TAX PROBLEMS

Evening Post, Volume CV, Issue 118, 21 May 1928, Page 11

TAX PROBLEMS

MINISTER'S STATEMENT A REPLY TO "THE POST" A reply was made to-day by the Minister of Lands (the' Hon. A. D. M'Lcod) to criticism appearing in "The Post" on Saturday of statements made by the Minister at a Reform League gathering in regard to land and income tax. "Yes," said the Minister, "I frankly admit that 'The Post' caught me a bit off tho rail when I mentioned 'bank shares,' but it did not .mention that I had coupled such with-'or in fact any investment other than . land!' Never having had tho joyous privilege of drawing income from bank share dividends, I may bo pardoned the slip, which deceived no one ii. the honesty of intention or object aimed at, viz., a fair apportionment of the tax levied. .'The Post' appears to assume a large amount of unnecessary mortgaging on farm properties ior the one and only purpose of tax,evasion. I confess having little knowledge of1 the possibility of such in town areas, but in my, wide experience of rural lands and the'mortgaging of same, I know of no single.instance. I am not, as 'The Post' suggests, ignorant of the resentment which last year's town tax adjustment, has caused, particularly amongst whom I have known as supporters of the Reform Party, and this I made quite clear'in my speech now under criticism: What I and my colleagues .desire to know is this: In view of the terrific war burdens, ia there any sound ground for tho complaint made, other than, the one applicable to all that no one wishes to;pay taxation? Our critics studiously avoid, an answer to the query." Accordiugto the Treasury, tax assessed for the year 192G-27 on1 incomes of £2000 and over represented just on .82 per cent, of total income tax assessed, and that,: while taxable incomes from £100 to £10J0 had only increased in 1927 by the slightest fraction over 1914, payments on those between £1100 and £1600 had actually de- . creased. ,\ ■ . . . ' ..- - .■ "Now as to land tax; I told those whom I was addressing that it was not easy to calculate how much a farmer paid by way of direct taxation towards the State, as compared' to "what-another taxpayer on an equally '■ good invest-' ment paid by way of income tax. Amongst the many difficult ■ tasks the Minister of Lands has to undertake, there is sometimes that of bringing together mortgagee and mortgagor with the view, if at all possible/ of avoiding the latter having to walk off a holding. I had su«h a case last year, of which I have a clear recollection, because I personally knew the mortgagee. He stated that prior to 1920 ho owned the property which, tbgetHer'-wi't-h the stock, was then unencumbered.- Having five young children and .not being within reach of sehooling.h'e decided to sell out.. Certainly he sold to the mortgagor at a high price, but he only.received a comparatively small amount in cash, the balance being left on mortgage. He camo to town and took a position which, with the interest froni the mortgage, which was not always met, he averaged about £700 per year in total income. .After he settled in town..lie paid litHe or no income tax, having lifd insurance payments to make, totaling .over £40. My attempts at 'adjustment between the two failed, and the mortgagee informed me later that in taking back the title and discharging his own mortgage he had made himself liable for arrears of land tax, and that in futuro •lie would have to pay over £15 annually .under that heading. Ho also stated that he would be very pleased indeed if. he were able to derive from'the farm an income of £700. It was'this gentle-* man's statement' which made me further examine tho whole position, and if 'Tho Post' can assist mo in setting out the taxation points in a better manner and yet be fair to all sections of the community paying diroct taxation (my statements are supported by actual cases) I shall welcome s«eh assistance." ' ■" •"'