distinct advantage over the case of the man holding land. A man could invest his money in other ways, and he, was exempt but as soon as lie lent money on land he was taxed. The taxation, on income should be all sufficient. In seconding' the motion, Mr John McQueen pointed out that the whole tendency of legislation had been to frighten the capitalist, who therefore demanded a greater margin on his security. He knew for a fact that capital was going out of the country. He was agent for a nephew now in London, who had written to him, asking that his properties should be realised, and the money sent Home for investment. This was not the only case in his own experience of money being withdrawn. The tax had to be borne by the farmer, who it embarrassed, as it reduced the limit of his security. One bad feature was that the Government would not accept the valuation of the Valuation Department, and they showed good sense there. (Laughter.) The Advances to Settlers. Department was useless to the farmers! It would not lend him sufficient money to pay off mortgages. 'i The remedy for the whole trouble, said Mr Lane, of Hawke's Bay, was a general income tax. Mr Leadley pointed out that if the Government did away with the mortgage tax, it would lose a large amount of revenue. How was this to he made up? He refuted the statement of an interjector that',a man would pay more under the income tax. . Mr Richards instanced the case of a woman who had only £IOOO to live on. This was invested at 5£ per cent., and the woman had to pay £1 18s out of her total revenue of about £SO a year. Under the income tax she would pay nothing, even though she had several times the amount of money invested. Mr Clothier (Canterbury) said that a 1 Canterbury man who visited Australia found that there was any amount Qf , money being lent at 4 to per cent,, but he could not get a penny for investment in New Zealand. Mr. Darcy Ulayton pointed out that it was no use asking for a tax to be taken off in one place and put on in another. They should not look at only one side of the question. Mr Matheson would vote in favor of the remit, because he did not approve of a multiplicity of taxes, but he believed that wealth should be the tax were taken off, the exemption on incomes would be reduced. Mr Cooper thought that it should not trouble them how the Government rearranged taxation. The point to remember was that the mortgage tax was driving capital out of the country. The motion was carried.