THE HOUSE.

Dominion, Volume 3, Issue 651, 30 October 1909, Page 6

THE HOUSE.

" LAND TAX AND INCOME TAX BILL. THE MORTGAGE TAX DISCUSSED. < Tho Housa'Diet at 2 80 pm The v PBIME MJNISTEE, in moving the scc- ' end reading of the Land lax and Income Tax Bill, aaked'that the-Bill should be allowed to .go through?all stages that day It was Hhe ofdinaryißill, with one exception, that it t (•provided for-the 25 <per.*cenr morcaie m the higher stages of the graduated tax which was islready provided for by law Hr MASSEY said he'had no objection to 3ettine~the Bill "go thTough i in* one day 4n amendment of tho law was required however, an connection with tho mortgage tax, which was having a very bad effect on tho country 'The amount collected wa> small, and at first eight it might,appear that the tax was m ' significant, being only Jd in the £ on capital invested, but investors looked at jUas, a tax not 60 much on capital invested as' on income 'When money was dear or scarce, as ' ilKuhbeen the case Intel}, tho mortgagee parsed ( on'tho tax to the mortgagor, and >if the investor lived outside the country, and could not v pass it on, he withdrew his money from the country., ifrMasJey urged that he was really \ speaking interests ot the borrower/ He , did not suggest that thisCnfoney ishould *s. capo (taxation, but he suggested that instead of * the "mortgage tax the incorao tax should apply ' If thoyidid away with tho mortgage tax, he 1 believed that it would lower tho late of interest on'monej to the borrowers in this i l country. He urgedJ that tho Government , Bhonld do away with the mortgage tax and i> -, replace it by tho ordinary operation of the wcomo taxi v, » \ 1 ~,..», Jfr. HEERIES asked'what it was estimated the increase of revenue would be from tho extra 25 por cent , i Sir Joseph Ward In Reply The PRIME MINISTER said that later on ' proposals would be made that would give members an opportunity of fully discussing tho taxation ofnhe country generally Tho same man who'pays tho 'graduated tax is the man -who pays tho mortgage tax m three -cases out lof five t Afr Massey No, he is not V r~T 7 i" r >The Pnrao Minister Ybii Bay he passes it 1 en to Someone elso's shoulders I say an arL ~ tanboment should be made te stop that If tho I mortgage tax was removed all the large land i owner had to do was to got a-mortgago on his i land, and he would escape tho graduated ta\ae tion altogether If they removed tho mort"ago ,l. tax they, would'put it on~in"sbmo other form, I and attach it to land It was estimated that . tno extra 25 por cent would produce an in- \ crease of revenue 0f>.£25,000 per annum 1 Mr. Massey Astonished. „„.„.,*,, , rt ~ „ S Mr MASSEtrspeaking'"on tho .motion for the k third rea&pg expressed astonishment at this I * "extraordinary statement of opinions"- In sug5. geshng thcC abolition of tho mortgage fax, or j rather that it should *bc calculated "as income r tax, he (Mll Massey) had .made no attempt to suggest tb.45 any property in the form of money I or otherwise shoula, e»capo its, fair share of taxation ;The man who paid graduated tax was tho man on tho land, the nominal owner of the land, "nd the man who paid mortgago tax was tho man'who had lent the money to the man ori tho land. Ho (thought the Prune 1 Minister had meant Ito say I, that if thoy exempted mortgages they would get no graduated tax, and that might bd possible But if they did what he suggested, / abolish stho mortgage taxiand let income be taxed by way of income tax, it would not make ono farthing difference to the graduated tax Ho suggested that tho Prime Minister Bhonld refer the question to the Public Accounts Committee,, and he would be quite prepared to abide by their decision. Other Speakers t ",. , ' Mr PHASER «(Wakatinu) said the Premier appai'entlj" misunderstood the 1 position. Ho quoted the' Act to show that a man who paia\ graduated tax could not deduct from his land' valuo one single penny of the mortgage exr ccuted Ho also pointed out that the land--1 owners weto not the only ( people who lent t money The bulk of the money was lent bv the bink« " y and other coHip'anjes7 And tbo lender in times of dear money would pass { the aoitgage tax on. to the borrower. Ai_ a 5

-rule'-in.-New Zealand the' man; who 'paid "the mortgage tax was the'borrower. .'',■ ', ; :Mr. ELL (Ch'ristohuroh South) said he had objected/to'the ..reduction, of the mortgage'■ tax,:wliioh:lad.cost,the colony''^26B,ooo:in revenue. The mortgage tax ~was not coming- out' of the srnalb settler.- .(Laughter;)' ,■.'■' ; -.-'-'. ','" ';:, Mr;'-;. J AMES--ALLEN (Bruce) dsb/controverted ;.thb. "extraordinary opinions" .by;tbe Prime Minister. .He could not understand:, what., Sir -'Joseph- Ward vitis : driving at. A/man paid-graduated land, tax on the. full value .of.nis land,' quite apart from, the amount ofvmprtgages. -,/' ;•..'...'.: ■'.:. ■ ■■';,■■ ~'-..!'-V:."';.S'.'■ -■.•.'-.'

The Prime: MinistorV Statement. ' ■..'-', ! still .maintained' his-state-moiit ,tHat the abolition of the mortgage. tax would :ihean an'.evasion.'of-.the.graduated land fax. 1 ..'lf they removed the- formor all ,the man who .was paying 'the latter- had to.do was-to' divide: his; estate.'and take: a :mortgago over it. He' could- effect; a / transfer • to the members of his.' own?-famjly, : and'then take' a mortgage over'-..the; different ; sections. .' Mr." Ma'ssey: You are quite wrong,' It. would. notaffect'it a'.'bit.' ...'" ""'. •The .Premier:'l know of instances-where it ha 9■! been : ' done, and it is absolutely essential that' a high' graduated taxation should exist in this,country.'■'.'-"" - 1 ■" ' ;' The third • reading.of the Bill, was agreed ,to.