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[B. G. CLARK.

is started very gently. The information as to improvements is defective on the valuation rolls. People have e:ffected improvements and have not bothered to have them put on the rolls- in many cases because if they did so they would be subject to heavier local rates. If we had applied the section rigidly this year we would have caught a lot, of pe;oph:, as it were, on the hop. How does that clause work? What, is improved land? What degree of improvement will keep a man's land exempt? —£1 per acre, or one-third of the; unimproved value. You do not admit that there is any particular difficulty in arriving at unimproved value ?—No, no difficulty that is insurmountable. In the cities, I thoroughly agree: with you; but you do not think there; is any special difficulty in arriving at it even in the case of rural lands ? —No. I suppose you know, from correspondence that you must have had, that there, is a considerable semse: of injustice among farmers over the taxation of unimproved value: ? —There is a certain amount. A very groat deal : do you not find that ? —Nei. They do not want improvements taxed, but what they say is that the Department has not been able to arrive, at anything like equity in assessing the, unimproved value's. And thoy claim that that is true, that the weight f>f evidence is invariably against them. It is hard to get them together, and one man brings his evideuice before the Assessment Court, and the weight that is against him is this : It is said to him, " Have you not fifteen neighbours farming similar land extending em either side of your farm. ? The;y have not appealed, and therefore they must be satisfied." That is what the' farmer says is the usual procedure in an Assessment Court, anel he cannot get redress ? That is their own fault. As to the; feeling of injustice, I dei not think there is any-greater feeling amongst farmers against taxing on the: unimproved value than there is against any other tax. Ido not think there is any more. You think it is just the ordinary resentment against taxation ?- That is all. Mr. Shirtcliffe.] To carry a little further what we have: heard from Mr. Begg, it, seems to me there: is a great principle involved in this suggested tax on improvements. Take: the case of a sheepfarmer or a dairy-farmer: He: wants his land to carry the maximum number of stock, and in order that it shall do that he has got to improve his property ve:ry considerably ? —Yes. Take the case of a merchant in the, city : He requires, in order to get his income, to carry more or less heavy stocks of merchandise. In order to carry those stocks he must have; the property improved by way of buildings and warehouses and so forth. If you tax improvements, might you not extenei the principle further and tax the: stock or the merchandise out of which the income is earned ? —lt would be just as reasonable. It would be as logical ? Yes. It practically means the property-tax, does it not ? Yes. A tax on improvements ?—Yes, 1 think so. Mr. Hunt.] I have just run out a suppositious case to se:e: how it woulel work. I have set eleiwn the land, unimproved value, at £12,000, and the improvements at £4,000, making a total land-value; of £16,000. Stock and plant I have: set down at £4,000, making a total capital value of £20,000. Assuming that the property earned 10 per cent, before tax is paid, including the owner's labour, that would make £2,000 total earnings. If you take the land-tax on the unimproved value at £12,000- — we, will assume a flat rate: of l|d. --that would be £75. income-tax would be payable: on £2,000, less 5 per cent, on £12,000 —namely, £600. That would leave a total taxable income of £1,400, omitting exemptions for life insurance and family, and so on. The tax on that £1,400 would be at the rate of Is. 5-6 d., which comes to £102 145., making his total £177 14s. If you suppose that instead of taxing that man on the unimproved value you tax him on the improved value, you would levy land-tax em £16,000 instead of £12,000. At ljd. in the: pound that would be £100. The income-tax would be: levied on £2,000, loss 5 per cent, on £16,000, or £800 ; so his taxable: income would, be: £1,200. At Is. 4d. in the pound on that £1,200 he would pay £80, making his total payment in taxation £180. So it is almost identical, is it not ? —Yes, in that case ; but it woulel vary. Ido not think you can take a stock case like that. When we take out actual cases of people with the same capital in eiifferent occupations we, find that the variations are very great. Mr. Weston.] There are; two classe:s we want to exempt. There is the man who has a property of his own in the city, up to, say, £1,000 —that is, including improvements. £1,000 would mean that the working-man woulel be able to make-his house his own ? —He woulel not nowaelays. I think he will shortly. I quite, agree with you that it does run over that sum now, but we must draw a limit, and so I set down £1,000. We must give that exemption of £1,000 to the: city man, and an exemption of £1,000 also for the small farmer. Then, if you were to have a flat rate, you would have to provide for farmers who came in under the progressive income-tax. It would not be fair for them to pay double taxation, would it ?—No. I would suggest that, as it were, you take your choice. Supposing a man is making a mess of his affairs, probably his income from the property will not be such as to make his income-tax equal the: land-tax ; but supposing the income-tax exceeds the land-tax, them tax him on his income ? —Why not give: the 5-per-cent. exemption, to wliich people have been accustomed and which in theory exempts the income from the unimproved value of the land. The only thing that struck me, there was that that would give too great an advantage to the: man with, a big income. Supposing he, has a £20,000 property and the land is worth £16,000, you woulel give him an exemption of £800 ? A man's income has no relation to the: value of the, land he occupies. 1 am thinking of the big farmer, the man who has probably got £8,000 ? —You have got to think at the same time of the big business man. There should be no difference in the treatment of the big farmer and the big business man.