LAND TAX

Evening Post, Volume CXXII, Issue 31, 5 August 1936, Page 6

LAND TAX

STEER -GRADUATION.-

PLACING THE BURDEN

SPECULATION ISSUE

The reimposition of the graduated land tax, rising from Id In the £1 up to- £5000 to 6d in the £.1 at £45,000, was announced by the 'Minister of Finance, who maintained that the procedure would mean theminimum taxation on the working farmer and the home owner* with increasing rates on abnormally 'large holdings and other areas held in many cases for speculative profit instead of for use in production. ,

"It is proposed," said the Minister, "to reintroduce the graduated land tax, from which an estimated revenue of £1,300,000 is^expected, or approximate.ly three times the present revenue. The tax removed by the Coalition Government in 1931 had, for fifteen years previously yielded revenue between £1,000,000 and £1,500,000 per annum, and sometimes slightly in excess of the latter sum.

"The principle of land tax has been the subject of debate and controversy throughout the centuries. It must be accepted that a charge on land) of any kind reduces its selling value, such selling value being based on the net return which can be obtained from the land after all charges have been paid, which means that, given stability in prices and costs of production, a reduction in land tax is a gift to the immediate land owner, Conversely, ah .increase in the tax must'be met by the-immediate owner. To ensure taxation in .some measure according to ability to pay, the existing flat tax will be continued at a penny in the pound of taxable balance of unimproved value up to £5000, after the ordinary exemption or mortgage deductions. have been made, which means that the farmer owning land of an unimproved value of £5000, with mortgages of £3000, will be assessed on £2000, the tax payable being £8 6s 8d as at -present. The working farmer should be the first \o be helped, after which the ability to pay should be considered; When the unimproved value reaches higher levels the tax will be increased accordingly on all land, whether it b.e city, suburban, or rural. "The existing ordinary and mortgage exemptions will be. continued. "The rates of tax to be paid on the restored procedure of graduated tax will be as follows:— "Taxable balances up to £5000—one penny in £1, increasing by l-8000ths of a penny for every £1; in excess of £ 5000, reaching a rate of twopence in the pound at £13,000, threepence at £21,000, fourpence at £29,000, fivepence at £37,000, and sixpence at £45,000, from which point the tax continues at the flat rate of sixpence to the maximum value owned by any individual, trust, estate) or company. OBJECT OF TAX. "The purpose of land tax is, in principle, to obtain for the community the values created by it. .The principle behind the policy of the Government is to ensure to those Who utilise land the maximum payment for their' labour; In other words-^-the "farmer's eyes should Ibe on the return for his products ! rather than the acquisitive possibilities |of profit derived from land sales. | "Applied to city, suburban, or rural I land, values that accrue through pubj lie activities and increased population i should automatically come to the State, | and the policy of the Government will ]be directed to this end. I "Summed up, the procedure will I mean the minimum taxation .on the working farmer and home owner, with | increasing rates on abnormally large i holdings and other areas held in many cases for speculative profit instead of for use in production.