Land Tax

Dominion, Volume 24, Issue 51, 24 November 1930, Page 13

Land Tax

Sir, —I agree with your correspondent, Mr. F. W. Mackenzie, that taxes on capital, are iniquitous, and that they decrease production./■'l must point out, however, that as land is not capital, a tax on land is in no sense, a capital tax. Land is the raw material to which labour and capital are applied to create wealth. All economists agree on this point. ;In agreement with Mr, Mackenzie' I suggest that taxes on capital should be abolished. There is no doubt that our present system of taxing imports, incomes, and various business instruments takes a huge toll from not only the farmer biit from all producers. As Mr. Mackenzie states, these taxes are. unfair in their effect.

. Take customs duties which last year provided 48 per cent, of the total revenue. This tax added 18 per cent, to the to,tai cost of imports, and was entirely borne by-' the- consumer without regard to his financial position. Tho only just system of taxation is one that will tax each according to his means, and I submit to Mr. Mackenzie that the only possible method of securing this condition is to abolish the present system and substitute therefor a tax on land values. Such a tax would lighten the producer’s burden. It would curtail the operations of the land speculator, who is the producer's greatest enemy, and would certainly make the large landowner 'pay more into the public purse than he does at present. It, must be remembered that a tax on land values is in no sense a tax on farmers.; Urban land Would be taxed as well as rural land, and as urban land is valued higher than rural land, it would be taxed heavier. With Mr. Mackenzie I agree that at present land is a poor investment in New Zealand. This condition arises not because of the land tax, but because of the inflation of land values caused by speculation. Speculation has led to the capitalisation of all improvements with the result that improved methods of production have, instead of benefiting the producer, proved a burden to him. Mr. Mackenzie is wrong when he states that the farmer is rated for the benefit of the motorists. The use of land is impossible without the aid of roads, rail-, ways, and other public utilities. lam sure that Mr. Mackenzie will admit the, justice of the principle that the land should pay the cost of constructihg tne, agencies necessary to its use. ... Contrary to Mr. Mackenzie I maintain that land taxes ate not relics of the past, but are the hope of the,,, (future. Their operation will, in curtailing the operation of speculators, stabilise land values and thus improve the status of the producers/ In conclusion it must be remembered that not only the farmer but every person who is rendering social service is a pro-, ducer in the true sense of the. word, and is entitled to consideration as such.—l am,, etc. , j ' Ohakune, November 20.