The Daily News. FRIDAY, MAY 3, 1912. THE INCIDENCE OF TAXATION.

Taranaki Daily News, Volume LIV, Issue 200, 3 May 1912, Page 4

The Daily News. FRIDAY, MAY 3, 1912. THE INCIDENCE OF TAXATION.

Thes new taxation proposals outlined fry the Prime Minister in Auckland last week need cause no anxiety, The workers and the farmers of the country will readily agree with the suggestion that the graduated land tax should be increased, though, of course, there has been the inevitable chorus of querulous protest from the wealthy landowners, who 'will be directly affected. This is only human nature, for thyre has never yet been any change in the incidence of taxation anywhere in the world that has not provoked a similar protest. One of those paradoxes of theoretical political economy states that no system of taxation- is fair, because it inevitably bears harder upon one indiviual than upon another. But the same science admits that the fairest system is the one that is least unfair. This is at once an endorsement of the graduated tax upon ■wealth. Money notoriously automatically breeds money, and 1 the unearned increment is a much fairer subject for taxation for public utilities than is the making of a dearer breakfast table. So far as land! is concerned; Mr. Mackenzie proposes that the increase of the land fcax shall begin on properties that haTe an unimproved value of £30,000, and he might without being of being ungenerous have begun at a considerably lower figure. Apart from the value of such an equitable tax for revenue-pro-ducing purposes, it must obviously have its effect in assisting in the bursting-up of large estates and laying them, open for oloser and more generally profitable settlement. These estates have not been resumed by the Government nearly as quickly as the farming community has desired, owing mainly to the exigencies of finance, and a good; proportion of the land that has been thrown open has been voluntarily placed upon the market by its owners as a result of the influence of inflated values. The increase of the graduated tax has been unhappily described as "another turn of the screw." This is too suggestive of rack-renting, for the process is nothing more than an honest endeavor to place the burden of taxation upon the shoulders best able to bear it. As the Lyttelton Times properly puts it: "The principle of making a distinction between earned and unearned income in the allocation of taxation is new to New Zealand law, but it is thoroughly sound, and in countries where it has been applied it has been found to be simple in operation. Obviously it is fair that income drawn from capital without effort on the part of the recipient should pay a larger proportion of taxation thari the earnings of the man who is actively engaged in industry or commerce."

I The suggested increase in the tax is ( certain to be vigorously opposed by the big landed interests, but the equity and propriety of its imposition are beyond all argument.