[A. EELS.

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ascertained in order to be added to the total of unimproved value held by us on either lease eir freehold. We can hardly believe that such results were intended by the Legislature, and we certainly think that section 52 of the Act should be abolished or be made inapplicable to town lands, because it sets a premium on inactivity and stagnation. We also believe (though we have nei statistics on the subject) that this section of the Act affects town property more than rural property, because to a very large extent rural lands are held on lease either from the Crown or from some public, Board or body, none of which are subject to taxation, and as a consequence this section does neit apply. Another matter to which we wish to draw attention is the question of a lessee's interest in freeholds. This is purely a device for raising taxes. We contend that if a lessee's rental is below 5 per cent, of to-day's unimproved value of the property leased by him this should not be made a reason for saddling the lessee with land-tax by giving him an interest in such unimproved value, and. at the same time relieve the actual owner of tax to that extent. An aeivantageous lease must necessarily be reflected in higher profits and therefore in increased income-tax, which should be sufficient. Whilst on this subject we would like to point to the fallacy that we can pass on taxation to the consumer. This cannot be done, because prices are regulated by competition. The one-property business —particularly if the property occupied is only leasehold — be such business large or small, is either not burdened by graduated land-tax or only so to a very negligible extent, and therefore can and frequently does undersell the business which of necessity must own or lease a number of properties. We also wish to combat the idea that large concerns can easily stand heavy taxation. This is not so, nor is it just or equitable that because of their organization they shoulel be singled out and penalized. We beg to suggest, th.reforc, that land-tax on town properties should be abolished, especially as business concerns owning such properties also pay incometax, and are, besides, bureiened by very heavy municipal rates. It is hardly fair that town properties should also pay seven-sixteenths of the total land-tax, which we understand is the proportion of tax yielded by them. It seems to us that if land-tax were abolished altogether it would not be, a serious matter, as it amounted last year to less than £1,500,000, which is a comparatively small item in the revenue of the Dominion. Mr. Hunt.] In making up your land and income tax return I take it that you pay land-tax on your interest in the freeholds and leaseholds ? —Yes. In making up> your income-tax return you deduct 5 per cent, of the capital value of these: properties, do you not ? —Quite so. So you do not pay income-tax on that 5 per cent. ? —No. Have you worked it out to see whether you would be better off by paying income-tax only on the whole amount or land-tax on a portion and income-tax on a portion ? —No, I have not worked that out. lam not sure of the position. I coulel not answer that offhand. Would it not mean this : that if you had no land-tax to pay you would have to pay income-tax on the whole income ?—You mean I would not have the 5 per cent, deduction ? Yes, you would not have the 5 per cent, deduction ? —That is quite true. But let me put it in this way : suppose we had no freehold property and had only leasehold properties, then we would be entitled to deduct from our taxable income the rental we pay. Yes ; but you would have the capital that you now have in freehold properties in use in your business earning somewhere else, would you not ?—That is quite right. I was just wondering if you had worked it out to see which way you would be better off ? —I have not done so. It would take some calculating. In your statement you say : " Whilst on this subject we would like to point to the'fallacy that we can pass on taxation to the consumer. This cannot be done, because prices are regulated by competition." Your business is a retail business, is it not ? —lt is retail, wholesale, and manufacturing. I mean, a large section of your business is retail business ? —Yes. And in that retail business you are in competition with, the small trader who has only a small rate of income-tax to pay ?—Yes. It is the competition of the small trade that prevents you from passing the taxation on ? —lt is not only the small trader. The one-property business is considerably less burdened. The small trader with one property has a much smaller tax ? —Even if he is in a fairly large way, if he has only one property it is not such an important matter, particularly if it is only a leasehold property. Your point is that the competition that prevents your passing on the tax is the competition of the man who piays less tax than you do ? —Yes. Mr. Not necessarily. You do not say it is the small man entirely that you have to compete: with ? No ; that is quite right. But our business is probably exceptional in this way : that it is comprised of a number of retail branches. Mr. Hunt.] I will put it in this way :if all your competitors were taxed as heavily as you are and nobody could buy anything from people that were taxed lighter than you are, then you might pass on the tax ? —That might follow, but not necessarily. If every one was taxed at the same rate and nobody could buy from a pierson in competition with you who was taxed at a. lower rate, you think it might be possible to pass on the tax ? —lt might, yes. It cannot be the case as things are at present. No, because you are competing with lightly taxed people ?—Yes. Mr. Shirtcliffe.] On that question of the passing-on of tax, assuming that all traders could be on the same footing as regards taxation and other conditions of trade, under present conditions do you find it possible to add on to your costs so much per cent, for taxation, and then fix your selling-price accordingly ?-—-No, we do not. Tn fixing your selling-price in competition with others, do you ignore the question of taxation altogether ? —Completely,

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