TAXATION.

New Zealand Mail, Issue 29, 12 August 1871, Page 5

TAXATION.

[lndependent, August 10.]

The dissatisfaction in the country districts with the principle of rating to be carried out in administering the two important measures recently passed by the Provincial Council, viz., the Education and Highways Acts, seems rather on the increase. Our country correspondents have sent us reports of various district meetings, at all of which it has been most unmistakably condemned. Unfortunately, in all the speeches delivered (and we have conned them carefully') we can discover no argument which we have not already answered. The gist of their objections is that a tax upon the value of property is unfair because it is a tax upon improvements: the more valuable a man makes his property, the heavier he is assessed. Were we to accept this objection as unanswerable, we should be at our wits’ end to justify not only a property tax of any kind, but what is admitted by these objectors themselves as a perfect model of taxation—the income tax itself. A physician, for instance, begins with paying no income tax the first year because his practice affords him no income. The second year it improves, and he pays on Its value of £SOO. The third year shows a greater improvement and he pays on £IOOO, and so on. The same tax upon improvements takes place in the case of tradesmen of all sorts, including farmers. But say the objectors, there is a difference between an incometax raising money for general purposes, and an education tax to meet purely local requirements. Let us take, then, local taxation where it is fully developed, viz., in municipalities Is there a tax upon improvements here? Unquestionably there is, and the good people of Wanganui who have signed the petition for the erection of Wanganui into a Corporation under tfie Municipal Corporations Act, 1867, have solemnly declared in writing under their own hand that they desire to be taxed (if taxed at all) upon improvements! Will the rates paid into the Corporation not be rates for purely local purposes as much as the education assessment ? Can any objection be urged on this head, or indeed on any other, to the one, which will not hold as strongly against the other ? Let hut a small grocer make improvements, by adding to his building or improving it in any way, and the City Assessor will soon honor him with a visit, and express his appreciation of his industry and enterprise by assessing him at a higher figure. If this is perfectly fair and unobjectionable in the case of a small grocer, on what principle of reasoning is it unfair and objectionable in the ease of a small farmer ?

Some of these objectors pretend to have the laws of political economy on their side, and in their attempt to throw the burden of taxation unfairly upon one class, the minority in the province, actually use the names of Fawcett and Mill. Prom the report of the debates in the British Parliament on the Budget as amended after the matches fiasco, we learn Mr Fawcett’s views on the proposition to make up the deficiency by an addition to the income tax. We need not remind our ceuntry settlers that Mr Fawcett is a radical of the most advanced type, and by birth, predilection, and principles a “ man of the people.” *He occupies a prominent- position in England as a political economist and an independent thinker. He may oe credited with sincerity and honesty of conviction when the opinions he expresses run counter to and are probably unpopular with the multitude. His condemnation of the Budget, as amended by Mr Lowe, was as creditable to his sense of justice* as to his courage ; and the reasons he assigned for that condemnation deserve the serious consideration of those who entertain the opinion that there should be class-taxation as well as class-legislation, ** He protested against the Ministerial proposition because it tended to throw the whole burden of additional taxation upon one class, the minority in the country, at the bidding of the majority.. “This,” he said, “was an unjust proceeding in its financial aspect, while the principles it involved were fraught with the greatest peril to the future of the country.” How he would regard Mr Hutchison’s proposition to exempt from taxation all holdings under five acres, so as not “ to tax the hard-working and industrious settler,” may be inferred

from the following extract from his speech :—“ Is not the security and protection afforded by the state extended no less to the small than to the great landholder—to the owner of a cottage as well as to the possessor of a mansion ? Is not the privilege of peacefully pursuing his industry, of safely accumulating and uninterruptedly enjoying its fruits, guaranteed to the working-man by the Government of the day, something which possesses an appreciable value, and in return for which he is bound to contribute to the public exchequer in just the same proportion to his means as his wealthier neighbour does ? And am I to he told that no such obligation exists on the part of a numerically small class, the only distinction between the two being, perhaps, that the latter have worked harder, been more prudent and self-denying, and exercised a greater amount of energy, sagacity, and forethought than the former?” The objection to the rating in the Education Act, so far as we have seen, does not hang upon the fact that that act is of a provincial character ; for supposing the new education act brought forward by the General Government imposed an education tax upon the whole colony assessable on the same principle, our settlers at Wanganui, Marton, and Wairarapa would, if consistent, oppose it with equal virulence. The expense of providing an educational system for the colony would be an exceptional expenditure, and if the burden were to fall on one section of landowners and house-owners it would be as unfair as Mr Lowe’s proposition, which Mr Fawcett so ably condemned. Nor is this all. As in things evil the cause is greater than the evil of which it is the cause, so the effect of this unjust principle, if acted on, would be that the multitude would cry out for government expendiiure on education, and if for it then for other things perhaps equally desirable, knowing that they would escape their fair share of the burden of taxation required for these purposes. Mr Fawcett, who has both by his pen and votes supported every truly liberal measure, very forcibly, points out the e\ils likely to ensue. “ If,” said he, “ all exceptional expenditure should be thrown on the income tax, they would encourage the democracy in every town tO’demand money from the Government, which would be called exceptional expenditure. One or two millions would be asked for state emigration ; and how could the demand be resisted when the expenditure was thrown entirely on the minority. Then, again, an assembly of working men might call out, contrary to all the principles of political economy—and when he had the opportunity he did not hesitate to say that such a proposal was contrary to all those principles—that work to the unemployed .should be supplied by the Government.” ®lf such objections lie against an income tax, with how much more force can they be urged against a uniform acreage rate ! We think our country settlers should calmly reconsider the question, and ask themselves how it is fair to put a tax on improvements in Wellington and Wanganui, and unfair to do so in Rangitikei and the Hutt? They may further ask, what the principles they now advocate would lead them to if fully' carried out. Are they prepared to assert that it is consistent with justice and equity to exempt a class from its fair share of the public burdens because that class happens to be a large numerical majority, and, from the franchise they enjoy, possess a preponderance of political power ?