THE Temuka Leader. TUESDAY, DECEMBER 8, 1891. THE LAND TAX.

Temuka Leader, Issue 2290, 8 December 1891, Page 2

THE Temuka Leader. TUESDAY, DECEMBER 8, 1891. THE LAND TAX.

We feel disposed to forgive Mr Rhodes all his past transgressions for the open frank way in which he admitted that farmers would be greatly benefitted by the . change in the incidents of taxation. He told us that a farmer who owned £20,000 worth of land will pay £l3 10s lOd less than he did under the Property Tax, and that many large estate owners worth £30,000 will pay no more than they do at present. That is enough for us to know in this district. Very few indeed, if any, in this'district possess over £30,000 worth of land free of encumberances, and consequently we need not trouble very much about the graduated tax. From this it will be easy for everyone to see that the present Government have taken particular care to avoid harrassing. the farmers as much as possible. To be sure Mr Rhodes said there would not be sufficient revenue, and that the Government would bye and bye come down on the farmers for more taxation. We are inclined to believe that the Government have no such intentions, and if more taxation is required the wealthier classes will be called upon to make it np. At any rate it is time enough for farmers to trouble about increased taxation when the Government begin to speak about it, but meantime it is, we think, more to the point to discuss the present impost. We find that many farmers entertain very erroneous ideas regarding the new tax, Some. think they . will have to pay a Land Tax on their land and an Income Tax on what they make out of it. This is a fallacy. No farmer will be required , to pay an Income Tax unless he is in receipt of an income independent of the land. Supposing, for instance, a farmer paid £lO Land Tax, and made : an income of £IOOO out of the produce of that land he would not be liable to an Income Tax. But if he had been in receipt of an income of £SOO (in addition to the £1000) from the interest on ,money deposited in a bank, or from some other source, he would have to pay an Income Tax on the £SOO. A farmer, therefore, pays no Income Tax unless he has an income from a source which pays no other tax. If the £SOO had been derived from shares in a company which paid taxation on these shares, then there would be no tax on it because the Act provides against any species of property being doubly taxed. Another delusion which is prevalent amongst people is that unless they have over £3OOO of land they will not have any tax at all to pay. This also is a mistake. A man having £3OOO worth of land may have to pay £lO or £l2 in Land Tax, or he may not have to pay half of it. It altogether depends on the value of his improvements. The greater the value of his improvements the less he will have to pay, but if ho improvements at all had been made on the land he would pay as much, if not more, under the Land Tax as he would under the Property Tax. But there is no farm in this district which is not highly improved, and therefore it is no use looking at the matter except from the improved farm point of view. We shall now give an example, so as to show farmers exactly how they can calculate the whole thing for themselves. We shall take a farm worth £3OOO, and Just see what it paid under the Property Tax first of all. To the £3OOO worth of land we must add the value of the stock thereon, including sheep, cattle, horses, drays, . carts,, buggies, firm implements of all kinds, and we may safely put these, down at £SOO. In that case the fanner would have to pay Property Tax as follows : Value of land ... ... ... £3OOO Value of stock, &c., thereon ... £SOO Total... ... ... ... £3500 Deduct exemption ... ... £SOO £3OOO Thus the farmer would have to pay Id in the £ on £3OOO, equal to £l2 10s Property Tax. Now let us see how this pans out under the. Land Tax. First of all there is no tax on sheep, cattle, horses, drays, farm implements, or anything of that kind. We must therefore throw off the £SOO put bn for- the purposes of the Property Tax, which made his property total up to £3500, and deal pnly with the land. We have therefore only £3OOO worth of land to deal with, and we shall consider this has reached the highest degree of improvement. We shall suppose that there is £IOOO worth of a dwelling house on it, £IOO worth of outbuildings, £IOO of a plantation, orchard, &c„ £3QQ WQrth of fencing, draining, grass, and so on. That will bring his improvements up to £ISOO. We have therefore to take this from the total value as follows :■— Tojfcal yalife £3OOO Deduct improvements ... Balance ... ••• £l5O0 k

1 There is therefore £ISOO to be I dealt with, but from this there is £SOO exemption to be deducted, reducing the taxable value of the property to £IOOO, which, at Id in' the £ amounts, to £4 3s 4d. Of course we have taken a highly improved farm. Weknbvv that there are not many farm houses worth £IOOO, but the farmers can value their own. houses, and calculated exactly on the same basis. We shall return again to the subject on a future occasion.

THE FRIGHTENED CAPITAL. Recently we directed attention to Mx Ehvorthy’s readiness to add to his enormous estate ; also to Mr Seddou’s purchase of a station up country for £40,000. These facts indicate that the graduated tax is not frightening people, nor has it brought down the value of land. The Lyttelton Times cites the following cases : “ Just the other day a gentleman who has travelled through England, America, and Australia in search of a remunerative investment for his money, paid £29 2s 6d an acre for 493 acres of laud at Leeston ; another gentleman, who is certainly not likely to imqeril his character for shrewd common sense, paid £lB 10s an acre for 1000 t acres at Springston; and a third gave £22 10s an acre for 500 acres in another part of the district. Besides these transactions there are scores of others, which prove, beyond the possibility of doubt, that there never has been a more confident feeling among men who are content to win a comfortable living from the land than there is at the present moment.” The bubble of frightened capital is burst up. How could capital have been frightened when really it is better off than under the Property Tax. There is no graduated tax on money, while banks, building societys, etc., will get off much lighter than before. Money is as cheap as ever; there are thousands of it seeking investment and cannot get it. This is more remarkable considering the fearful condition of monetary institutions in the Australian Colonies. At any rate we may all feel perfectly satisfied that the cry about frigtened capital is a myth.

THE FINANCIAL CRISIS

Cable news indicated that great efforts are being put forth to uphold the unhealthy condition of finance in England. Mr Goschen, the English Chancellor of the Exchequer is endeavoring to prop it up by means of paper money. Mr Goschen is undoubtedly a great financial authority, but we cannot see how paper money can improve matters. To issue pound notes would undoubtedly be a great convenience to the British public, but if the crisis came the paper money would be useless. Mr Goschen is in favor of a State Bank, and so is Mr Gladstone. No doubt if a severe crisis comes it will result in the Government taking the matter in hand. At any rate things are not looking financially bright in England, more especially as she is losing her trade in all directions, owing to the system of protection adopted by other countries.

THE GERMAN EMPEROR.

Foil the past twelve months hints have frequently been thrown out that the German Emperor is, coloquially speaking, “ a shingle short.” We think there cannot be much doubt about it. He has commenced to preach religion, and has ordered his sermons to be published. A cablegram just to, hand says:—

“ The Emperor addressing the recruits and guards declared that they were his body and soul, and must shoot their parents or brothers without reserve if the Socialist agitation rendered the order necessary. The speech has caused a sensation in Berlin.”

It is not surprising that it did cause a sensation, and it appeats to us to be clear evidence of insanity.

CHANGING CLIMATE

• A movement is on foot to form a syndicate to build an embankment at Fort Augusta (South Australia). and pump sea water into lakes Torens and Eyre, with a view to changing the climate in the interior of the colony. Money for carrying out the project will be available if the Government allow adequate grants of land.” So, at least, a cablegram says. This is the most extraordinary thing we have heard for a long time. Somebody has suggested to flood the deserts of Arabia, which are said to be at a

lower level than the sea, but then the proposal consisted of cutting a channel. Perhaps, however, the work of pumping at Port Augusta is not a more formidable undertaking. At'any rate the proposal will be watched with interest.