13.—5.

120

JW. H. NICHOLSON.

the tax paid : North Canterbury, increase in land-tax, local rates, and labour account —these figures are taken from as representative: a set of sheepowners as I could rake up. There is a fairly large one at the start; that is a leasehold property. His land-tax is £150, and his total labour account was £4,034 17s. in 1913-14. His total increase was £1,987 JBs., which requires a lot of making-up. But you need to take into account the increase in wool-prices. You have put before, us the concrete figures showing the, increase: in taxation, but you do not attempt to show us his increased returns owing to higher prices for wool, These figures by themselves show clearly enough the; increase in taxation, but they dei not show the; other point ? —They are drawn up with that object. I showed the; increase of taxation. But all sections of the community have had to pay increased taxation ?—-Quite so. Commercial undertakings have had to pay increased taxation, probably quite in proportion to those figures for farmers which you have submitted ? —Quite so. So I suggest that to give to the: Commission a proper comprehension of the position as affecting sheepowners these figure's sheiulel be added to by figures to show what the net results were: in these particular instances ? —You mean that it would require complete balance-sheets. If a farmer could pay the increased taxation and still make as good a rate, of profit as before the war he was not suffering any great hardship ?-- 1 agree with that, but that was not the, e:ase. There is an individual case on page 12 of my statement, showing the land-tax and the increase from 1914 tei 1921. It also shows the man's wool returns for 1914 as £1,445, and for 1921-22 only £761, or one-half eif what he got in 1914. His taxation had increased from £214 in 1914 to £773 in 1922. But 1922 was a slum]) ye:ar ? —But if you doubled those figures yen elei not bring that man up to where he, was in 1914, with his increased taxatiem on top of it. From 1914 onwards that man must have hael a pretty good time during 1916, 1917, and onwards till 1920 ? —You could average that up right through. His 1914 clip would be solel in 1915. Yen could e:heck each year through ; with the increase of taxation a man was not really as well off before, the slump as he was under average conditions. But surely, with the same amount of wool, in subsequent years to 1915 h;: would really get much more than £1,445 ? —But that is the: 1914-15 clip. That would give you an idea that if you carried it through on the basis shown in my statement, that man has had one-half his wool clip taken in increased taxation. Henry Dyke Aot.anp examined. The Chairman.] You are President of the Sheepowners' Federation, Mr. Acland ?■—Yes. I understand yeiu have: prepared a memorandum setting forth the views of the feeleratiein in regard to taxation? No; this represents my own vie:ws. Mr. Nicholson has already given the Commission the view of the- Federation. This statement is based on my experience as president of the Federation, and also on my professional experience. My statement is as follows: — My experience, both as president of the Sheepeiwners' Federation and professionally, geies to show that the- graduated land-tax has been a very onereius burden on farmers generally. This has been especially so in recent years, when farmers as a body have been losing money. It, has made it extremely difficult for them as a eiass to obtain credit. In the case of mortgaged lanel it means double taxation for a particular form of capital. Its effect has been to make the Commissioner of Taxes first mortgagee, and the erroneously called first mortgagee is in the position of a second mortgagee who has given a personal guarantee, to the first mortgagee, the Commissioner eif Taxes, tei pay the tax. I know eif several cases where the Commissioner has exercised this right. 1 kneiw of a case where, if the Commissioner enforces his right at, the present time, it means that the, farmer in question who only has a small block-—will be sold up. To be fair a e:apital-tax such as the, lanel-tax shoulel extend to every form of capital or else be abolished. Personally, I believe the fairest tax is the income-tax. If a capital-tax such as the land-tax were imposed upon companies and other forms of capital I believe- it weiuld have the: effect of putting most of them out of business. 1 entirely concur with what Mr. G. Gould saiel with reference: to joint ownership, anel 1 can, if necessary, give, confidentially, e-,ase;s eif the injustice eif the system of graduated tax in respect of joint ownership. In regard to the tax upon companies 1 do not believe that this is passed on as often as people suppose, and it is paid for in many cases out eif what are called " hidden reserves." The company-tax also has this advantage. : that it is likely to prevent the growth of very large financial corporations, which, in America have tended to become predatory. If the: company-tax is removed all ineiivieluals on salary, and professional men, merchants, and traders generally, will probably have to submit to a very much larger taxation than they pay at the present time, and esompany-taxation is collected on the profits made by capital. It has been contended that persons who have saved money and invested it should not be liable: to income-tax unless their income exceeds £300 per annum. It seems to me that such investors get all the benefits of a civilized society anel protection for themselves and their capital, anel that such undoubtedly should contribute to the revenue. Furthermore, if companies are exempted from taxation they will simply be added to the, list of what I have; on a former occasion called "the aristocracy. of capital" existing in New Zealand, which is, firstly, the. Government tax-free war loan, anel, secondly, local-body debentures. I believe also that the exemption of companies will make it mere difficult, than ever for farmers to obtain finance. Your suggestion is that there should be no exemption from income-tax ?— No ; there must be an exemption. Take the case of a man who has saved a certain amount of money, and who at the present time, has £300 a year coming in from company dividends : if that were exempited he would pay nothing at all. On the other hand, you might have, this positiein : a man with, we will say. £12,000 puts half eif it in his own name and half in the name of his wife, and they have, £600 a year between them. They have a house, but pay no tax. On the other hand, again, you have a lankmanager or a small trader weirking very hard anel earning the same amount eif money, and he has got