CORRESPONDENCE

Evening Post, Volume LXXXIX, Issue 55, 6 March 1915, Page 8

CORRESPONDENCE

TAXATION OF LAND VALUES ' TO THE EDITOR. Sir, — I quote an interesting passage from the last report on the New Zealand Railways (pp- 13-14) by the General Manager. Referring to the AucklandWestfield line, Mr. Hiley says: "The new railway will open an entirely new suburban area for Auckland, bringing Orakei, Panmure, and the desirable country in this neighbourhood within a few minutes by train of the business centre of the city. It is to be regretted that the Department cannot claim some compensation from "the landowners in the shape of a betterment rate, to assist in the expense of building the railway." The first commentary I would offer on this pregnant passage is that it revives memories of Sir Julius Vogel's great Public Works policy. Nowadays one often hears disparaging references to Sir Julius Vogel and his policy, but the critics are generally unaware that bis policy was never applied in its en tirety. Had such been the case, the main trunk lines would have been built first, then the branch lines, and the interest on the cost of construction would have been a charge on the enhanced- value of land. Let anyone read the speeches made by Sir Julius— and there are many of them in Hansard — and he will find tr-at he considered a betterment tax an essential part of his great railway policy. That the trunk lines have not even yet been completed, that the cost of the railways is a charge on the taxpayer while private monopolists reap the benefit — ail this is no fault of the great man wiio framed the Public Works policy with which his name is indelibly associated. Had that policy not been perverted by men whose highest motive was self-interest, this country of cits would to day be in a much better position than she is, and Mr. Hiley would find it unnecessary to comment on what in reality amounts to a grave violation of the public interests. Secondly, I would point out that, although the advocacy of a betterment tax is in one respect satisfactory in that it amounts to an admission that the unearned increment of land is rightfully the property of the community, yet it is not in, itself the true remedy. Those who, like Mr. Hiley, regret that no provision has been made for the imposition of such a tax are apt to think that once the railway line has been made, there is no remedy. Such, however, is not the case. All that is required to rectify the omission is to increase the land tax. Do that, and you will accomplish all that a betterment tax would have done and much more. In reality a betterment tax would be inequitable, inasmuch as it would be found difficult to separate that portion of the enhanced value due to a railway from that brought about by other public utilities. Moreover, it is not merely the land that is traversed by the railway that derives the) benefit. The completion of 'the Auckland-Westfield line will raise thft value of land in Queen-street, for Mr. Hiley admits that the districts he mentions will be brought "within, a few minutes of the business centre of the city." Why should not the landlords there pay their share also? Why should one set of landowners be taxed while the others .escape? No such anomaly is possible if we discard the idea of a betterment rate, and concentrate our attention upon an increase of the land tax. The taxation of land-values has many aspects, but there is one which is seldom mentioned, namely, if we doubled or trebled the tax we would add nothing to the cost of collection. The cost of valuation would remain constant, and not a single additional clerk or valuer would be required! Again, the amount of • revenue that would be yielded by the tax at a given" rate could be estimated t6 a sliilling. No other system of taxation possesses these undeniable advantages. But over and above all these there remain to be considered the farreaching social benefits that would necessarily accrue from the extinction of private monopoh in land. — I am, etc., P. J. O'REGAN. 4th March.