Wealth and Taxation

Dominion, Volume 24, Issue 182, 1 May 1931, Page 11

Wealth and Taxation

Sir, —Your correspondent, ’’Adhikari,” in to-day’s issue, ridicules the idea that if what he calls “wealth” is taxed sufficiently any good can come to Labour, and then goes on to refer to the deflation of land values as an example of decreased wealth. The common sense he boasts of should tell him that deflation of land values is only a dropping of the hind rents, which are paid by the land users to those who do not use it. The mad Innd system which enables all advantages of increased prices or reduced costs in farming operations to be capitalised in land values, and so increase the rent paid by the land user, not only deprives the user (farmer) of those advantages but exposes him to terrible risks when the prices tend to drop or costs increase. The worst of it is that not only the farmer suffers when this takes place, but he tends to pull all others in with him. If “Adhikari” would use his common sense, he would see that a properlygraded tax, based on original land values, would have stopped the disastrous inflation and provided the State with a revenue enabling it to build up financial reserves to meet times like these. I suspect, however, that tho, unfortumitly, only too common sense of “Adhikari” caused him to throw up his hat for the freehold (the most insecure of all land tenures) and the rights of farmers to buy and sell farms ad lib, and that he damned every land tax proposal as “a tax on the farmer.” It ill becomes him to throw stones at the Labour Barty when he admits that in the last ten years the national debt increased by fifty-nine millions! local body debts by thirty-eight millions, “and mort gages likewise.” For the two first items the farmer and the country generally have been getting something in return in public services. . For the last of his three items, enn his common sense tril “Adhlkari” what tho farmer or the country got?—l am, etc., ROBERT HENSHAW. Wellington. April 28.