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Press, Volume XII, Issue 1588, 9 December 1867, Page 2

Anotber serious objection to tbe income tax arises from tbe manner of assessment. Englishmen, unlike Americana, insist on tbe most absolute secrecy being observed as to the returns made to the Income Tax Commissioners, and it is notorious that under cover of this secrecy the revenue is systematically defrauded to a very large extent. Under the schedule which comprises incomes arising from any profession, trade or employment, it has been calculated that the fraudulent evasions amount to fully 30 per cent, of the sum that ought to be collected. Whatever payments are thus evaded fall of course as an extra burden upon those who do pay, so that the dishonest man profits at tbe expense of the honest. So long as the principle of self-assessment combined with secresy is maintained — and the publicity that seems matter of course in America would never be endured by any English community— it is perfectly certain that the temptation to fraud will prove irresistible ; and the tax is thus open to grave objection on the score of its being a; direct and powerful incentive to! immorality. On account of this ten- J dency, as well as of its unavoidable! inequalities, the most eminent finan-] ciers, especially Mr. Gladstone, while j conscious of its extraordinary power! in assisting a country through a period of great national emergency, pronounce it unsuitable for a permanent place in the financial system. Now the objections taken to the income tax in . England would, we believe, apply with still greater force in New Zealand. We believe that in the colony where, as a rule, men's incomes are more fixed than they are in the mother country, the inquisitions of the tax would be found much more intolerable, that it would be much more extensive to collect, and would be even more frequently either wholly or in part evaded. We doubt the propriety of introducing a tax which exposes those affected by it to so strong a temptation to fraudulent dealing. Yet by some means or other revenue must be raised. It is idle to talk about reducing the Customs until some means have been agreed upon for filling up the void left by the duties remitted. We are not referring to such small reductions las could be the result of a saving in expenditure ; our object is the creation of a fund which might be applied to an extensive remission of taxes. Such a fund might, we think, be advantageously supplied by a property tax. A tax on real property is not liable to the objections we have just enumerated against the income-tax. It is not inquisitorial, for it enquires into nothing that is not commonly known. Payment of the full amount of the tax imposed could not under any circumstances be avoided. And, to crown all, the cost of collecting it would be almost nil, for the needful machinery exists and is in operation already. Over much of the country properties are periodically assessed for the purposes of local rating, and the valuation of municipal bodies or Boad Boards

would be available for the property tax, which might also be collected through their agency, thus reducing the cost to a minimum. The last is an important point, for in all taxation it is desirable that as little as possible should be exacted from the people over and above what is required for the uses of the State. The collection of the Customs costs about five per cent.—that is, the country is taxed some £45,000 more than is necessary, to cover the expenses of the Customs establishments. The incometax is collected in England at a cost, if we remember rightly, of nearly seven per cent., and in -few Zealand would probably cost nearer ten. The charges for the assessment and collection of the property tax, on the contrary, supposing the work performed by the Municipal Councils and Road Boards, would be trifling. It must be borne in mind that the tax would attach to the fee Bimple of the land, and would fall upon the owner ; differing in that respect from a local rate, which is paid by the occupier. Every j property, whether the owner was resident in the colony or not, would be subject to taxation; and to meet the case of default on the part of a non-resident, we would insert a clause in the Act empowering the Government, if the tax remained unpaid beyond a certain time, to recover it by selling the property. The next question is—what would this tax realize ? We cannot give any exact answer to the question, not having the requisite data, nor do we know that any sufficient materials on which to base a calculation are in existence. An examination of all the municipal and country assessments in this and other provinces would supply some portion of the necessary statistics, enough, no doubt, to afford ground for a tolerable .guesss. But taking the whole of the real property in New Zealand, throughout both islands, at the ralue of £5,000,000, a tax at the rate of 5 per cent, or Is. in the pound would yield £250,000. That sum would be employed in the reduction of the Customs, by repealing or greatly lowering the duties on necessaries of life or articles in common use for purposes of utility. The general effect would be to considerably lighten the taxation on the poorer classes, on whom it is now disproportionately severe, and to throw more of its weight upon others who are now too leniently treated and in some cases altogether escape. There remains however one class who will still enjoy almost entire immunity, namely those who do not invest capital in land but put it out at interest. A stamp duty on mortgage deeds would reach these investments and lay them also under contribution to the Colonial Treasury, bringing in, according to our estimate, an annual addition to the revenue of £50,000. In a few years, in all probability, the Customs, partly by the increase of population, but still more by the removal of restraints upon trade, would recover much of the abandoned revenue, creating asurplus which might be usod to make still farther reductions. A judicious mixture of direct with in direct taxation would thus secure a twofold advantage —it would confer great social benefits on the people of tlais colony, and at the same time fcteighten the value of our indirect taxation itself as a financial engine, by making it less burdensome and more productive.