The New Zealand Times. (PUBLISHED DAILY.) TUESDAY, AUGUST 21, 1877.

New Zealand Times, Volume XXXII, Issue 5120, 21 August 1877, Page 2

The New Zealand Times. (PUBLISHED DAILY.) TUESDAY, AUGUST 21, 1877.

The subject of the incidence of taxation is is not one to be dealt with in a hurry. It has troubled Legislative Assemblies all over the world, and is likely to trouble them in the future. Although in other British communities the principle of direct taxation—and that is the main feature of the motion now being discussed in the House of Representatives—has been partially affirmed, it is only yet in an experimental stage. The English people have never taken kindly to the system, and it is a matter for speculation how far the Liberal party in the mother country owes its defeat and lengthened retirement from office to the income and property tax. There is one thing tolerably certain, England is not likely to take another advance in this direction for some time to come. Political economists are well agreed that the principle ofdirect taxation is sound and equitable; but it is curious to note that in this particular political economy and advanced civilisation do not go hand in hand. Great Britain, Prance, the United States, and Switzerland raise their revenues mainly by indirect taxation. On the other hand, Russia, Turkey, and Spain resort to direct taxes. The former countries are rich and flourishing, and their names stand high in the money markets of the world ; the latter are bankrupt, and their credit is correspondingly low. It is not argued that direct taxation is responsible for this state of things, but it tends to show that direct taxes are only resorted to in countries where the people have little or no voice in their incidence, and where the necessities of the State are admittedly pressing; Political economists may thoroughly and logically demonstrate that the best method of taxation—the only one that could be fixed with equitable regard to the capabilities of the taxpayer—is a direct one; but put the system in force, and it will be be found to jar with the feelings and inclinations of the people. Let us take the fee on a miner’s right, for instance. That was a direct tax, and one for which the miner received in return something tangible—a special right to take and hold land, in the possession of which his title has been declared better than a Crown grant. Yet we have known of no tax in this or the neighboring colonies which has met with stronger condemnation from the payer. Alongside that tax was the the gold duty of half-a-crown an ounce. Calculating that the labor of the miner brought to light thirty ounces of the precious metal per annum it would make his contribution to the revenue £3lss. a year. The last was an indirect tax, the banks clearing the Customs, and of course paying so much less for the gold. Now, we write with considerable experience on this matter when we state that the miner felt the £1 fee on his right a greater grievance than the £3 15s. he paid as gold duty. The one was a direct and the other was an indirect tax. It was the bank which agitated the reduction of the gold duty; it was the miner himself who agitated the abolition or reduction of the fee on miners’ rights. The above will help to show that there are difficulties surrounding the question now under discussion, and that very grave consideration will require 'to be given to the matter if the method is to work smoothly. If it clashes with the inclinations and prejudices of any numerous body in the' colony, the discontent it would engender would more than counterbalance the gain in any other direction.

The subject is not to be matured in a day J or two. It has been mentioned that the question of direct taxation has now and then cropped up during the past few years; but the attention given to it has been of a very desultory, character— not much talk, and apparently less thought. The subject is a big one, as large and involved as any to which the Parliament of this colony has ever devoted its attention, and time wonld not be lost, and the interests of the country would be best served, if members were to devote twelve months’ quiet study to the question ; not altogether to what has been done in other countries, but to the circumstances of the colony and the condition of colonists in the present, and to what may take place in the future. Mr. Woolcock’s motion has already been productive of good, inasmuch as it has been clearly shown in the ’discussion that the industrial classes of this colony are far from being overtaxed. The figures of the Colonial Treasurer prove this, and they remain unshaken. In debating the incidence of taxation it is to be hoped that Parliament will not lose sight of the manner in which the revenue should he distributed.

That seems to us of fully equal importance. Too much strain is put upon the Consolidated Revenue of this colony. Charges which are of a purely local nature are constantly shoved upon the general revenue, and a tendency to shirk local responsibilities is unfortunately growing among the people of the colony. What better illustration could be afforded of this than the action of the municipal delegates who met in Wellington the other day. Those sage mayors, councillors, and, members of Parliament for' various towns and districts of the colony actually passed; a resolution that it was just that the General Government should contribute to the maintenance of fire brigades. The reason they gave was that the Government held considerable property in the various towns. The delegates appeared to be utterly oblivious of the fact that that very property was there almost solely for the particular convenience of the people of the towns, that its existence : assuch convenience involved cost upon the colony, that its presence enhanced the value of all other property, and that as the property of the Government it belonged to the community. This latter fact is to. be taken in connection with the general scope of the resolution of the delegates, for it was intended to apply all over the colony. Fire brigades are amongst the most useful institutions in our midst, and' should.be generously supported, but we know of no institution which might be more fairly charged upon local rates. The brigade is established simply for the protection of property, is no creation of Parliament, nor is it one over which the Legislature claims control. If any spirit of self-reliance is to be preserved in the : people, fire brigades and such like institutions should be locally supported, not casually, but made a charge upon the rates. Property then would have to pay for its own benefit, and there would be little difficulty in making the proportion equitable. What struck us as the most singular feature of the discussion of the delegates on this matter was their unanimity. “ Vats for ploonder,” was the exclamation of the Prussian General Blucher when, after the battle of Waterloo, he first beheld London. The delegates appeared to entertain a similar regard for the general revenue. The Hon. Mr. Reynolds was one of the number, and gave it as his opinion that it would not be wise of the fire brigades to depend for a subsidy year after year upon the vote of Parliament, but that provision should be made by Act. This was a happy idea, with which the municipal mind chimed in. From his point of view Mr. Reynolds was right. Parliament could probably find a more legitimate use for the public revenue; If such is the ’ view of the functions of Government held by a gentleman who has had a long political experience, and who recently was a Minister of the Crown, what can be expected from the rank and file ? Direct general taxation, theoretically may bo right and proper, but it would be a bitter pill for people to swallow who shirk the commonest local obligations which involve a tax. It is easy to talk of putting the saddle on the horse most able to bear it; but if the horse becomes restive and kicks against it, what then 1 The holders of property in this colony are in the majority as far as voting power is concerned. Some doubtless intend to make a distinction between large and small proprietors, but the drawing of the line will be a" delicate operation, and it would ‘ be advisable to devote a good many halfhours to that point alone. The Australian colonies are in the same position as New Zealand as to the multifarious calls made upon the general revenue, and in this we have certainly not followed the examples of Great Britain and the United States, where local institutions require no spoon-feeding. The goldfields and the waste lands of the Crown have been sources of great; wealth, and have doubtless chiefly contributed to the present state of things Jin this colony. But as population increases they are becoming relatively of less importance; and it might be advisable to first educate the people to supply their own local wants by direct taxation before calling upon them to pay either a property or income tax. Parliament may bo beginning at the wrong end. However, there seems a general agreement among members that a property tax is necessary, and we have no particular objection to its application, only it is just as well to view the question in all its aspects. And doing this, we might take the liberty to point out to those who are raising “the working-man cry” on this question, that Sir George Grey’s proposals for a change in the incidence of . taxation will scarcely chime in with their views. Sir George proposes that the income and property tax shall touch all classes in the community, from the richest to the poorest. The cottager, according to him, would readily pay the State a percentage on the value of his property for the blessed luxury of knowing that by doing so he was contributing his just quota towards the support of the commonwealth. Sir George, we fear, is over sanguine; and . under any circumstances should remember that the most earnest advocates of a property tax hold with the views expressed by the Hon. Mr. Bowen, who would limit its operation to properties above a certain value. And here vre come to a fallacy which is just now being harped upon by journalists and politicians, who find “ the working man ” a most excellent card to play in their respective vocations, —-that it is simple nonsense to talk about the working man being overburdened at present, or being vastly benefited in the future by the imposition of a property tax. In the debate on the Abolition of Provinces Bill, in 1875, wo remember that Mr. Hunter, the memberfor Wellington, was careful to put this question in its proper position, and showed that what are called the working classes did not bear an unfair share of the public burdens. He further drew attention to the declaration of Mr. Holloway as to

) the condition of the laboring classes here, and cited returns showing that the taxes upon what may be called the necessaries of life did not bear unduly upon the working classes. In connection with this we should bear in mind that the imposition of a property tax must, in many instances, have the direct effect of lowering the rate of wages. Holders of station and farm property, for instance, will unquestionably, and in obedience to a natural law of economics, pay lower wages when they find that property handicapped by a direct tax. As we have said, this question, despite the unanimity of the House, requires careful consideration from every point’ of 'view, and is not one to be lightly or hurriedly . disposed of.