INCOME AND LAND TAX (RETURN SHOWING ESTIMATED REVENUE DERIVABLE FROM).

Appendix to the Journals of the House of Representatives, 1889 Session I, B-21

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1889. NEW ZEALAND.

INCOME AND LAND TAX (RETURN SHOWING ESTIMATED REVENUE DERIVABLE FROM).

Return to an Order of the House of Representatives dated sth July, 1889. Ordered, " That there bo laid before this House a, return showing, as approximately as any data at the command of the Property-tax Department will permit, the amount of revenue which would be derived from an income- and land-tax (the totals for each tax to be shown separately) imposed as follows :— Land-tax : Upon the unimproved value of freeholds of cultivatable land, with an exemption of £500, at the rate of -id. in the pound on the first £1,000 of taxable value, Id. in the pound above £1,000 and up to £5,000, 2d. in tbc pound above £5,000 to £10,000, and 3d. in the pound above £10,000. Income-tax : Upon all income exceeding £200 a year derived from any source other than land subject to tax as above, at the rate of 3d. in the pound on the first taxable £100, witli a progressive increase of Id. for each additional £100 up to and including incomes of £1,000 a year, and thereafter 5 per cent, on all income up to £5,000, V,1, per cent, up to £10,000, and 10 per cent, above £10,000." —(Major Steward.)

Memorandum by the Property-tax Commissioner. Land-tax. —I iiml it is not possible to give an estimate of the revenue that would be derived from a land-tax as proposed. There is nothing in the returns of Assessors to indicate what are cultivatable lands, and no information in this direction can be obtained from owners' statements. Further, if the information were given, the operation of examining assessments to deduct improvements on cultivatable lands, and the calculation of the progressive tax, would occupy a long time, and would be very expensive. Income-tax. —I do not possess information to enable me to give an estimate that would be in any degree reliable as to the revenue that would be derived from an income-tax on the sliding-scale proposed ; and I fear that it would not be possible to obtain the information unless a test were made by getting actual returns of income from residents in some district. In arriving at previous estimates of an income-tax great care was taken to secure accuracy; but it was not possible to gather data that would afford a basis for a correct estimate on the plan proposed. The following statement gives the amounts of property-tax paid by certain companies in 1888-89, and also an estimate of income-tax that would be payable by the same companies under the proposed plan. Shipping, fire and life insurance companies, and foreign banks are not included :— Property-tax paid ... ... ... ... ... £74,870 511 Estimate of income-tax ... ... ... ... ... 34,209 14 2 The total sum borrowed on debentures by the companies included above is ... ... ... ... ... £8,467,029 The interest on which is... ... ... ... ... 378,623 The interest is deducted from the profits of the companies, and if income-tax were charged on it the amount would be £31,022 2s. 5d., calculated on the sliding-scale. The effects of property-tax, and of land- and income-tax as proposed, are as follows in certain supposititious cases. It is assumed that there are no mortgages or debts to deduct. The income from land has not been separated from other income.

Real. £ 100,000 100,000 200,000 40,000 20,000 10,000 10,000 5,000 5,000 Personal. £ 30,000 60,000 40,000 10,000 20,000 5,000 10,000 4,000 20,000 Improvements on Land. !_ £ 20,000 20,000 40,000 8,000 6,000 5,000 3,000 , 2,000 1,000 Income. £ 6,500 8,000 12,000 2,500 2,000 750 1,000 450 1,250 Property-tax at Id. in Land-tax, the Pound. £ s. a. i s s. a. 539 11 8 929 13 8 664 11 8 929 13 8 997 18 4 1,829 3 4 206 5 0 329 3 4 164 11 8 104 3 4 60 8 4 16 13 4 81 5 0 31 5 0 35 8 4 8 6 8 102 1 8 12 10 0 Income-tax. £ s. a. 334 3 4 446 13 4 796 13 4 96 13 4 71 13 4 12 1 8 21 13 4 3 19 2 34 3 4 i

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Estimated number of Taxpayers. —In estimating the results of an income-tax with an exemption of £150, I found that 6,330 would pay in respect of income from personal exertion, as follows :— Doctors, 300; lawyers, 400; clergymen, 250; dentists, 50; bankers, 80; insurance officers, 50; engineers, architects, auctioneers, Sec, 200; bank clerks, 600; clerks to local bodies, 50; insurance clerks, 300; jnercantile clerks and traders' assistants, &c, 2,500; managers of companies, 50; Government officers, teachers, &c, 1,500. In addition to the above, tax would be paid by some; 5,000, including merchants, drapers, grocers, ironmongers, timber-merchants, brewers, bakers, and other trades, and also manufacturers. Those who derive income from land are not included. I estimate that land-tax under Major Steward's scheme would be paid by 15,000, mortgages not being deducted. Some who paid income-tax would also pay land-tax, and I am of opinion that the total number,of taxpayers under the combined scheme would be 22,000. I have not made any new r estimate to ascertain the number who would pay income-tax if the exemption were £200, as proposed, instead of £150. 22nd July, 1889. J. Speeeet.

Table showing Amounts that would be paid under Property- tax, an Exemption of £500 being allowed; and Amounts that would be paid under the proposed Income-tax, the Income from Property being taken at 5 per Cent.

[Approximate Cost of Paper.— Preparation, nil; printing {1,300 copies), .£l3s.J

Authority : Geobge Didsbuev, Government Printer, Wellington.—lBBo,

Income. I Property. Tax. Tax. & 300 400 500 600 700 800 900 1,000 2,000 3,000 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 £ 3. 1 5 2 18 5 0 7 10 10 8 13 15 17 10 21 13 71 13 121 13 221 13 596 13 1,096 13 1,596 13 2,096 18 2,596 13 3,096 13 3,596 13 d. 0 4 0 0 4 0 0 4 4 4 4 4 4 4 4 4 4 4 £ 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 40,000 60,000 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 j £ s. 22 18 31 5 39 11 49 9 56 5 64 11 72 IS 81 5 164 11 247 18 414 11 831 6 1,247 18 1,664 11 2,081 5 2,497 18 2,914 11 3,331 5 d. 4 0 8 4 0 8 4 0 8 4 8 0 4 8 0 4 8 0