The Press Thursday, September 19, 1929. The Taxation Amendments.

Press, Volume LXV, Issue 19728, 19 September 1929, Page 10

The Press Thursday, September 19, 1929. The Taxation Amendments.

The Land and Income Tax Amendment Bill discloses some features on which it is pleasant to be able to compliment the Government The proviso added to Section sixty-five of the principal Act justly discriminates, for purposes of taxation, between land owned and land which a mortgagee has entered into possession of, and retains (up to five years) possession of, solely to further the realisation of his security. On the Commissioner's being satisfied, he is to assess the mortgagee "separately in "respect of the estate or interest of " which he is deemed to be the beneu ficial owner." It is also a sound beginning, in the long overdue removal of special privileges and exemptions benefiting State Departments, that the Public Trustee and the General Manager of the State Fire Insurance Office should be brought under liability for land tax; bnt approval goes paired with the hope that the Government will not sink back exhausted by this initial act of virtue and courage, and allow bureaucracy to maintain its innumerable other defences and means of aggression. To return to the Bill, however, it must be said that it remains in essential respects the instrument of s damaging and disturbing and undiscriminating policy. Though the Prime Minister has been so far responsive to protests as to raise the unimproved valuation level at which his new taxation begins from £12,500 to £.14,000, and has thereby earned the qualified thanks of the marginal group, the revised figure is still iniquitous. To speak of Canterbury alone, it will press heavily here on farmers holding farms of quite moderate size. Such farms are in general efficiently run. Nothing would be gained by subdivision, if subdivision could be effected at all; and, quite clearly, nothing is to be gained by embarrassing producers who are working bard to make ends meet. Similar arguments apply to larger holdings of poorer land. If we may assume for the moment that the Prime Minister's major intention is to promote subdivision and settlement, then it is fully evident that the means and the end are most imperfectly related. The means will not secure the desired end, or will secure it only irregularly, wastefully, and with all sorts of disastrous consequences. The Leader of the Opposition is right when he says that the first step in furthering any general policy of subdivision now must be a sort of qualitative and quantitative land census; and the process of taxing men into subdividing—if taxation ever, indeed, should be used for the purpose—most decidedly ought not to begin before it is quite clearly determined what lands ought to be subdivided, and into what areas they should be broken up. The introduction of a hardship clause is a concession of dubious value. Existing hardship clauses are inoperative, and a new one is not likely to be more effective. The only principles it is safe to follow in taxation are principles which, when heavier exactions are necessary, will distribute them according to the individual's capacity to bear them. The land tax, whether as a of finding extra revenue or as an instrument of the Government's nebulous settlement schemes, cannot possibly so distribute its exactions. It can do nothing but create hardships and introduce anomalies, less here and greater there; and it will be beyond the power of any Commissioner, assisted by any trio of assessors, to evoke justice and equity out of the confusion it will cause. It is impossible to adjust what is radically wrong. For a final point, the clauses at the beginning of the Bill, which define taxable farm lands, are not at all clear, and may be the cause of some contributory injustice.