LAND TAX

Evening Post, Volume CXXIV, Issue 61, 9 September 1937, Page 10

LAND TAX

GRADUATED SYSTEM

REPLY TO MINISTER

CASE FOR FARMERS

A reply to the Minister of Lands on the subject of the graduated land tax was made today by Mr. W. W. Mulholland, president of the New Zealand Farmers' Union, in a statement endorsed by the Dominion executive of the union. "In a statement on August 14, the Minister of Lands defended the graduated land tax," said Mr. Mulholland. "He said 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. As people who own all sorts of other property also derive benefits through being the owners of that property, if this argument is sound,' ( they also should be subject to tax upon that property, or otherwise why should land be singled out as the only- property to be subject to direct taxation? REASONS DISCOUNTED. "That .the , Minister feels that his argument is weak is to be gathered from his further contention that, after all, the amount collected in land and graduated land tax is a very minor quantity compared with taxation derived from other sources. He also indicates that he 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 land 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 Minist is prepared to fax away the whole value of the land? The graduated land tax, it is true, on the penal scale at present in force, was in operation during the years 1918 to 1921, which saw the greatest land boom in our history. "If the Minister really desired to prevent speculation in land, which is father of all 1-nd booms, he would repeal the land tax entirely and place a profits tax dn land transactions, with, of course, suitable exemptions so that, profits could not be made out of dealing in lands. This would effectively prevent land speculation without, penalising the gsnuine farmer. It hasi been shown over and over again that ' the taxation of land values is entirely! unfair in incidence . and the amount { levied on taxpayers bear no relation, whatever to their ability to pay. Thifs unjust incidence is enormously magnified by the operation of the graduate p. principle. I hay* for instance, papers before me concerning a property whir ki last year was called upon to pay £ 1 FiO in land tax and this' year is asked f jhr £100. There is no difference in '{fie property whatsoever, but- in the interval a new valuation has come 5 uto force. . ' t INCOME TAX ON PROFITS. "It is unnecessary for me to si. pess the injustice as between one taxpayer and another of a system under w||iich such things .are a commonplace, but this injustice is at present carried a great deal further when, in additi an to paying this impost, land owners1 are also called upon to pay income t bx on any profits they may make efj. the same rate as other members f(f the community who pay no land ta:p; and this is not all—they are not allowed to deduct the land tax from their assessable income and are, ufi fact, called upon to pay income tax:: upon money which they pay to the Clovernment as land tax The Minuter. I notice, makes 10 attempt to /defend this iniquity, and 1 hope that farmers will be relieved of this at letitet."