WHO PAYS THE MORE?

Auckland Star, Volume LX, Issue 228, 26 September 1929, Page 11

WHO PAYS THE MORE?

TOWN OR COUNTRY OWNERS?

TAXING THE LANDLORD,

SHOULD LAW BE UNIFORM?

(By Tflegrapb.—Parliamentary Reporter.) WELLINGTON, this day. Contrasting the. taxation obligations of the country and the city landowner, a Reform member and a Labour member, found themselves somewhat in agreement during the debate on {he Govern-: ment's taxation proposals. Mr. W. Downie Stewart (Dunedin West) said it was argued that the city man was subject to two taxes, while the country man paid one. The application of the , graduated tax had certainly j penalised businesses which had a number of-sites in various cities. To that extent it was inequitable, but if taxation was aimed at the evil of landlordism in the city, then the law in both town and country should be the same, though at present city lands were subject to a 5 per cent deduction.

The Labour View. Mr. M. .J. Savage (Auckland "West), who followed Mr. Stewart as the first Labour speaker, elaborated the principle that there should be a uniform system of taxation, applicable to all incomes, whether their source was in town or country. The owners of large city properties should not escape. The first part of the bill, dealing with the special land tax, commended itself to those who desired closer settlement, and it could also be approved in that it gave effect to the principle that revenue should be contributed on the basis of placing the burden on those best able to bear it. In past times the Labour party had advocated placing the burden of taxation on those best able to pay, but the party had stood alone. Mr. W. E. Parry (Auckland Central): Very much alone.

Mr. Savage reiterated his statement of 1925, tliat it seemed unfair that the city man should have to pay on £50, while the farmer, after paying the whole of his tax, still had £10,000 clear of taxation, simply because his income was derived from land. It now appeared that the man in the country was complaining that the larger share of income tax was being imposed on him, while it missed the man in the city. There was something to be said for that argument in its application to big city landlords. The city landlord was a reality, he might have property of an unimproved valuation of £30,000, and derive there from £7000 net income. Compare his position with that of the country land lord with an exactly similar valuation and income. Mr. Downie Stewart: Yes, but the city landlord can rack-rent his tenants, whereas the country landlord ha 6 no tenants.

Mr. Savage: I have not finished my i story. The gentleman in the city may j be a landlord with £30,000 unimproved j valuation and an income of £7000, and he may go on adding to it. How long is that to continue without applying to him the remedy which is proposed to be applied to the man in the country? This bill applies to the landlord in the country, and for the first reason that it is designed to make land available for closer settlement I'm in agreement with it. Secondly, it may be said to be legitimate because it is framed to deal | with the man with a valuation that is not a small one. He is best able to bear , the burden. j "Deal with Both Classes." j "When we get to grips with the question of closer settlement we find there if something to be said for the point mad; by the member for Dunedin West," continued Mr. Savage. "The large country landowner and the large city landlord are both standing between individuals and their means of earning a livelihood, j For that reason both classes should be j subject to legislation." | Large Families Bear Burden. ! Mr. Savage regretted that the £5000 mortgage exemption at first proposed had been shifted to an exemption of £7500. It was a pity that was done, because people who dealt in figures of that sizo were better able to bear the burden than people with large families and small wages. It could not be denied that large families bore the major share of indirect taxation. Far too much revenue was raised by indirect taxation and too little by direct taxation. It, seemed that a beginning was for ever j being made at the bottom end of the social scale, instead of at the top. There were graduations, of course, but the trouble Mas they did not cut deep enough. Although a seeming impossibility in this enlightened twentieth century, it was still a reality that the landed proprietor could get away with £10,000 of his income free of tax, while the struggling man had to pay up to the hilt In conclusion, Mr. Savage said he had little faith in the hardship clause, because previous experience had shown such clauses were not always adminis- , tered. !