OTHER PAPERS’ OPINIONS.

Putaruru Press, Volume VI, Issue 251, 23 August 1928, Page 4

OTHER PAPERS’ OPINIONS.

TAXATION. In his Budget attack upon the “ wool kings ” the leader of the Opposition left several things out of consideration; but as the Government has I been almost equally prone to omit important taxing considerations in the past it cannot now protest overrhuch at Mr. Holland’s statement. One thing which Mr. Holland forgot was the lean years when there were few smiles after the wool sales, and when some of the big sheep-owners, if they had been assessed for income tax with the usual allowances made, would have had little or nothing to

pay. Yet the sheep-owners at that time had to pay land tax. The seeming hardship of this (we say “seeming ” advisedly) was stressed in Parliament. The producers, it was said, were paying taxes out of their capital. Probably they were, but many city businesses did the same. It was capital accumulated, or held in re • serves, from good years. But the plea of the producer compelled to eat into the capital built up in good years was heard in Parliament, and was made the justification for reduction of land tax and for increased mortgage exemption at first of £4OOO and later ot £IO,OOO. This mortgage exemption, with the specious justification that we were “ taxing the man on his debts,” was quite mistaken. If the farmer had been liable for income tax the mortgage charges would have been a proper deduction; but their calculation in the assessment of land tax shows a complete misconception of the character of land taxation. Tf the exemption is made (as it was made originally) on the ground f but the land taxes were being paid out of capital, the principle is accepted of taxing, not the land, but the profit derived from the land. That principle is not followed to its logical conclusion when the exemption of the landuser from income tax bars the State from receiving its due when the landuser makes a substantial profit. The whole trouble arises from the fact that Parliament as a whole has little sound knowledge of basic principles. It is guided by special pleas and special considerations which, though they may appear well founded at the time, are bound ultimately to produce anomalies —usually with the State as the loser.—Wellington Evening Post.