The Press. THURSDAY, JULY 11, 1889.

Press, Volume XLVI, Issue 7359, 11 July 1889, Page 4

The Press. THURSDAY, JULY 11, 1889.

The House yesterday afternoon very properly decided to postpone the further debate on the property tax till the House had an opportunity of considering the Property Assessment Acts Amendment Bill introduced by the Government. For the Bouse to have affirmed that the tax should be reduced in amount annually till it was done away with altogether, withoutat the same time deciding upon the tax to be substituted or pointing out a way of doing without the-revenue, would have been exceedingly unwise. Most people will agree that the property tax tends td keep: capital out of the country. A source I of revenue which produces £350,000 per annum to the colonial exchequer must obviously be taken : into consideration by everyone who proposes to invest hie capital here, or who contemplates settling permanently in the colony. Taxati6n of any kind, even indirect.taxation, must influence investors in their: choice. An indirect tax, it is true,,' would not directly affect the person; seeking to invest his capital in the colony. Inasmuch, however, as tjaei borrower can only produce so much in-' come from his land or his factory, if he is heavily taxed his ability to use borrowed money is to that extent affected. The property tax, being direct in its incidence and levied upon property in the country, whether local or foreign, must, as a matter of course, exercise a very considerable influence upon the minds of those who look to the colonies as outlets for the investment of their surplus capital.- If direct taxation could be done away with altogether, it would be an exceedingly good thing for New Zealand. It "would largely stimulate industry and enterprise, and assist materially in rendering permanent the era of prosperity upon which the colony has entered. This, however, is only saying in other words that a. reduction in taxation is desirable. But it is one thing to affirm that such an object should be resolutely aimed at, and quite another to show that it is practicable. To substitute for the property tax a land and income, tax, producing the same amount, would give no relief. The alteration would no doubt, touch certain incomes not derived from property, and would reduce by the amount obtained from that source, the sum demanded from invested capital. If it were considered expedient to relieve property in any way, professional incomes could be taxed without altering, in other respects, the existing system of direct taxation. The question between a land and income tax on the one hand. and the property tax on the other, narrows itself down to this—ln what respect would the change prove beneficial} If the proposed tax is to be equitable in its incidence, it must be so levied as to produce much the same results as. the property tax. In other words, it would have to be a property tax in reality, if not in name. This, however, is not what the majority of land tax advocates mean. They aim at something very different. The owuers of land, as we have repeatedly shown in these columns, are by them regarded as object* of special, and even penal, taxation. Those who are engaged in the great staple industry of the country are to be punished for having invested their

capital in a pursuit upon which the progress and prosperity of the country mainly depend. It has been said, as we have just seen, that the property tax tends to keep capital out of the country. Would a system of taxation, obviously penal in its character, attract capitalists to our shores? What is the form of investment which immigrants usually contemplate when coming to a new country 1 In nine cases out of ten they are attracted to the colonies by the hope of becoming the possessors of a few hundred acres of land. Wβ in New Zealand are naturally proud of our fertile soil and our splendid climate, and never miss an opportunity of bringing these attractions prominently before the English public. We have altered our land laws from time to time with the same object, till at length we are of opinion that we have on our Statute Book a land law which is perhaps the I most liberal in the world. All this i has been done because we want population to come to our shores, and to I settle upon the still unoccupied lands in the hands of the Crown. A land tax would not only neutralise the beneficial effects of our existing laws, but would assuredly tend to drive the present occupiers from the soil and send them either into the cities, or force them to leave tbe country altogether. There is just now, we are aware, a strong feeling against the property tax in some parts of the colony. That feeling has arisen to a considerable ex-" tent from the fact that the Assessment Act requires amendment, such amendments, in fact, as the Government propose to effect this session, and when the amendments come into operation the opposition to the tax, it ia to be hoped, will die away. Apart altogether from the fact that it would be the height of folly to tamper with our taxation laws at a time like the present, the change if effected would transfer the agitation from one part of the country to the other. The last assessment fell heavily upon seme of the speculators in suburban sections in some of the northern towns. A land tax would fall with crushing effect upon the hard working occupiers of our rural lands. They would then be taxed, not upon their actual interest in tbe property they possess, but upon an interest which in numerous cases belonged to some one else. We do not imagine that the Legislature will now or at any future time venture to inflict such a . damaging blow at the great source of the colony's wealth. We admit the burden of the property tax, and would be glad to see it removed. And the only way of bringing about this result is to adhere firmly to the policy of economy and prudence. We are at length within sight, at any rate, of the possibility of a reduction of taxation. A good deal has yet to be accomplished before that welcome relief is obtained, but a resolute adherence to the course upon which we have entered will assuredly bring it about. To blindly change from one form of taxation to another would simply lead to confusion, and in all probability land ua in some great disaster.