LAND TAX CONDEMNED.

Putaruru Press, Volume VIII, Issue 338, 15 May 1930, Page 6

LAND TAX CONDEMNED.

INCOME TAX FAIRER. Views of Farmers’ Union. Strong condemnation of the Government’s recent amendment to the land tax, whereby large landowners are to be taxed more heavily than in the past, was voiced by Mr. R. D. Duxtield, a member of the Dominion executive of the Farmers’ Union, when speaking at the Farmers’ Union rally in Morrinsville. In the general discussion that followed his views were endorsed by other speakers, and no one came forward to defend the Government. “ Then there is this last injustice of class taxation. I refer to the Land Taxation Amendment Bill of last year,” said Mr. Duxfieid, after he had enumerated the complaints farmers had to find with tariffs and marketing conditions. “It is a most iniquitious thing because it is purely a class tax. The Government wanted more revenue and it thought it would get it out of the farmers,” he declared. .

To some extent farmers were to blame for allowing the recent legislation to go through, for they had been apathetic about taxation in the past. They had been given the option of paying either land tax or income tax and had not troubled about the justice of these taxes. Land tax was wrong in principle, for it was a tax on capital. It was just the same as if a tax was imposed on the goods in a merchant’s warehouse. He claimed that the raising of the £339,000 estimated to result from the imposition of the new land tax would mean a depreciation of land values to the extent of £5,000,000. In other words, if the land of men subject to the tax was now put up for sale it would bring £5,000,000 less than it would have brought before the tax was imposed, because the net return from it would be reduced by the amount of the tax.

The large landowner was not necessarily the rich landowner, but the new tax took no cognisance of this distinction. ' There were discrepancies due to land in different parts of the country having been valued at different times. Some valuations were up to date, while others were several years old, and it was practically impossible to value the whole country simultaneously. The only reason given by the Govvernment for imposing the new tax was that it would mean subdivision, but many of the Government’s attempts at subdivision of large estates had been failures. He instanced a case at Gisborne where there was not a single application for sections of one estate. The purpose of the new tax was to make landowners subdivide themselves. The tax bad been made so heavy that landowners would be forced to subdivide, but it was not so easy to subdivide. He had had some, experience of subdivision himself and he knew it was an expensive business. After all the surveying or roading had been done only

a few sections might be sold. He contended that there was not such a

land hunger that if all the large holdings were cut up and offered for selection it could all be used. Then again subdivision was not always a good thing, as it might result in the uneconomical working of land and the useless duplication of plant and labour. There was already ample legislation on the Statute Book to provide for subdivision and the new tax was unnecessary as an aid to closer settlement.

“To compel subdivision in this barbarous way you are going to strangle a man with taxation until he can hold out no longer,” continued Mr. Duxfieid. “ We will soon be down to the ‘ three acres and a cow’ which used to be talked of in England. We are to be serfs. We are not to be allowed to rise at all. You might just as well go to the big shops and say ‘ you must come down to the level of small shops.’ ” He recalled the example of Ireland, where tjie holdings were so small that the peasant could not make a living on them and had to go over to England to work as labourers. “ Well, we don’t want a state of affairs like that,” he commented. Mr. Duxfieid said the small farmers had been indifferent about the land tax at the time the legislation was passed, but he prophesied it would affect them in the end. On principal they should oppose it because it was a class tax. If there was a deficit in the national accounts, then it should not be made up by the farmers alone. Mr. P. S. Philpott asked how Mr. Duxfieid proposed to make up the revenue if he abolished the land tax. Mr. Duxfieid: What we suggest is an income tax. That is the fairest 1 (Continued in Next Column)

form of taxation. If a man has not an income above a minimum amount he does not pay any tax, but under the new land tax law he has to pay a tax on his land no matter what is the size of his income. He explained that owing to the falling prices of all sorts of produce most of the large landowners had had their incomes reduced enormously, and could ill afford to pay the tax. Mr. G. H. Pirrit said he thought it was most unfair to compel the subdivision of large estates. The large landowner had been the pioneer in most cases. He had gone back right away from the railway and his expenses had consequently been heavy. It was most unfair to penalise such men. There was no doubt that if conditions warranted it landowners would be only too ready to subdivide their .holdings. He thought the Farmers’ Union should support the large landowner. ; Mr. F. W. Seifert remarked that farmers had been told time and again that their land was too dear, and prices would have to come down, but city people had said nothing of the high price of land in the cities. If the Government wanted to tax land, let It tax city land, because it was country land that was supporting the cities.

Mr. Duxfieid reminded members that it had been quite easy to subdivide large estates like Matamata, because the big landowners of the old days had done the pioneering work and lost their money in the venture. They had done a lot of good, and the country had reaped the benefit. The new land tax hit the farmers because-they could not pass it on, whereas city people could usually pass taxes on to their customers by increasing prices or charges. It was common knowledge that goods cost more In the chief shopping centres of the cities than in the streets where land was cheaper and rents lower. Businessmen paid high prices for city shopping sites knowing they could get their purchase money back by raising the prices of their goods.