Super-Tax Regarded as Levy on Capital

Sun (Auckland), Volume III, Issue 742, 15 August 1929, Page 7

Super-Tax Regarded as Levy on Capital

“EXCEEDINGLY UNJUST” defence of the farmer ' rHE SUNS Parliamentary Reporter) PARLIAMENT BLDGS, Wed. in T h . e G , OV ' rnment 'S endeavourthat t°h tHe iSSUe b * siting that the super-tax is a tax on the , btg landowner, an d, as the Hon only * tatCd ’ ft would Mr affect the wool kings,” said !"• D ’ Jones (Mid-Canterbury), taxation”" 13 the Government’s tontoht Proposals in the House t°,n. ht -' Th,s may be clever elecuntrue 9 propaganda ’ but it is GUtillGd to justice, taxation proposals outlie Go,-en,mem are exceedingly unjust and will of' C the' y farnV C ' the Sreat bulk the farming community The 2S r |n- nm *H- eXCU£6S bv 1700°i this only affects some I, large land-owners, . and the ex' nmption of mortgages will onlfaffe^t Th » e last statement is grossly iuacTw'e ’ and - therefore misleading ,and h f Fe ‘’ SB6 land ho lders owning land between £5,000 and £ls 000 and wUhhi t r SandS Gt ' these musTiome " 1 thin the scope of the mortgage exemption proposals. ■ 6 ex “The Government’s policy appears to be to get most money where it will lose least votes, irrespective of justice. continued Mr. Jones. “This mav be a sound policy for a safe-breaker but is not a policy that this House should introduce into legislation. The Party IJ says u is prepared to support a policy that will make the tarmer pay his fair share of taxation nnK- Mr - stated that Labour only wanted the farmer to pay on the same basis as other people. I support that policy. It is stated that the cityman pays land and income-tax, while the farmer only pays land-tax. [.n the city land is only comparatively’ a small part of the business premises, while In the country it is the land that is almost the whole of the farmer’s interest. So the comparison is not the same. AN ACTUAL CASE The city man in a great majority creases in actual practice pays no landtax, as the Commissioner of Taxes stated recently. The city man is allowed an exemption of 5 per cent, off the capital value of his land which offsets the land-tax paid. The following illustration, an actual case, emphasises my point:—City pro- I Perty, capital value £28,250, unimproved value £9,750, improvements £13,500, 5 per cent. on above l £13,500) £1,162. mortgage £14,000, income £1,575. less 5 per cent, of improvements £1,162. taxable income £413, income-tax paid £l3 Ss 9d, .894 per cent, of income, no land-tax payable owing to exemptions. If incometax on £1.575 were levied on this property, without any question of landtax payment and exemption, this estate would pay approximately- £ 120 per annum. Compare this with another actual cost of a farm property on which I have been asked to advise. This farm property was valued recently for probate purposes at £25,000. the owner's interest in property amounting to £16.000, the balance being covered by j mortgage. The land-tax previously i paid amounted to £241 11s Id per an-| num. The proposed taxation outlined j in the Budget increases this tax by j £250. which, capitalised at 5 per : cent., amounts to £5,000, or direct cap- ; ital levy of nearly one-third of the ] owner’s interest. This property is an ■ agricultural farm growing last year 11, bushels of wheat, employing a considerable amount of labour, and farmed by a widow with seven soils and daughters. DIRECT CAPITAL LEVY "1 could multiply similar illustrations which prove that the proposals are not taxation, but a direct capital levy’. The taxation is proposed allegedly for breaking-up purposes, yet a large percentage of the big properties 1 that will be affected cannot be subdi- j vided. The Minister of Lands al- | ready-, in his short term of office, has rejected properties on the grounds that j they are not suitable for subdivision, j Yet, although the owners purchased | these properties in good faith, this ‘ super-tax is imposed upon them, which ■ will depreciate their properties heav-, ily and in many cases confiscate the ‘ whole of the owners’ interest, and [ thus make it impossible for them to renew’ their finance. The Prime Minister stated on a number of occasions, prior to the session, that he must get land at lower prices, so we are forced to the conclusion that this is his delioerate policy of forcing a reduction in land x r alues.”