FKIDAT, JANUARY 9, 1880. THE PROPERTY ASSESSMENT ACT

Manawatu Herald, Volume II, Issue 39, 9 January 1880, Page 2

Manawatu Herald. FRIDAY, JANUARY 9, 1880. THE PROPERTY ASSESSMENT ACT.

The change in the " incidence of taxation " effected during the recent .session of Parliament, under the auspices of the Hall Ministry, marks an important epoch in the history of the Colony, and it is extremely probable that any further increase of taxation rendered necessary for Colonial purposes, will be but an extension of the principle of* the Property Tax. — not that any extension could embrace a wider range of property than that reached by the present Act ; the restrictions being extremely fan- and moderate. Any extension made will be in the form either of an all-round increase, or of a graduated scale of taxes, according to the class of property dealt with. Our views upon the matter of taxation are pronounced. We hold that taxation should be so arranged that the man avlio contributes most to the progress and development of the colony, who employs most labour, and circulates most money amongst the people, should be taxed more lightly than a man who derives a large revenue from money-lending, or capital invested in Bank or Insurance shares, or any other form which is non-pro-ductive. Holding these views, the writer asked Mr Halcombe, at his Palmerston meeting, during the recent election, "If returned, will you favor a graduated tax, so that incomes from interest might pay a larger share than those derived from the employment of capital in industries ; and so that incomes derived from actual labor might pay less than those derived from the outlay of capital merely?" At the time the question was asked, it was generally expected the increase of taxation would take the form of an income tax ; but although property has been selected as that which shall bear the burden, the question, in another form, is still appropriate. Should not property which employs lafrour, which represents skilled industry, and which circulates wages amongst the working classes, pay a lighter tax than property which returns to its proprietor a large revenue without benefiting mediately the Colony by employment of labour. Let us suppose a csae, by way of illustration. A is a capitalist and money lender, with £6000 out on mortgage, for which at 10 per cent he receives £500 per annum. To obtain this revenue he employs no assistance, and beyond the indirect good the country gains from the use of his capital, he is a "drone "in the social hive. B, on the other hand, is a sawmill proprietor, with a similar amount of money. He owns, perhaps 200 acres of land worth £10 per acre, in addition to which he possesses steam-engines, tramways, horses, and probably employs twenty hands. He falls the forest, and thus prepares the country for agricultural or pastoral purposes, giving the property an increased value ; he pays several thousand pounds each year in wages ; he supports the foundries by ordering machinery, and having it repaired ; he supports the railway by using it for haulage purposes, in conveying timber to market ; he supports the shipping industry by providing freight for transhipment ; and perhaps at the end of the year has gained only £500 — the same amount as that secured by the money-lender. The difference is striking, and our readers will see at once that the sawmiller contributes vastly more to the Colony than the money-lender. In the case of the former, the country gains literally the whole amount that passes through his hands, in addition to the £500 profit he makes ; whereas the only benefit the country derives from the latter, apart from the use of his money, is the £500 he receives as interest. Dozens of similar cases might be shown, all of which would

support tho view we take, that capital " worked " by its owner in industries should be taxed more lightly than that invested simply ou mortgage or loan. No such plan as that suggested is likely to be adopted until an extension of the Property Tax becomes necessary! as we feel certain it will, before many years. Probably the Colony will never revert to the Land Tax as a special impost upon property of that class. It was initiated as the result of a furore, and like all measures which have their origin in the cries of ultra-Radicals, it has died. Nevertheless its principle has been retained, though merged in the property tax. The object of the Clrey Government was said to bo the bursting-up of large landed estates. A tax on land remains, as well as on all other property, and is doubled, for whereas it was kl under the Grey Government, it is id under that now in office. Therefore, if a halfpenny tax would " burst up " large estates, much more will a tax of double that amount do so. Considering the constantly-increasing charges upon the Colonial revenue, and the heavy additional burdens the country has entered into, further taxation is an absolute certainty ; and .tho sooner we face that fact, and discuss the problem how to raise the largest possible sum from those who can best afford it, the better it will be for the Colony as a whole. In next issue, we propose to explain the provisions and modus opemndi of the Property Assessment Act.