GRADUATED LAND TAXATION

Dominion, Volume 30, Issue 296, 10 September 1937, Page 13

GRADUATED LAND TAXATION

Farmers’ Leader Replies to Minister

“INCIDENCE IS ENTIRELY

UNFAIR”

A reply to the Minister of Lands, Hon, F. Langstone, who, on August 14, issued a statement in defence of the graduated land tax, was made yesterday by the Dominion president of the New Zealand Farmers’ Union, Mr. W. W. Mulholland. Mr. Mulholland’s statement was endorsed by the Dominion executive of the union. “The Minister of Lands stated that the purpose of the tax was not to bring about the cutting up of large, valuable country properties, but to provide a return to the State from the individual or company, relative to the benefits derived by him or them through being the owner or owners of the land subjected to the tax,” said Mr. Mulholland. “As people who own all sorts .of other property also derive benefits through being the owners of that property, they should, if this argument is sound, also be subject to tax upon that property, otherwise why should land be singled out as the only property to be subject to direct taxation? Land Booms. “That the Minister feels his argument is weak is to he gathered from bis further contention that, after all, the amount, collected in land and graduated land tax is a very minor with taxation derived from other sources. He also shows that be feels the need for further justification when he says that a just land tax, in addition to providing some revenue to the State, has a significant bearing in preventing Jand booms and speculations in the community values created by the general and progressive development which is continually taking place. What is there in the' taxation of land that goes to prevent a land boom —unless the Minister is prepared to tax away the whole value of the land? The graduated land tax, not, it is true, on the penal scale at present in force, wa's in operation during the years 1918 to 1921, which saw the greatest land boom in our history. “If the Minister really desires to prevent speculation in land, which is the cause of all land booms, he will repeal the land tax entirely, but. place a. profits tax on land transactions with, ot course, suitable exemptions, so that, profits cannot be made out of dealing in lands. This would effectively prevent land speculation, without penalising the genuine farmer. “It has been shown over and over again that the taxation of land values is entirely unfair in its incidence and the amounts levied on taxpayers bear no relation whatever to their ability to pay. This unjust incidence is enormously magnified by the operation of the graduated principle. I have, for instance, papers before me concerning a property which last year was called upon to pay £l9O in land tax and this year is asked for £lOO. There is no difference in the property whatever, but in the interval a new valuation has come into force.

“Unjust System.”

“It is unnecessary ror me to stress the injustice as between one taxpayer and another of a system under which such things are a commonplace, but this injustice is at present, carried a great deal further when, in addition to paying this impost, land owners are also called upon to pay income tax on any profits they may make at the same rate as other members of the community, who pay no land tax. This is not all: they are not allowed to deduct the land tax from their assessable income and are, in fact, called upon to pay income tax upon money which they pay to the Government as land tax. “The Minister of Lands. I notice, makes no attempt to defend this iniquity, and I hope that farmers will be relieved of this burden at least.”