A PROPERTY TAX.

New Zealand Mail, Issue 23, 1 July 1871, Page 11

A PROPERTY TAX.

This subject has been engaging the earnest attention of the people, press, and Parliament of Victoria. The discussion originated in a proposal of the Government to impose a tax of 6d in the £ on all the rateable property of the colony—to be paid by the actual owner and not by the tenant. The impost was opposed by the freetraders, and supported by the Ministerialists. Why not, said the former, levy a tex upon income, or increase the duty now levied on tea and sugar ? To whom the Chief Secretary, Sir James M'Culloch, replied, " that he should like to go in for a tax on all kinds of property, and also upon incomes." He believed that the adoption of the principle would be the thin end of the wedge, by which, in the course of a comparatively short period of time, a large amount of the taxation of the country would be borne by p.operty and income. The impost is ably supporled by the " Argus," as one consonant with the principles of justice and equity, which ought to be the basis of all legislation, financial and otherwise. At first sight it appears strange that this subject has scarcely been even incidentally referred to by the press of this colony; but it may perhar a be accounted for by the circumstance that it has not yet become one of those questions which make and unmake administrations; whilst it is probably felt that, as the colony has got quite as much taxation, with its present population, as it can well bear, the subject can be conveniently postponed until a more favorable opportunity. "Sufficient for the day is the evil thereof." But it is strange that those who profess such an unqualified admiration of the principles of free trade, and of the present fiscal and commercial policy of England, should so strongly object to the imposition of direct taxes, by which alone duties on imports can be abolished, and the principles of free trade established. The Victorian freetraders are not singular in this respect ; as those of New South Wales and New Zealand are tarred with the same brush. In New South Wales the Ministry, in opposition to their long held and most cherished views, and to the serious injury of the commercial interests of the city and port of Sydney, have been constrained to increase the duties on almost almost all imports expressly, and solely, because the ruling classes in that colony could not consent to the imposition of a property tax. With all their talk about the advantages of free ports, and free imports, they preferred a heavy tax on imported commodities to a light tax on real estate. Not because they loved the former more, but because they loved the latter less. But history testifies that no sacrifices are ever voluntarily made by privileged orders except to prevent still greater sacrifices being insisted tipor,

A property tax is one of those imposts which fulfils more than any other the four conditions laid down by Adam Smith. That the subjects of every state ought to contribute to the support of the Government as nearly as possible in proportion to their respective abilities ; that the tax which an individual is bound to pay ought to be certain and not arbitrary ; that every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributors to pay it; and that it should it subject to as little diminution as possible while in process of collection and transmission to tho public treasury. But there is another aspect to this question which has been placed in a striking light by an eminent livirigeconomist. He observes :—' Tho ordinary progress of a society which increases in wealth, is at. all times tending to augment the incomes of landlords ; to give them both a greater proportion of the wealth of the community, independently of any trouble or outlay incurred by themselves. They grow richer, as it were, in their sleep, without working, risking or economising.' If this, says the "Argus," to whom we are indebted for this quotation, is true of property-owners in old countries, it is still more true .of the same class in new countries, where the national increasement of value is much more rapid, and is assisted, to a considerable extent, by the usua lavish expenditure of money on public works by the Government. These observations, it will be conceded, possess still more point and force when applied to property-owners in this colony, by reason of the immigration and public works policy of the Ministry, which cannot fail to enormously enhance, by means of the public credit and public purse, the value of all realised property. The liabilities the colony will incur for these works and undertakings ought, at least in part, to be borne by that description of property which will be so largely benefitted by their prosecution. But we are convinced that no such tax will be imposed, or be willingly borne if imposed, so long as it is believed that the cost of government and the maintenance of the public credit can be sustained by indirect taxes ; and we are equally convinced that unfil direct taxes become the rule, instead of the exceptions, one of the strongest guarantees for good government—one of the best safeguards against official extravagance, jobbeiy, and corruption—one of the safest antidotes against popular ignoranee and political apathy—will remain unsupplied. Long before the financial policy of the present Ministry was made known, it was pointed out in the leading columns of the Independent that " the great difficulty does not lie in borrowing the money, for money is plentiful at home and seeking investment; the ultimate prosperity of New Zealand is not questioned, and the income of the colony should increase in proportion to the expenditure. It is in the expenditure of the money when obtained that success or failure will rest. Borrowed money is too often carelessly spent, and it is no easy task to provide such checks as would guarantee to the English creditor that the outlay of his capital would be reproductive. How to execute this task is the problem which should occupy the minds of the Ministers in recess, so as to enable them to present to the Legislature, and if need be to the country, a well-digested scheme." Mr Vogel's success proved the accuracy of the first portion of this extract ; and wo submit that the checks referred to in the latter part of it would be effectually supplied by the imposition of a property tax. But, irrespective of these important considerations, without any reference to the maxims of the economists—leaving out of sight the principles of protection on the one hf-ml, and those of free trade on the other—it would be no difficult matter to show that at no distant date such a tax will be necessary for the maintenance of, as it cannot fail to be in the highest degree beneficial to, our public credit and the general prosperity, as we probably shall do in a future article.