The Gisborne Times. PUBLISHED EVERY MORNING. FRIDAY, SEPTEMBER 24. 1909. UNEARNED INCREMENT.

Gisborne Times, Volume XXVII, Issue 2615, 24 September 1909, Page 4

The Gisborne Times. PUBLISHED EVERY MORNING. FRIDAY, SEPTEMBER 24. 1909. UNEARNED INCREMENT.

Thai notable invention of land taxers, the ‘'unearned increment”, is taking a particularly prominent position just now in the political affairs of various communities. It represents the leading principle in the Budget proposals of the British. Government, for Mr Asquith and his Cabinet have made a determined effort to secure this portion of national wealth, as a contribution to the public purse. In Victoria at the present time the Treasurer is engaged in similar warfare against landholders, but he prefers to dub tho increment . as “people value/' But whatever name is given to it the actual significance of the term is that a certain value has been added to a holding by reason of the fact that population has moved towards .it. The assumption underlying this argument is that since a holder has the value of his land enhanced by the growth of settlement, and the building of railways, roads, and harbors to the cost of which other petsons than he have contributed, the State as therefore justly entitled to seize, by means of taxation, any part or the whole of the added value. As a matter of fact the typical Socialist will boldly subscribe to this creed in its entirety. The Victorian Treasurer did not confine this theory to efty lands. He quoted the construction of the South Gippsland railway, at a cost of £875,000, and said that this £875,000 was negligible beside the millions sterling which had been added, to the market price of Gippsland holdings. If this argument is to ho logically followed it means that the State will give preei-

OUS- little recognition to pioneering enterprise. On this point the Melbourne “Argus” iays:

Everybody knows what a task settlement in South Gippsland has been. Men went with axes into the virgin forest, to face unremiting, strenuous labor. The incentive to their effort

was the hope of substantial prosper- - ity when the work was done —a reward which the pioneer lias always been entitled to enjoy. But in the end, when the wdd acres have become valuable, along comes a Treasurer with theories of taxation, and says, “This is unearned increment; pay it over.”

It is inevitable that as taxes must he obtained from some source the owner of land must bear his share, and there should be some means of compelling a man who has amassed a fortune as the result, not of personal exertions, but of public expenditure to return to the State a reasonable portion of his gain, but at the same time the “unearned increment” theory as a basis of taxation, may easily be ridden to death. In the first place, why should it apply solely to land? All value is “people-value” in a sense. What is the value of an ounce of gold or a hale of wool if there is nobody accessible with whom the owner may make exchange? The Arictorian Treasurer, in supporting his land proposals quoted Mr Ure, Lord Advocate of Scotland. Perhaps ho forgot that Mr Ure himself was recently confronted with the very pertinent question :—“What would be the “value of the Lord Advocate on the top of a high mountain?” In its essence, as the “Argus” . points out, the doctrine of “unearned increment” declares that no man must hold land while it rises in value —that if the rise happens, the State should take possession of it. Yet it is the regular thing in all forms of business to “buy for a rise.” Is every successful speculator to surrender his profits because they are “unearned’'? In many cases, it must be remembered, the present holders of land are buyers of only yesterday, and the price they paid leaves them no such increment as they are popularly imagined to be enjoying. The buyer of land which in-

reases in market value—-whether by much or little—deserves no harsher taxation than the holder of stocks or commodities. It was the prospect of enhancement that induced 'him to make the speculation which others were not hold enough to face, and his purchase probably meant national progress at the time when be made it. The subject warrants a good deal more thought than is usually given to. it by those who always 'find the landowner the readiest target in political warfare.