The Press. FRIDAY, JUNE 19, 1891.

Press, Volume XLVIII, Issue 7894, 19 June 1891, Page 4

The Press. FRIDAY, JUNE 19, 1891.

No wonder people are anxious to understand what Mr. Ballance means and expects to do by means of his proposed laad tax. His explanation of it occupied a considerable portion of hie speech, and he has since supplemented the explanation in answer to an interviewer at Wellington. It does not, however, appear to us that the real working of the tax has been by any means fully laid beforo the publia Wo will try to see what it comes to. In his Budget speeoh Mr. Ballanoe explained the matter as follows:—"We propose," he said, "to introduce a Bill to abolish the property tax, and to provide for a land and income tax, and ia respect of the land tax to grant an exemption on improvements up to the value of £3COO for each owner, and also to impose a graduated tax upon all persona and Companies the value of whose land, less £3000 of improvements, ehall amount to £5000. . . .

In addition to the deduction for improvements there will be the exemption of £500 from an owner's land, and it ie not proposed to grant the exemptions when an owner's laud, less deductions he may claim, will exceed £1500. Thus, if a'farmer has land worth £800, the improvements on which are valued at £300, the exemption would make him not taxable. " With land worth £1200 and improvements £400, the balauce would be £300." So much for the Budget speech. In conversation at Wellington he is asked whether improvements are simply to go untaxed " or whether he intended to deduct the value up to £3000 for improvements from the unimproved taxable value of the land itself, as well as a primary deduction of £500." In answer to this he says, " The value of improvements is. deducted up to £3000." And then he give! the following illustrations—"A farm is worth, improved value, £800. If the improvements are £300, the farm is not taxable, for the £500 exemption has to be taken from the unimproved value. If an estate is worth £500 unimproved value, with improvements £1500, it would not be taxable. No improvements are taxable below £3000." We suppose we must take this explanation as making it plain at last. The whole difficulty has arisen from Mr. Ballance's singularly involved method of stating what he intended to do. If he had told us plainly that he intended to impose the tax upon land of above £500 unimproved value (the £500 exemption not to apply when the unimproved value exceeded £1500), and in respect of such land to grant an exemption up to £3000 for improvements, and besides to impose a graduated tax where the value of the land, less the improvements, amounted to £5000, he would have said in this short sentence —and said it iv a way that everybody could understand—what we suppose we must take to be the meaning of the long explanation with which he favored the House in his Budget speech. In the farther course of hie speech, Mr. BjILLANCB gave some illustrations of the relative effects of the present system of taxation upon the wealthier and poorer classes. According to his showing, the working man earning 39s a week, or £101 per annum, is paying through the Customs £11 11s 5d in the chape of taxation, and an artisan earning 53s a week, or £137 per year, is in like manner paying through the Customs £12 10s 4d in taxation. From i

this, however, Mr. Ballanck does not propose to rolievo them. Hβ puta off avowedly to a future day any attempt to meddle with the Customs duties. What ho does say is that, if the working man be thus unfairly taxed, he will, at all events, give him a companion in misfortune, and on the prinoiple, we suppose, not generally recognised, of two wrongs making a right, he will tax another class of the community beyond the proportion requited from the rest, and will thus draw from a comparatively small number of taxpayers a large sum in an unjust form. But what wo do not understand ia how the working man is to be helped by it. Hβ is to pay his £11 or £12 a year just the same, and he is to pay it out of his £101 or £137, as the case may be, if he is lucky enough to continue to receive so much in wages. If this is the kind of legislation which is to satisfy the views of the working men of the colony they are thankful for very anu»ll mercies.

Nor is this the only part of the scheme of which they have fail* reason to complain. It has been pointed out by oao of the shrewdest observers probably in the House, Mr. E. G. Wright, the member tor Ashburtou, that tho scheme must act adversely to the employment of labor in another aspeot. It will have been seen that while it professes to exempt improvements it stops short as soon as the improvements amount in value to £3000. Now there is an important class of the community who have employed their means, and thus iucreased the value of their property and given wide employment to labor by a systematic and unstinting expenditure in improvements. These are, as Mr. Wiught says, " some of the most valuable and hard working classes in tho colouies." This class will be " hit hard" by the new scheme. They will be at once exposed to the highest scale of the graduated duty, and they will uot be relieved beyoud a limitod extent by the groat value of their improvements. This must have its effect in reacting upon the labor market. For everyone who thus expends his money in improvements there will be a hundred directly, and far more indirectly, whose living depends upon those improvements going on. But the new tax literally makes it penal upon the employer to continue to do anything of the kind.

Now, these are not accidental resulta; they are consequences deliberately accepted by Mr. Ballancb as part of bis scheme. He gives us no reason why the exemptions should stop short just precisely at the point at which it is most important to the wage-earners of the colony that it should continue. He has also overlooked the face that his penal taxation on the improvement of land will lead, and necessarily lead, to a stoppage of all such enterprise in future. If a man is not only to be taxed, but taxed progressively on his expenditure in improving hie land and makiug it productive, he will, in self-defence, stop such improvements. This must still further diminish the demaud for labor throughout the country, and drive another batch of our workmen to another colony. Not* will this be the only result. The value of such land for taxation purposes will necessarily fall. The revenue anticipated will not be received, and when this is discovered, the net, as Mr. Rhodes pointed out, will have to be co spread as to catch most of those whom it is at present proposed to exempt. The knowledge that this will almost inevitably be the outcome of the taxation proposals will also operate in limiting expenditure on improvements by those who just now are attempted to bo bribed into accepting the scheme. The whole tendency, in fact, of the land taxation proposals of the Government is in the direction of crippling enterprise, and consequently diminishing the wages fund. This is the inevitable result when a country enters upon the daugerous policy of plunder, be that plunder in the tirst instance confined to a small minority. Some may acquiesce in the crime, but they will be shrewd enough to see that their turn is probably, coming next, and they will take very good care to be prepared for it when it arrives. They will confine their expenditure to the narrowest limits, in more self-defence, with the result that the demand for labor, lamentably umali as it is now, will continue to diminish till the whole country is reduced to a state of hopeless depression and despondency. If those in the House who claim that they are especially charged with protecting the interests of labor cannot ace this, then we assert they will display a lamentable iguoraaoe of the true interests of those who sent them to Parliament.