The Times. PUBLISHED ON TUESDAY AND FRIDAY AFTERNOONS. TUESDAY, JULY 31, 1917 GRADUATED LAND TAX

Pukekohe & Waiuku Times, Volume 6, Issue 297, 31 July 1917, Page 2

The Times. PUBLISHED ON TUESDAY AND FRIDAY AFTERNOONS.

TUESDAY, JULY 31, 1917 GRADUATED LAND TAX

"We nothing extenuate, nor set down auaht in malice."

A short time ago we promised, as soon as space would permit, to recur to the question of taxation, dealing with the Excess Tax as applied to farmers, an Export Tax. and the proposal of the Auckland Provincial Conference of the Farmers' Union that war taxation should he obtained by increasing the Graduated Land Tax. It would now appear that the Excess Profits Tax will either he repealed or so modified that it will cease to press unduly hard upon the proficient and industrious as compared with the indolent and inefficient, so ii becomes unnecessary for us lo again review it. In regard to the Export Tax the Treasurer has announced that it will noi find a place in the taxation proposa Is cil the (lovernmcnl this year, and much a- we ma\ regret I hal decision, l>elic\ nig as we do t hat il would lie one of the fairest possible ways ol raising a useful sum for wai purposes, any attempt to pursue the subject in lace ol the Treasurer's declaration would he merely waste of time. There remains, however, Ihe proposal <>l the I'nion for a further increase in the graduated land lax, upon which the

Government has up to the present moment made no pronouncement of its intentions. It will be remembered by our readers that in the 191 Budget the land tax on farm lands was increased by .">0 per cent, a rise that was not imposed upon town lands because, tke Treasurer stated, it would interfere with business. At the same time farmers, hitherto exempt from income tax because they were already paying far more than an equivalent in the shape of land tax, were made to pay income tax in addition. We have no hesitation in giving voice to our opinion that the land tax is inherently vicious. Based upon the so-called unimproved value of the land — that is to say the point to which the Government valuer can screw the unimproved valuation by a consistent undervaluation of improvements —it bears no relation whatever to profit or income, i.e., to the power of the taxed to bear the burden. It makes no difference between the highly productive farm and the one that will require years of expenditure and hard work hefore it makes any return to the owner. A hotter devised expedient for preventing the taking up of the waste lands of the colony could scarcely be devised, and if it had been in operation during the seventies and eighties when pioneers were breaking in so many blocks and making them fit for close settlement New Zealand would have been very much more backward than at present. A sound economic axion of taxation is that raw material should never be taxed. The land is undoubtedly the raw material of the farmer, out of which he manufactures his finished products. Any tampering with this principle can only have the effect of lessening production. To take the concrete case of the man who has to pay say £IOO annually in the shape of land tax, would it not manifestly be better for him, for the State, and for the consumer who has to buy what he grows if he were allowed to use that £IOO for cultivation and fertilizing and then be taxed upon the resultant income. To sum up the case against the ordinary land tax let us point out that the New Zealand owner of more than £."»00 worth of unimproved land is now doubly taxed, inasmuch as he is paying land tax and income tax. Land is thus the only form of property paying both a per centage on its capital value and on the annual return therefrom. Let us commend this point of viewto Sir Joseph Ward, who is so uncompromisingly an opponent of double income tax, i.e., a payment both in the country where the income is made and in that where the owner lives. To come to the question of the graduated land tax, which is imposed in a steadily rising scale upon all properties of £sooo unimproved value or over, our objections have an altogether different basis. In the case of this tax the land owner has to pay not only upon what he possesses but upon what he does not posess. In the case of the ordinary land tax he is permitted to deduct what he owes by way of mortgage : in the graduated land tax he is allowed no deductions. Hence we see the extraordinary anomaly of a man being taxed upon his debts. It N perhaps hardly necessary for us to state that we approve of the principle of graduation in taxation, so that the richer a man is the higher shall be the per centage of that wealth paid to the State. If we are to have a land tax by all means let us have a graduated land lax in addition to it. but it we have not lost all belief in fair-plav let u< see that it is imposed upon what a man has and not oil what he owes. As the graduated land tax does not commence to operate unt ii the t'aOOO mark is reached il will c .isi 1 \ lie understood that the great majority o| tanners will not he touched by it. It w< >n Id | >i"ba bly I v s:i I e I < > >a\ I hat the average iiuiulht in each riding o| I lie I hive count ies I lie " I iuics" circulates in would be well under a dozen. It is upon there alone that the farmers' I' 11 ii mi desires that taxation for wai pui |ii>sc- should be placed. We have always looked upon I his as even In >d v's war. AI | inv rale even body's all is I he I

stake of the final issue, and we believe that everybody, except the really poor, should make a contribution to help to win it graduated as fairly as possible to his capacity to bear it.