SQUEEZED.

Dominion, Volume 1, Issue 68, 13 December 1907, Page 5

SQUEEZED.

• _■■■■ • __ i. GREAT INCREASE OF LAND TAX REVENUE. ASTONISHINC RESULTS FROM LAST SESSION'S LAW. WOES OF THE LARCE LANDHOLDER). 'l'ho land tax revenue tliis year will dwarf the revenuo of any previous year. This was expected by the 'Land aii'd Income Tax Department as 'the result of ' tho operation| of Sections 13 ' and .14 of the now Land and Income Assess 'ment ; Act, which weio' intended to smito heavily oiyners of large estates who li.iva nominally sub-divided their areas among the; members of their families,' with the objecf of bringing them undor the lower scale of taxation. But the Act has smitten to mora I purposethan even tile Department expocted. Tlie Department's estimate of the additional revenue which ivould accruo as the'result of the new'law, though declared to bo exaggerated when. tli.o_ Bill. was .before .Parliament, has proved itself, .now that the actual collection is boing mrtdo, a long way short of the ■. mark. The actual figures of the increase art hot obtainable, 1 and we aro informed, on high authority, that it would bo impossible tff gauge the • amount;: within £10,000 eithoi ; jyny, .which eloquently indicates the,.extent •o'rtlio increase.' : ■'■Evasions-'-Ms tho-Departmental-namo foi tho nominal :sub-dh'isions which 'the'.new Act? 1 1 ondeavotirs drastically to'stop. Tho owner of many acres was in such Cases accustomed to. 1 . cut bhom up among his sons and daughters,) ;Sons-in J law-' and' 1 daughters-in-law,, aiitl as ..many ~gthqf,relatives as'. he could bring in, and this was often dono so that the estat? remained- entire,-not-a boundary fence "ciCcted.; Tho sub-division, though legal, was frequently quito nominal, but ;it hall the' effect of bringing tlm'property under a lower sealo .ofi assessment for purposes of taxation. Clauses 13 and-14 of the new Act havel changed ail that! They provide, briefly, that joint- ownoiß shall be assessed (both jointly and severally,, and that joint occupiers shaD' be liable as if they were joint owners. The , broad principle upon •which the Crown claim t to act is that only such sub-division sliall ba' recognised as "actually brings' about closer! settlement; - whether-the tiew*--settlers bo- . members of the family or outsiders does matter. ''•'... | Tho following example shows' the onormont' efl'ect of the new law. tinder the old system,' an'cstatC Worth £140,000 might be nominally i sub-divided among a ' family of ten, wW would then pay graduated huki tax at the rate of 5-16 d. in tho £, or a total yearly taxation of £182 ss. lOd. Under the new Act the estate would bti liable, as a single*' property, to a rate of 28s. per cent., which* would make tho total yearly contribution to; rovonue no less'-than £1960. Under tho old;' 1 la\r f ,thc larger number..of.children an.estate' was nominally ; divided among, the greater would be tlie escape from duty, tho rate of assessment diin,inish'iug with- she. contracting area of the sub-dhnsions. " ' ' It was a-very, difiictllt tliilig f6r the Department to estimate what tlib inefeaSo of ' revenup .wolilil bo'tinder the liew scheme, as it'did ; riot. Itnow the extent, to wliieh subdivision was taking plate. We are informed, on tho best" aiitliorit-y," that the figures' for tho present year's lafid revonuo show that i the .Department had no conception, of tho oxtb'nt to which' it was going '.on..' It is - only now, when it is beginning to work out the ~ accounts, .that the. ipractjce can i)o traced, and overi now the Department does not know its full extent, becalisii tiio nctf' Act was only passed th'rfec or,: fnur' weeks before tho collection of the'tax was commenced. In the next foiv months a- good .many 'cases will ho investigated,'" bnt already it is clear that, instead of'having exaggerated tlie increased ; revenue which the new provisions would, bring nboutj the Department understated, it onormo'ubiy.' No time was givaii by tho Act for genuine sub-division...of estates before the new law came into foi'ce, and tlie Department feels that it lias scored decisively.' It is considered ■ <juite certain','however, that ti good many of ■-• th'e, large' land-owners will not continue to ■pay thi present' htavytax for many years. year there ©ill be many "real" subdivisions, and the Department's•> rcvehiio in consequence, will notl+ach the . abnormal height it will attain this year. But the Government will have succeeded iii driving tho ' large landholder off his holding ' aiid in 1 1 breaking up the large estates.