LAND TAX PROBLEM.

Auckland Star, Volume LXVII, Issue 217, 12 September 1936, Page 13

LAND TAX PROBLEM.

"CONFISCATION OF CAPITAL"

LABOUR GOVERNMENT'S BUDGET

As might be expected the leading article in the current issue of "The Accountants' Journal" (official organ of the New Zealand Society <of Accountants) is concerned with the Government Budget. "Reintroduction of the graduated land tax on the scale proposed by the Budget is, in our opinion, a mistake in policy and is not warranted, either in the case of rural or urban properties," the writer remarks. "Theoretically, the idea is to make owners of unimproved property, and especially owners of land which, by reason of circumstances, has acquired what might be termed community created value, break up their holdings. But what are the facts when we examine the position? "With few exceptions the individuals or companies owning lands in our cities or in the country are now using their properties to the utmost economic advantage. In most cases it is needful for- them to hold large blocks by reason of the nature of their business. Some coanpanies find it necessary to trade in various centres. They are already penalised by reason of the graduated income tax. Why should they be still further penalised by ft graduated land tax on land which they are not holding for purposes of speculative profit, but only for the legitimate conduct of their enterprises? "During the depression period hundreds of landlords, moreover, received little or no return from properties. Now that rents are improving a heavy graduated land tax is to be imposed which will more than absorb any increased revenue. No one can seriously complain about a tax on income, but in many cases the scale of land tax will really represent confiscation of capital. When the graduated land tax was imposed previously an allowance of 5 per cent on the unimproved value was made for the purpose _of income tax assessment, but there is no indication in the Budget address that this course is to be followed, although a subsequent statement in the Press by Mr. Nash would indicate that the matter is to receive further consideration."