TAXATION.

New Zealand Times, Volume XXXIV, Issue 5565, 29 January 1879, Page 3

TAXATION.

(contributed). Infizingou luxuries as a moat legitimate object of taxation forStatepnrposes,! do not profess to have hit on the scheme embodied in the admirable axioms of equality of sacrifice, or a strict adjustment of State burdens on the basis of advantages received; but have simply directed attention to a source of revenue which is comparatively unobjectionable. It is voluntary in its character, and not required for any of the ordinary purposes of lifo or comfort. A tax on land is very generally regarded as a most legitimate source of revenue for State purposes. As a matter of fact, it is a tax that has been most general iu all ages and countries of which we have any authentic _ historic records. I readily admit that the idea and practice, however widespread, are by no means absolute proof that land is a fit and proper subject for taxation; its utility, therefore, when compared with other forms of taxation, should be accepted with caution. In practice it cannot bo harmonised with tho axioms to whicli I have so often referred, and it is most decidedly and certainly obstructive to the development of one of our most important national industries, viz,, that of agriculture, A tax on laud moans the taking a certain sura of money annually from tho owners and occupiers of land that would otherwise he available for the employment of labor iu the development of agricultural iuduatry. I say available for tho employment of labor In connection with our agricultural industry, because it by no means follows that it would be so invested. In many instances it would he spent on personal aggrandisement, involving a considerable amount of unproductive labor. Yet a land tax will and must take money, a large per centage of which would otherwise have been invested in agriculture, and to that extent interferes with and checks tho progress of that industry. In taxation, however, it is not a question of imposing taxes that will not in any way interfere with or check the progress of onr industries. Taxation implies tho taking of what would otherwise bo available for investment iu something that would be to the public advantage. But it is the duty of the State to impose the necessary burdens in such a manner as to interfere as little as possible with the development of industry. Whatever may bo the objections to a land tax on the ground to which I have referred, all will agree that the imposition of say £IOO,OOO per annum as a land tax will interfere far less with the progress of our agricultural industry than would the imposition of thesame amountonagricultural machinery. I have before observed, and I think clearly shown, that a tax on the necessaries of life is equivalent to a tax on manual labor. A land tax takes from what might or might not be invested in our agricultural industry, but a tax on the _ necessaries of life is a tax on human labor, which labor is the great motive power of our agricultural industries. It is therefore, I think, clear that a land tax is by no means the worst or most obstructive kind of tax to the public weal. So far as the State is concerned, it would appear that the land tax, in general fairness, should be adjusted in accordance with the value of the land. Where laud is pretty equally distributed amongst the population, there can bo no possible valid objection to such a uniform principle of adjustment. Where land is held in large areas, another consideration in connection with the subject very properly forces itself on the Legislature, viz, whether or not it is for the public beuefit that laud should be so held ? If tho answer is in the negative, then the further question arises, how best to secure the public good, by putting a check on the further aggregation of large lauded estates, and to induce present large holders to part with some portions of what they now hold. In connection with this branch of the subject it has been suggested for the accomplishing of this object that a land tax should be on a graduated scale, ranging, say, from one farthing in the pound to one penny or upwards, according to area and value. That the Legislature has a perfect right so to act, if in its opinion it is necessary for tho public good,, cannot be denied. Notwithstanding _ the general popularity of a laud tax, its utility cannot be vindicated save on the ground of the exigencies of tho State, as it naturally interferes with the progress of one of our principal industries, although, as we have seen, not to the same extent as would some other forms of taxation. In its operation it does not accord with eitherof the axioms given— i.e., it does not involve an equality of sacrifice, neither is it paid in proportion to advantages received because many of our landholders, on whom the tax would fall, are not the landowners, inasmuch as the laud they hold is mortgaged to another. The mortgagees would possess the ability to pay, and yet they are free from any impost. This affords another illustration of tho impossibility of levying taxes according to these axioms, and points to the fact that the Legislature must look beyond such axioms to some such general principles as those to which I have previously referred.