LAND AND INCOME TAX

Auckland Star, Volume XLVII, Issue 158, 4 July 1916, Page 7

LAND AND INCOME TAX

-—— Q ■ MORTGAGE TAX ABOLISHED. CONCESSION MEANS £150,000. T 0 BE SAVED FROM EXPENDITURE. jaiESBING. CLAUSES INSERTED. PROPOSALS DISCUSSED IN HOUSE. _ Xelegrapli.— Parliamentary Reporter.) WELLINGTON, Monday. Several amendments dealing with difficulties which arose while the Land and Income Tax Bill was in committee were introduced by Sir Joseph Ward to-night. fie Finance Minister, in the course of explaining these amendments, remarked in respect of the native land section of the bill that the question was raised as to definition of "half-caste" and "natives"' in the bill, which it was contended was calculated to put native land in a different position for taxation purposes than jnder the present law. He therefore proposed to have half-caste omitted from the definition. Another point raised was relative to the deduction of the amount of mortgages from land tax, which was omitted from tho bill a* it ■scent before the Committee. He proposed therefore to insert an alteration in clause 49 restoring exactly the privilege now possessed by the taxpayer in deducting from unimproved value of his land the amount outstanding in respect of mortgage. He also proposed that the exemption of mortgages from the niortcase tax should be continued as he proposed in the first place: that is to say. ii the legislation in the bill was passed mortgages would not be subject to taxation. Sir Joseph -went on to say that these various concessions would mean from £150,000 to £170.000, but after having gone carefully into the whole matter he expected to recover the amount by saving expenditure to that extent The Government would therefore ie able to frive this great benefit in valuation of the mortgage tax. which might fall hard on those who had mortgages running over a period of years. The Minister added that a new subclause was proposed to section SS for the purpose of preventing tho taxpayer from obtaining double deduction for assessment of income tax respecting mortgages on his land. SPECULATOR AND AGENT. Mr Payne asked if it -was tho intention of the Minister and the Government to exempt from assessment profits made by a farmer who might buy and go on a farm for the sole purpose of selling ir, and who at the end of. say. twelve month; sold at a big profit. Si Joseph Ward said a sub-section of the bill referred to was intended specificaur to deal with land agents. If a land speculator who was not a land a.gent purchases land to make a profit.' then he ■raid come under ordinary income tax 1»t. The provision in the bill was to make sure that land agents should also fee responsible under the law as it stood, otherwise the operations of the land agent would be left out and he could not be compelled to pay taxation on them. ON THE PJGHT TRACK. Mr Witty congratulated tho Minister on carrying out the promise to dispense •nth the mortgage tax. If any deficiency could be made by distinguishing between earned and unearned incomes' it would De greatly favoured by the country. *Jo-g asked if the small farmer Wold get the usual deduction from the "ramaxy land tax when the mortsase tax *as done away with. Mr Sdey declared that mortgages were iigta hecause of the mortgage tax ftWJBon ought to be made "that the w ld set the benefit of thr '

wnt had made no effort to secure part « the unearned increment upon sales « Property. This would tve taxation vie ciirae of land speculation. ft. • w h said the Minister was on Je right track in putti a tax to go further and reduce the XeT £Is ° - h? - i-omes were

TOWN AND COUNTRY, flat JT ki i ISOn «P r «**d the opinion' ?** «*tead of the Government being i too generous to the farmer, the hoot 4italr £ r f ° ot - and fa ™ urp d the £l* ,? c farrnpr m 'th land worth WH i would pay in land tax and graduSt?',° Ver £33 ' whprp V tho capiwfct paid nothing. ' ir'Sf, " P ° intin ? out how the tioTL tpm S faV ° Ured undf "- o«r tax*. mm I ad?nJV ompared With busin «* last ZT- % h " m a rflt »™ prepared "'" heforp thp *ar tho <* w 'tr™r orpd pro^rt >- 33 <i £36 l// ,r m in ™ mf tax P a d £3(1 Id/ J. h,le lhr farmed country r1 A (SC ' ornfl,l !a from l °* the tIT c ' Unher instances ot * their™" CaPed taXation * >rior Comin. to « ,TS in thp H «-- nB »- - red P tT P r; d taxatinn - Mt K W„ fe ;.r fitS lMt 3-ear to «°« revenue I, ntnbution6 to th(> taxaTr / hMP wre only ***& for then, 1 " farmPrS wh ° •* & r and ihp raaji * h ° Clie "t- (W KOt a fOOI f °r a trlearty laughter.)

PREMIER EXPLAIN'? *^ r t a l„u1 dedarCd that Mr Gilford ** tabt W S iae !| in quoting tt »t taxafi ,' oWpd jt t0 be pawned o "a™° a n , of , cit >- was based tio * ft ?' Ue ' but the real P°siaetoal f taXarion based on barter of !?, Ver ' which mi be ti °n yaWn \ mi ! llon on a sec**«S?on , 5 0 00" CoUntl 7 1-nds v un:m P roTe d value in older tal.cn" to objection could eoaed Leomtf c f c " Uatln S uni]hlt *K*TT,' in Xew Ze aland tc fced Hvin ° I !T rCd ClasS Some ha d "f none, eL^ 01116 from te ey earned by a lifetime of hard

s A WORTHLE. ss SUGGESTION. taid »c bel3 ar , d '/ L eplyin " to criticisms, tha norw VCd that if ik ww found * ftefc Were taki °S advantage to P D ° f from to squeeze an extra half per

cent from the mortgagors, the House would be unanimous to pass drastic legislation to deal with the situation. Dr. Newman: Is the idea to keep down the price of money? Sir Joseph Ward: Yes. I think it is a good thing to endeavour to keep down the price to a reasonable extent and proposals in another bill will also 'be in the same direction. Discussing tions to reduce the exemption" limit" in the case of unearned incomes from £300 to £1.50. the Minister said that the effect of starting income-tax in this country at £150 would mean brin«in° into existence 200.000 extra taxpayers! While allowing a fair average between £150 and £300, the Taxation Department would get altogether £97.000 more than at present. It would not pay the cost of collection. The result, so far as the net increased revenue was concerned, would be so worthless that it would lie only doing a stupid thing to introduce such a change. ON THE SAFE SIDE. He hoped the House was not goin<r to expect that any Minister who for'"the time happened "to be Finance Minister should be guided by what they were do|ing in England in" this war." It would Ibe a most misleading thing to do. They I wore exempting people in 'England whom Iwe Wore including. The Minister went jon to say that "we wanted a certain j amount of money, and it was a question jof what the Government thought was ; the best way of getting it. ' It was : absolutely necessary to get tho amount !of money named in the Budget for war | purposes, and in all probability more. . Estimates, he pointed out, had "in every joase been deliberately calculated on the j safe side, and they would not have i abolished the mortgage tax aud restored tho deductions unless they I thought it was a safe thing to do. ! Further consideration of the bill in Committee was completed, and the bill was reported with amendments. The House adjourned at 11 p.m.