The Press TUESDAY. NOVEMBER 9, 1937. Land Tax Hardships

Press, Volume LXXIII, Issue 22245, 9 November 1937, Page 10

The Press TUESDAY. NOVEMBER 9, 1937. Land Tax Hardships

In his account of legislation which is to be brought before Parliament before the Christmas recess the Prime Minister mentions a miscellaneous Finance Bill, including a hardship clause to moderate the effects of the graduated land tax. This fulfils, of course, the promise of the Minister for Finance, who in his Budget statement announced the assessment of land tax on the same basis as last year, but with provision for relief from ** proved hardships. This is history repeating itself, as it is not yet 10 years since Sir Joseph Ward, in response to objections to the new scale of land taxation he had introduced, wrote in a hardship clause, under which more than 600 appeals were lodged and full or partial relief .was granted to more than 500 appellants. But it must be said that, in whatever terms the hardship clause is drafted, this method of correcting the incidence of taxation is imperfect, incomplete, and oblique. It is obviously a confession that the tax to which it is applied is an undiscriminating instrument and therefore an unjust one; yet the Government had as good reason to know this last year, when it reintroduced the graduated land tax, as it has now, on renewing the measure. Nothing has been said by the Government which justifies the use of the tax in principle; and any possible argument for its necessity is broken down, first, by the comparatively small and sluggish yield, which furnished at £ 1,048,000 only about 3 per cent, of total revenue, and second, by its anomalous and inequitable and positively vicious incidence. A hardship clause may be designed to save farmers or others from making or increasing a loss through paying the tax; it may go so far as to prevent the tax from absorbing money that ought to go into maintenance •or necessary improvement and development, and there are other possibilities. But it is impossible to imagine a hardship clause so drafted and so applied as to deal with the fundamental injustices of the tax. It is not the only or the worst hardship produced by the graduated land tax that a man may be called on to pay tax out of capital, or by starving his land. Less obvious, but not less real, is the hardship of taxpayers in one district who find that the valuation system makes their assessment much more onerous than that of another; and although the Minister for Finance paraded them as object-lessons for another purpose, the existence of farmers who are making good incomes without paying land tax or income tax only exemplifies in another way the hardship of those who pay either tax or both taxes. A hardship clause will not redress such anomalies nor remove the causes of them. It will not alter the essential character of the tax. Even now, having blindly reintroduced the tax, the Government would do better to suspend it than to pretend that it can be enabled to work well and fairly by a fiscal ambulance corps.