CURRENT TOPICS.

Taranaki Daily News, 7 September 1917, Page 4

CURRENT TOPICS.

TAXATION OF DEBTS. A tax on the mortgage, if the farmer has to pay it, is a tax on tho farmers' indebtedness; whereas, if the mortgagee has to pay, it is a tax on his property in the land. Surely, if there must be a. mortgage tax, and Sir Joseph Ward has made it very clear that without a mortgage tax the land tax would yield little if no revenue, then the mortgage tax should be paid by the mortgagee, not by the farmer. It i s an anomaly and an injustice to tax the farmer on his debts. It is true that the small farmer, whose land is subject to a mortgage, is allowed mi exemption of £IOOO, 'and that those whose incomes bring them under the income tax are, for purposes of taxation, allowed to deduct from their incomes 3 per cent, on the unimproved value of the land from which the incomes are earned. But these concessions do not show that there is no anomaly and no injustice in regard to the mortgage tax under the Budget scheme. On the contrary, they recognise the anomaly and injustice, and only ease it somewhat, instead of entirely abolishing it. The injustice and anomaly can, indeed, only bo abolished by requiring the farmer and the mortgagee to pay the land tax on a given property in proportion to their several interests In that property. The position taken up by the lion, member for Patea (Mr. C. V. Pea,rce), that the mortgagor and the mortgagee are practically part-owners of the land, is, without doubt, economically sound; and while the mortgage covers both the improvements and the unimproved land value, it is not true, as Mr. C. J. Parr, M.P. for Eden, suggested, that the two are, for the purposes of taxation, inseparable. The interjection, "Value each separately," made by Mr. W. H. Field, M.P. for Otaki, shows the way out of the difficulty; and, as a matter of fact, improvement values and the unimproved value of the land are already assessed separately for land tax purposes. Where a property, whether in town or country, is mortgaged, all that ib necessary is to apportion the land tax between the mortgagee and the mortgagor in proportion to their several interests in tho property, and the thing is done. If a farm, for example, is mortgaged to three-fourths of its value, the mortgagee should pay three-fourths of the tax and the farmer one-fourth; and so on. There is no difficulty whatever about it. It is true that, under the Budget, the mortgagee is required to pay income tax on his income from the mortgage, and that he might rightly object to what would amount to double taxation on his interest in the land; but he has been very gently dealt with in the past, and, in any case, he is much better able to pay even double taxation on his property than the mortgagor—in many cases a struggling farmer—-is to i pay taxation on his debts.—N.Z. Times. I