DEATH DUTIES.

Dominion, Volume 2, Issue 566, 22 July 1909, Page 6

DEATH DUTIES.

DR. FINDLAY'S MEETING. , (By. Telegraph—Press Association.) Dunedln, July 21. The Hon. Dr. Fin'dlay addressed a large meeting at tho Burns Hall to-night, and was accorded an excellent hearing. Speaking of the unemployed problem, the speaker remarked that it must bo attacked in a scientific and proper way,, and it could be attacked indirectly by something like a radical cure, which a competent authority had set out..: - That six methods of cure were as follow:—(1) ' Improved education, technical and manual; (2) restrictions upon drink and gambling; (3) trade organisations should help the Government by keeping a watchful ,, eye over the labour market, and helping'the-ir men to find employment; (4) State bureaux where employer and worker could enteritheir names; (5) reform of taxation; and (6) ■ land settlement in order to chock tho exodus from the country into tho cities. In dealing with tho subject of death duties, the, Minister said:—"Death duties may servo two purposes: (a) revenue to tho Stato; and (b); distribution of 'wealth. ' Tho purposes may be served jointly or separately, and the law imposing the duty may be devised so as to both induce division of wealth in. deceased estates, and," at tho same timo, produce revenue for tlio Exchequer. . It may, in other words, provide at the same' time for tax and inducement to tho limitation of inheritances. Both these purposes should be aimed at by Government. Wβ hear much ofn tho evil done by charity organisations to beggars, of effect of doles to the poor, that money given without being m some way worked for is a premium for idleness and so on, but we do'not hear so much ■of the influence upon those who take by boquest'•. or. inheritance a .fortune, which they .have in r.o way earned, a fortuno whoso amount enables the receiver, to "livo for the rest of his life as what is called 'an independent gentleman, , such independence being- chiefly conspicuous in relation to work or useful occupation of any; kind. In most cases 1 where wealth places a man, who has the health, strength, and capacity to -earn a livelihood, beyond all need throughout life of making his own living, such wealth is apt to be a curse. "Now I come to the law of New Zealand .to-day. First let me deal with the defects of our-^system—the scalo of death duties in New Zealand to-day. There is no uniform graduation of rate. ; For example, for' £100 to £1000, the duty is 2J per cent.; £1000 t0.£5000,;3i per cent.; £5000 to £20,000, 7 per cent..; £20,000,' 10 per, cent.; strangers in blood, 3' per cent, extra. Thus, an estate of £5000_pays £175, and an estate of £5001 pays £350.. Graduation should proceed on uniform lines' on a. slowly ascending scale, like the graduated land tax,-with a surtax on the share taken by any one individual when it exceeds a certain amount. The limit of 'exemption is too low, viz.,. £100. Why should the State-tax, a sum of £500, which a poor man has saved ■,for tho _support of -his children? ,• Remote relatives, , such as second '-cousins, should bo taxed like strangers . in : blood. . There seems no reason why, after a certain degree'of reinbtanes's, the claim of/the Stafe to the whole property of an intestate, should not prevail over,that of absentee relatives.'

"IDio exemption of cnarrtaWe gifts is in a very unsatisfactory condition, and it is the subject of constant 'uncertainty , and litigation. 'The preoiso .nature of a charitable gift-should', be defined iy. legislation. The total exemption.of husband and wife from all duty, however large the estite, is: indefensible, and - .the gi'fCduty provisions' are ineffeotive. No such duty is' imposed unless t'he gift, is made by. deed or other written instrument. • Thcro is nothing therefore to;prevent a man (as-indeed is often done) giving' v away a'largo estate to children, relatives, or strangers in blood, shortly oefore his 'death, u ho does so by ,gifts of money, or-other property requiring. for '-.transfer no instruments, in. writing.;; \Mueh property..escapes taxation on the death of dece3sed>simply beqause it does not vest in the executorr-e g enteiled estate property over i/hkh. deceased 1 a ,ef, n «. ral . P° we r of apppintment; property held in joint, ownership , and surviving to other'joint' 'owner or owners'; -insuranco policies in the names of relatives, but maintained, by premiums paid' by deceased. Out Act .combines in itself and- includes in a single form of taxation two entirely distinct principle of',estate duty and legacy duty. This-combination of the two taxes is an attempt to combine two inconsistent principles of taxation, and some provi- ? 10n -should ;be made that where property is left or parses on'-intestacy te persons other than near; relatives, the wealth which these, persons already own should bo first ascertained and, if they aro already wealthy an additaonal rate should be imposed on the value of the property so,left, or passing to them. ■-./'-., .. v.-

, After quoting figures to show the comparison, between the New Zealand lav and death duties legislation which has been in force in England for the. last fiftten years, and the I'inance BUI now before the House of Cbmm«nf. tne Minister, proceeded as follows:-- _ , Now., let us see upon what wealth our death duties; operate, and what ,duty we get. ' I had . a return ' prepared .' to show these amounts. The total. number of deceased estates on-which-duty was paid during the ;last fifteen years in New Zealand (these do not include any • going wholly to husband or wife, as no duty is payable and no accounts.are filed) was 18.925. The total value of such.estates was £45,057',193. The total value of estates. going wholly to husband or wife (estimated on examined figures and returns by the Tax Commissioner) was £6,000,000. The total'duty paid on all estates was £1,860,840.- The number (a) and total value (b)--.of all fsta'tes of £100,000 and upwards during the. past fifteen years (not including any going, wholly, to hushand or wife)-were:--(a)/30; awl (b) -. The total duty paid thereon was £329.123. The tetal number (c) and value (d) of all estates 0f.£10,000 and upwards, during the last fifteen years, (not including those going wholly to 'husband or ! wife) were:—(c) 740; (d) The total duty,; .paid thereon - was £1,376,819. Ihus the total amount of wealth passing on the death of owners during the last fifteen years wa,s £51,057,193, and the duty paid was £1,860,840, or £3.8 per cent.' of the total value of the. estates. Of estates over £100,000 .(other than any left wholly to husband or wife) there were 30, of a total value of £5,820,908, .on which the paid was £329,123, or siper ; .cent. of the total value of the estates. Jistates of £10,000 and upwards (exclusive of those going wholly to husband or wife) wore valued at. £24,993,100, and the duty paid was £1,376,819; the rate being a very small fraction over £3 per cent. On totaj value, no doubt,, if estates going to. wife or husband were'included,. the rate would-bo reduced. •« '

."I hare no hesitation in saying. that these death ;duties on large,, estates should be substantially. increased, < I have indicated thp mam defects of our system. At present it bears too heavily on the smallest estates, taxing those of over £100 in amount. The burden should be lightened on the smaller estates, but increased to areasonablc extent on the larger ones. If this 'ie done, "and other amendments made, I propose that wo shall achieve two thisgs :—(1) increase our annual revenue substantially, and (2) induce a wider division or distribution of wealth: Both purposes are. worthy of our best consideration.. The Government has not yet decided what, shape , its now death duty proposals will take, but it will bo remembered that the Prime. Minister in, his policy speech at Invercargill declared that a revision/of tho Death Duties Act, and an increase of doath duties were part of tlie Government's immediate programme, and' he indicated in soiho broad outlines the direction in which he proposed amendments should proceed.'.' At the close of. his address Dr. Eindlay was accorded a very hearty rote of thanks on the motion of Sir James Mills, seconded by Mr. D. M'Pherson.