8._6

XXVI

A glance may be taken at the direct-taxation systems of the other Australian States. ' In South Australia a man owning land of the value of £500, exempt from taxation in New Zealand, would pay Jd. in the pound =£1 os. 10d. Absentees beyond the Commonwealth pay 20 per cent. more. Tf his income is £300 and derived from personal exertion (exempt in New Zealand), he will pay 4|d. in the pound on income over the exemption of £200 =£1 17s. 6d. Tf his income is from property the rate will be 9d. in the pound—that is, £3 15s. In Victoria the unimproved-value tax on land is hd. per pound : the owner of £500 will pay £1 On. 10d., as in South Australia. Income-tax is at the rate of 3d. in the pound on an income of £300 per annum, if such income be derived from personal exertion (other than income arising from live-stock, wool, meat, milk, dairy-produce, fruit, fodder, and other crops arising from land under the unimproved value of £5,000, after allowing an exemption of £150), and 6d. in the pound if arising from any other source except income from interest on Government debentures, dividends from companies, &c. A person in receipt of an income of £300 per annum, at which a New-Zealander is exempt, will pay from £1 17s. 6d. to £3 15s. In Queensland there is no land-tax except that of the Commonwealth and local authorities' rating, but income from land exempt in New Zealand is taxable, with an exemption of £200 ; above £200 it is 9d. in the pound, so that an income of £300 per annum derived from land would pay £3 15s. in taxation. On income derived from personal exertion, the first £200 is exempt, and 6d. is payable on every pound over £200. It is interesting to compare the taxation on dividends of companies in Germany with that of New Zealand. Let us suppose that in this country a company with a capital of £100,000 makes £10,000 profit and distributes £8,000 in dividends. The taxation payable will be—lncome-tax on £8,000 at Is. 2d. in the pound, £466 13s. 4d. ; annual license fee at Is. per cent., £50 : total, £516 13s. 4d. A similar company in one of the German States—say, in Duisburg, where, the local taxation is twice that levied by the Imperial Government—will pay —Income-tax on £10,000 less 3| per cent, on the capital of the company, that is £10,000-£3,500 = £6,500, £260; to the city on a £10,000 trade license at 2 per cent., £200 ; income-tax, local, 8 per cent., £800 : total, £1,260. But on the £8,000 paid in dividends income-tax lias to be paid by the recipients. The amount will depend upon the total income of each of the shareholders, as the income-tax is graduated. If they are persons in receipt of incomes of £500 per annum they will pay to the State 3 per cent. —£240 : to the local authority, 6 per cent. —£480 ; to the church, 0-45 per cent. —£36 : total, £756 : bringing the total taxes on the £10,000 to £2,056. In New Zealand incometax is not, of course, levied on dividends received from companies, the one tax at the source only being collected. We hear a lot of complaints about our land-tax. This is not high until the graduated tax becomes payable ; but it must be remembered that our graduated land-tax is not imposed for revenue purposes, but with the intention of causing closer settlement by a subdivision of large estates, which will, of course, reduce the revenue derived from the graduated tax. In New Zealand an owner of land of the value of £500 or under is, as stated, exempt from land-tax, no matter what the value of his house or other improvements thereon may be. In many other countries not only is there a tax on land of small values and all improvements thereon, but a portion of the increase in values is also claimed by the State. Thus in England the duty on increased value is a tax of 20 per cent, levied on any increase in the sitevalue. It is to be paid whenever the land is sold or let on lease for more than fourteen years, and whenever it changes hands by death. The duty is £1 for every complete £5 of increment-value. Then there is the reversion duty, which is a special form of increment-tax payable on the determination of a lease of land payable to the owner or lessor. It is £1 for every £10 of increased value. Again, there is a duty on undeveloped land at the rate of for every £1 in value. There are certain special exemptions, of course, to all these taxes, but their existence shows how much better off the landowner is in New Zealand. In Germany, on all inhabited houses and landed properties that change ownership within a period of from twenty to sixty years a State tax of 1 per cent, and a local tax of 2 per cent, must be paid on