LAND AND INCOME TAX.

Taranaki Daily News, 19 September 1919, Page 5

LAND AND INCOME TAX.

OUT OF DATE LAND VALUATIONS. INEQUITABLE INCIDENCE 01? TAXATION. By Telegraph.—Press Association. Wellington, Last Night. In the Houre of Representatives this evening the Minister of Finance moved the second reading of the Land and Income Tax Bill. Ho explained that i'■ Bill was the same as last year's measure, there being no alteration in the schedule of taxation. Mr. McCullum raised a protest against the laxity of the Department in not having regular and equitable valuations of land resulting in anomolies in justice and discontent. Much revenue to the country was being lost. Hon. Buddo complained of the inequitable nature of the taxation on companies, particularly on co-operative Foeieties, which were mostly composed Of small shareholders who invested their small savings in these companies, than which there was no better method of assisting the Dominion. He entirely I sympathised with Mr. MoCallum's complaint about the out-of-date valuations. Mr. Ell protested against the abolition of the mortgage tax, which did not help the borrower. Mr. Pearce defended the present method of collecting the tax on mortgages by means of the income tax, which wit: much fairer all round, j Mr. McCombs said he could not understand why, in view of all that had beer revealed, that the House was being asked to re-enact all the ennmalies whirlhad been exposed in the forms of taxation devised by Sir Joseph Ward. For this the Reform Party could not escape responsibility in this matter. He advocated the re-enactment of the War Profits Tax. He regretted that no memfeer could move any amendment to the Bill. The House resumed at 7.30 p.m. Mr., Payne continued the debate on I the Land and Income Tax Bill. He condemned the present system of levying taxation, which was full of injustices. He advocated a completo revision of the Customs' tariff with a view to relieving the poorer classes. He also favored a considerable increase in the income tax, helping thereby to institute a system of taxation which would bear equally upon all classes of society. Sir John Findlay denounced the present system of taxation, because it made no differentiation between earned and unearned income. A hard working doctor or lawyer had to pay as much as a man who derived the whole of his revenue from investments, and toward* which he did not do a hand's turn. This was absolutely unjust, and one day some Government would see this injustice removed. Again, anyone consulting the Year Book would see that the land values of this country were older than the great war. That meant that the landowners were paying land tax l on values far below the present values, but this was not the case with the people who were paying income tax. These taxpayers pay on the gross amount of income, not, as landowners were doing, paying on a rate 50 per cent, below the present day values. Much the same thing was going on in regard to our Customs duties, under which we were paying on many articles far out of proportion to pre-war rates. He quoted instances to show how articles iu common use were paying taxation, not oil pre-war values, but on present values. Men's hose, for example, valued at 7s lid per dozen before the war then paid 2s 2%d by way of duty, and now paid 7s lijd. From this he arrived at the fact that we were not fair to ourselves, for surely if everything else was to be taxed on present day values, was there any reason why land should be taxed oil valuations older than the war? Mr. G. W. Eussejl did not see in 'the Bill any indication of the revised fiscal policy to meet the post-war conditions. When we had been told that we were to have a new world it was our duty to make this new country a better country for the people to live in. A Labor member: A new heaven. Mr. Bussell: Thank you. He went on and quoted instances of the enormously increased land values. Soldiers coming back had to pay these high prices, and he asked 5f In a position like that it could be said that wo were taking steps to establish a new world. There was nothing in this country at the present time but the will to gamble in land, and the good, humane and patriotic policy of the Government in seeking to place soldiers on the lan 4. and in going on to the open market for land to settle them on, was one of the causes of the present inflation of values. What this country looked for now in view of the new work, was that the saddle Bliould be put on the strong horse, ahd those community created land values, daused by refrigerator, railways, expenditure of money on harwrs, and other suoh causes, should pay their share. He moved, as an amendment, that the debate be adjourned to enable the Government to reconstruct a direot taxation policy of the country on the following lines: (1) The restoration of graduated land tax on estates over £IO,OOO value; (2) the establishment of a sharp graduated tax on incomes of £2300, rising to 40 per cent, on private incomes of over £20,000 per year; (3) the readjustment of taxation on incomes of companies in order to allow small investors to receive 10 per cent, on their investments; (4) the limitation of dividends and profits of joint stock companies to 10 per cent; (6) the restoration of the tax on mortgages, making the tax payable by the mortgagees. The amendment failed to find a seoonder, and consequently lapsed.

Mr. Holland said no member of the Labor Party would second the amendment, because they recognised it did not represent reform, but merely a quarrel between two sections of the House. He declared that our methods of taxation stood in need of revision, ftnd needed it badly. The Labor Party was determined to see that those who should pay shall pay. They were determined that the money required to carry out the war policy should be found by those who have made large profits out of the war. To this, Labor, whioh was determinedly opposed to the Government's system ' of taxation, would see in the near future when they take possession of tie Treasury benches, driving in the process both Reformers and Liberals into one common camp of opposition, and it may be into outer darkness, Mr. Anstey condemned tho Bill, as it imposed taxation on an unjust basis. He wont on to'show how this operated against companies, especially co-oper-ative societies. The state of the oountry called for a complete revisal of the taxation policy, because at present it favored the idle and wealthy and the monopolists. Dr. Newman made an appeal to the Minister to, tax unearned income on a different basis to earned income. Some relief sheuld to giy«a t» Bugtijd f wplfi

while anomalies should be removed from the Customs tariff. Such anomalies were strangling some of our industries. What we needed above everything else was an anti-dumping clause. Sir James -Allen, in reply, said he did not pretend that our system of taxation was perfect. At tke same time it was not unduly harsh, and many provisions had been made, even during the war, by which deductions could be made in case of hardships. He recognised there was a certain amount of hardship connected with taxation on companies, but the fact was that during the war money had to be obtained. When he was previously Minister of Finance he «vas considering proposals to remove that hardship, and had now not interfered- Some of these suggestions no doubt had been carried out, but even in these cases there was provision to give relief in cases of individual hardship. It had been said taxation should be put upon those best I able to bear it. He contended this was being done. The sum of £6,219,000 was collected from income ta* payers, £1,500,000 was collected from the land tax, and £3,830,000 from the Customs. That surely was burden enough for the people of the Dominion to bear, and he only regretted he was not in a position to announce some reduction. As to Sir Jas. Findlay's instances of Unfair taxation on men's sox, he ridiculed the idea that a working men brought socks which paid a duty of 7s 1 jd. Working men bought socks made in New Zealand, which paid no duty at all. .As to land values, he could only say that tha Valuation Department had been shorthanded. The men had gone away to fight instead of remaining to value the land, but as soon as things beei,m« normal lie would be glad to bring btfort his colleagues the necessity for having land valuations throughout the Dominion revised. The Bill was read a second time on tll« voices. The Premier claimed urgency for the measure, which was put through all stages without amendment. On the motion of the Premier the House rots at 9.49.