TAXATION. II.

New Zealand Times, Volume XXXIV, Issue 5560, 23 January 1879, Page 3

TAXATION. 11.

(CONTRIBUTED.)

It is rather a remarkable fact that the prettiest and to all appearance most feasible theories are often found when attempted to be reduced, to practice not only very defective, but' oftimes altogether unworkable, even when attempted to be put into practical operation by the theorists themselves. In politics we have many instances of this kind, as it has frequently been found that the foremost in the ranks of political economists have proved to be moat defective and incompetent practical legislators, which points to the fact that the science of political economy can only, with public advantage, be made use of by statesmen as landmarks to guide them in the general principles of practical legislation. On the question of taxation, what can be more just and fair than the principle embodied in the following axioms; —That persons should contribute according to their ability or means ; that persons should contribute in proportion to the advantages they derive, from the State; that the contributions levied should Involve equal sacrifices from the contributors. And at the same time, what can be more difficult, impracticable, or impossible, than the strict and individual application of those just and admirable axioms ? Their strict application would involve a knowledge of each man’s income, each man’s requirements, the cost of_ life's necessaries and conveniences in each district, and an estimate of the.value of the advantages each one derives from the State. Yet these axioms may be of the greatest value to the practical statesman, as landmarks to guide him

in the construction of his fiscal policy. As anything approaching a strict or personal equalisation of the burden'of taxation is impracticable, and as such must be abandoned as Utopian, I have long thought that instead of attempting to adjust the burden by dealing with detailed circumstances, we should do well to seek a broader basis of operation. By regarding the country and population more as a whole than we are generally in the habit of doing, many advantages would ho gained, because the effect of any given impost on ono person, or on any given class of persons, is not confined to the person or to the class so taxed, hut in many instances extends throughout the various ramifications of society, just as the disturbance of water caused by a stone dropped in is not confined to the place where tha stone falls, but extends far and wide. This illustrates what to my mind is one of the fallacies of many persons’ schemes of taxation. They imagine, when they impose a tax on any class of persons, that the burden of such tax will rest solely on the shoulders of the persons on whom it is imposed, forgetting altogether that its effects extend to others, and perhaps to those least able to hear it. Hence we often hear, “Oh 1 tax the landed proprietor,” taking it for granted that the entire burden imposed will rest on him. Xdo not say he should not he taxed, but am of opinion that land should be taxed, for reasons with which I shall not now trouble your readers. Another contends that all incomes above a certain amount should he taxed—so be it—while a third has a great down on mortgagees and general money-lenders, and thinks them fit subjects for special taxation, altogether ignoring the fact of the effect on our institutions and industries that these or any other special forms of taxation will produce, as also the general homogenousness of the interests of society. I make no pretensions to the possession of the ability to solve tho difficult problem of how best to levy the necessary State imposts, but I do say that a principle which should ever guide the Legislature when itattempts toreadjustthe burden of taxation is to so frame their laws as to interfere in the least possible degree with the progress of our industries and the development of our natural resources. That the general prosperity of a country depends on the progress of its industries and development of its resources, no one, X think, will deny ; therefore it would appear to be self-evident that in the interest of all, as a whole, the necessary taxation for State purposes should be so raised as to interfere as little as possible with that development. No one can doubt but that the manner in which the necessary taxes are levied may very materially affect the progress of the industries on which general prosperity depends. For instance, a heavy tax on agricultural implements, by increasing the cost of producing agricultural products, would thereby lessen the area of land that could he profitably cultivated. This would be far more obstructive to the general progress and prosperity of the country than the imposition of an equivalent tax on silks and elegant household furniture.