The Dominion. TUESDAY, AUGUST 16, 1910. PENALISING THE MIDDLE CLASSES.

Dominion, Volume 3, Issue 896, 16 August 1910, Page 6

The Dominion. TUESDAY, AUGUST 16, 1910. PENALISING THE MIDDLE CLASSES.

The discussion which has taken place recently concerning the Death Duties Act is of very much greaterimportance .than is generally recognised. The Act passed last session bearing on this subject is'only now beginning to receive that close analysis which alone can expose such weaknesses as it may possess, not merely in its application to specific cases, but as a matter of general policy. • With all respect to the At-torney-General, who has expressed himself as being tired of the subject, we feel that it is desirable to refer again to certain aspects.' of the measure. The member for Hutt, in his speech on the Financial Statement, reefcntly expressed his cordial approval of the Act as a democratic enactment, passed for the benefit of the poorer members of the community. Mn. Wilford is a , lawyer, and as such he must bo assumed to know something of the law. But if we read the Acts correctly, he was, to say the least of it, unfortunate in his examples of the beneficent effect of last session's enactment. For instance, he is reported in a recent number of Ilansard, at page 114, to have said: ■ ■ ' "Again every child is freed from estate duty on an estate 'up to ,£SOO and is only liable for estate duty to 1 per cent, on a'.£looo estate or ,C 10; whereas, under the old Act, tho child paid 2J per cent, plus 3 per cent., or 5J per cent, on i 6900, equal to ,£49 10s>" , . \ ' . ■ , Me. WiuoitD appears to have failed ■to notice the section (No. 34) in the old Act by which, half the duty expressed in the. scale ,was remitted when the persons beneficially entitled were children. or grandchildren of the deceased. He also.failed to notice that the 3 per cent, additional, undei\-the ' old Act, could only be charged when the beneficiary was a stranger in blood to '.the testator.. As a matter of fact, under the old Act, a child who succeeded to an estate of £1000. only paid 1 J per cent, on £900, or £11 ss. altogether. Having failed to notice these provisions Mn, Wilford naturally came to the conclusion, and embalmed it in Hansard, that in small estates (and by small estates he apparently included everything up to £5000) the new' Act was a' magnificent remedial measure.' We. are ready'to be corrected, but we. have gone to some trouble to take out the figures for the two enactments as'they affect the average Now Zealander of small or moderate means. ■ . - We do not think we will be contradicted when we say that the average colonist of moderate means makes his will in one of three waya. (aV He leaves everything to his widow; or (b) he leaves everything to his widow for life or until remarriage and thereafter to his children; or (c) he leaves everything to his children. We feel confident that if the members of the legal profession throughout the colony could be appealed to on such a matter the answer ; would be that 80 per cent, of the settlers make their wills substantially in one or other of tho above methods. That being -so,' we can • for our present purpose disregard ,the complicated provisions of the hew' Act respecting large , estates,' succession duties, and heavy impositions on bequests to distant relatives and strangers. We. have confined ourselves therefore to tabulating the duties payable. by tho representatives, of the average colonist after his death. The result is as follows: ; TABLE I. , All to Widow-(Estate under £10,000.) . ■' . Old Act. . Now Act. •"

A glance at "these tables will show, that except on the very small estates (of- which thanks to the indus.try of the people themselves there are not a great many) the old Act was less severe than the new Act which has been lauded to the skies by the Attorney-General and the largely-increasing number of politicians who swallow his Acts without digesting them. It may be necessary for the Government to have the increased duties, but with that we are not concerned hoyond noting that special taxation of this nature is always a risky thing and its effects difficult to estimate. Whab we do feel it necessary to refer to is "the constant reiteration by the AttorneyGeneral and his followers that the new Act has reduced the burden on the unfortunate- women and children. If our tables are correct, and wo believe they are, the practical relief is less than, nothing, and people of moderate property are worse off under the new Act than they were under the old. When Mr. Barclay, cx-M.P. and Government sUBDorUr. dxew attention to this in

Diinedin, his statements were scouted because the injustice ho referred to was perpetrated on a man who was not a blood relation of the testator. In. the tables, we have : compiled we have confined ourselves to estates of £10,000 or under in value, and those only in which the testator provides for his own -widow and family. - We notice, on further reference to Mn. AVxlfokd's speech, that he said: "Under the present Act from JEIOOO to i£2ooo' the percentage is reduced, while from i2OOO to JSOOO, ami from .63000 up to £MO, there is still a further reduction." A reference to the tables will .show that \ for the average man this is entirely incorrect,- and as a matter oE fact the duty payable by his representatives has in each case been considerably increased. Mr. Wilford remarked that. the member for Bruce was silent. Well might ho be silent after listening to such a string of inaccuracies. We cordially agree with the member for Hutt when he said that if every member of the House understood the Act better, there .would be less chance of misrepresentation. , We believe that the House has been induced to agree to a measure without understanding its incidence. It is difficult to- believe that the House, intended that; the duty on estates of from £1000 to £5000 should be increased, and it now remains to be seen whether the Liberal party will admit their mistake and have the matter rectified. If they are really.in the humour for a remedial measure they, might for one thing ameud the Act by providing that .in cases _ where a man of moderate means dies leaving infant children the duty is not collectable until the youngest attains the age of 21 years. Such a provision would enable a young widow to have the use of the revenue from the whole of her husband's property until her children were educated and able to iriEke their own way in the world, and ultimate payment could be assured by making the duty a- specific charge on some appropriate portion of the property. It is impossible to expect from v the present Government any consideration for those who are described as the "capitalist" class. Despite the fact that their capital is essential to the development of the,country they arc regarded as "fair game," and the harmful effects of the treatment accorded them is not considered, perhaps not realised, in the desire to play to the gallery. But the increased burden , placed on the smaller esfcates i as disclosed . above is quite another matter and will re-quire^-lot of explaining away. ■

O • © V & li §«■]}£ fc» -s t>3 § Sr 3 BO B £ . £ s. d. £ s. d. 1,001 Nil Nil. .Nil Nil 2,001 Nil Nil Nil -v Nil 3,001 Nil Nil Nil - Nil . 4,001 Nil Nil Nil Nil 5,001 Nil Nil 33 on £1\ Nil • 6,01)1 Nil Nil 4 on £1,001 40 0 0 40 0 0 7,001 Nil Nil 4J on £2,001 86 13 4 86 13 4 8,001 Nil Nil 43 on £3,001140 0 0 140 0 0 9,001 > Nil Nil 5 on £4,001 200 00 200' 0 0 TABLE II. . , . All to' Children or to Widow for Life, with Rcmaindor to Children. Old Act. ■ New Act: . , If 4 & JsiU t*s S na s So 8 p ■ 1 Nil ■ Nil Nil. Nil Unohe'd ' 101 1} on £1'. Fraction Nil Nil Unchg'd Decreases. 201 U on £101 £15 0 Nil Nil £1 5 0 ' 301 U on £201 2 10 0 Nil Nil 2 10 0 401 U on £301 3 15 O.Nil Nil 3 15 0 501 1} on £401 5 0 O.Nil£10 0 4 0 0 ' 601 U on £501 650 1 600 050 701 lj on £601 7 10 0 1 7 0 0 ' 0 10 0 SOI li an £701 8 15 0 1800 016 0 901 U on. £801 y tO 0 0 -1 900 100 Increases 1,001- 13 17 10 0 2 200 0 210 0> 2,001 13 35 0 0- 25 50 0 0 15 0 0 3,001 13" 52 10 0. 3 90 0 0 37 10 0 4,001 li! V0 0 0 3J133 6 8 63 6 8 5,001 35 175 0 0 OS 183 6 8 8 6 8 6,001 34 210 0 0 4 240 0 0 30 0 0 7,001 3* 245 0 0 4J 303 6 8 58 6 8 8,001 3J . 280 0 0 45 373 6 8 93 6 8 9,001 3i . 315 0 0 5 450 0 0135 0 0 10,001 3} 350 0 0 5J 533 6 8183 6 8,