The Press. FRIDAY. MAY 15, 1891.

Press, Volume XLVIII, Issue 7864, 15 May 1891, Page 4

The Press. FRIDAY. MAY 15, 1891.

It is annouueed from Wellington that the Government have now practically decided to abolish the property tax and substitute in its place a land and income tax. Until we are in possession

of the whole scheme it is impossible to estimate what the influence of the intended change will be, and what effect it will have on industry and enterprise throughout the country. But whatever the results are of the special form of taxation adopted by the Government, it is plain that a ohange of any kind must necessarily, for the time being, disorganise things and cause everyone to refrain from entering upon fresh enterprises. Wo have already shown in these columns' how disastrous the present agitation is upon the best interests of the people, how it is diminishing work, destroying confidence, and restricting trade.

In this article we do not propose to deal with the general question, but to point out rather a few facts ia connection with the proposed income lax, and how it may be expected to operate in a new country like this. Before doing so, however, wo may remark that the agitation against the property tax is probably largely due to hostility to any form of direct taxation whatever. Had the Government in 1879 decided in favor of an income tai in preferenoo to a property tax, the Opposition would t__we _ra.isecL precisely -fcT__e _3*a_D___s ox-y -w___.iclx lias been __xea_c<_L .! •: li II 11 from time to time during the last ten years. The inquisitorial character of the tax would have been denounced in the strongest language. It would have been held tip to execration as a clog on the wheels of industry. It would have been shown that it was not only extremely inquisitorial, but that it was a direct tax upon thrift, " because it would not only have charged a man upon the actual realised properties he possessed, but also taxed him in proportion to his capacity of employing the capital he possessed, and to his industry in employing that capital." As it was the property tax was adopted as being on the face of it the fairest tax that can be imposed, and ever since a section of the community have been crying out for a change.

We are not yet informed whether the income tax is to apply to all \cl__ses of incomes. The presumption \re that it is intended to make it general, aud not confine it alone to salaries and professional incomes. Under the property tax all clashes of property, whether in the shape of money, goods, or land wee taxed above £500. Under an incfrt-te tax the profits derived from property will be taxed instead. Let us see what this means. A farmer, a shopkeeper, or a trader generally has little diffiaulty in arriving at a fair estimate of what he is worth at the time he semis in his property tax returns. But* it will be quite a different matter with an income tax. Take the owner or occupier at a farm. VJnder the income ! tax he will be forced to keep an accurate account of all his transactions ■ for the purpose of arriving at his real ! profits. He will have to distinguish j between labor employed in the ordi- ! nary work of tbe farm and labor devoted to improvements. The one he will be allowed to deduct from hia gross income, the other frill not be allowed to be deducted. AU this will be a perpetual worry to him, because he will have to satisfy the tax-collector that his income is really what he states it to be. This means that he is liable to have his most private transactions exnosed to the Government

official who is responsible for obtaining the correct amount of tax from him. The same thing will happen witb every trader in the city. He will be liable to be called on to produce his boo_e, and disclose the whole of hia affair! to

the department, for without such an exposure the officer will be quite unable to arrive at a true estimate of his real inoonie. All this shows that an income tax would jjbe most harassing and inquisitorial in its operation. It would, moreover, open the door to any amount of misrepresentation and deceit. It may be the case that the property tax is sometimes evaded by dishonest persona. But it is selfevident that an income tax will plaoe a strong temptation before some to conceal their incomes. The mere faot that this temptation will be ever present will force the department to adopt much more inquisitorial methods to arrive at the truth than are necessary at present.

It is quite possible, we admit, to impose an equitable land and income tax, but such a tax if justly applied would practically be the property tax in another form; with this addition, that professional and similar incomes would also be called upon to pay. But if it is desired to include those incomes which escape under the property tax, there is no necessity for bringing about a revolutionary change in our system of taxation. Suoh a land and income tax would, of course, be open to the charge as far as it applied to incomes from trade and so forth of being inquisitorial and vexatious. But it could be imposed in an equitable manuer. If, however, we are to have an income tax and a progressive land tax, no matter what the progression is, we shall have departed from the path of honesty whioh may shortly lead to a policy of downright publio pluuder. If in addition land as land is to pay, and the income from tbe land is to be taxed also, it is self-evident that we shall have administered a blow at the progress and prosperity of the colony, the eliects of which it is quite impossible to estimate.