LAND TAX

Evening Star, Issue 19942, 11 August 1928, Page 4

LAND TAX

CITY iEffS PAYMENTS PREMIER WOULD EXEMPT (From Oce Paeuamentabt Repobtek.l WELLINGTON, August 10. City business men, bowed under the heavy burden of taxation, may seize with eagerness upon an important hint by the Prime Minister that he would be prepared to exempt them from land tax payments. Mr Coates made the statement during a rapid cross-fire of interjections during tho Budget speech of the Leadei of the Opposition in the House. That wealthy profit-making sheepowners, with tremendous annual incomes from wool sales, paid not one penny in income tax was the point which Mr H E Holland (Leader of the Opposition) was stressing at tho time. He drew attention to the fact that the Minister of Finance noted a falling off in income tax receipts of £148,487. There was no reason in the world why income tax receipts should show a deficit. The reason for this big decline was to be found in the legislation of past years which exempted certain classes from payment of income tax. For tho year 1927, as against 1926, wool prices increased in the aggregate by about £BOO,OOO. As all members knew, it did not matter how wealthy a sheep-owner might be, he did not pay a penny in income tax. Chorus of Reform Voices: Wrong. Mr Holland: He does not pay because he is a landowner. If taxation were levied on the sales of wool the Minister of Finance would not show a falling off in receipts, but a big increase. Dalgety’s figures showed that this year’s wool sales resulted in 658,300 bales being exported at an average of £24 per bale. The aggregate value would bo about £15,800,000 for the current year. Tho value of the wool exported last year was £12,030,815. Thus, exports this year wont up over £3,000,(XX) in value. If to this figure one added the increased price paid for wool not exported, but used in New Zealand mills, the extra yield from wool sales totalled about £4,000,000 more than for last_ year. Yet there was a falling off in income tax receipts. SHEEPOWNERS’ PROFITS AND TAXES. Mr Holland went on to show how certain large sheep-owning families made tremendous profits without contributing anything to income tax revenue. One family in Wellington district, with 106,000 sheep, had an annual income from £90,000 to £IOO,OOO. That figure was computed on the basis of 101 b of wool per sheep, which an authority on sheep farming had assured him was reasonable, taking into account tho wool obtained from lambs. Wool went up by 4id per lb, and the extra £20,000 went into the pockets of this family, but they paid no income tax at all. “Surely,” said Air Holland, “here is a source of income that should be taxed. No Government could find justification for exempting families like these.” A handful of sheep-owners obtained the major share of tho profit from wool sales. Fifteen owners possessed upwards of 20,000 sheep each. Worked out on the same basis, tho increase in their income was £65,000, free of income tax. Then 199 owners had from 10,000 to 20,000 sheep each, and their incomes went up by £227,000. Another 507 owners each had flocks of from 5,000 to under 10,000, and they enjoyed an increase. The Minister of Finance (the Hon. Downie Stewart): These men would prefer to pay income tax. The Leader of tho Opposition: I’m prepared to assist to make them pay it anytime. The Prime Minister: And take off the land tax ?

Mr Holland: No. certainly not. The Minister or Finance; Not take tho land tax oil? Mr Holland. Will the Prime Minister bo prepared to take tho land tax oil tho city business man? The Prime Minister: Yes! Mr Holland: Then lot him bring in his Bill. What wiSI the local bodies say about it when there is no tax on land ? Tho Prime Minister: Nonsense. Mr Holland ■ I know what they would say. Mr Coates You arc mixing tho local and the State tax, Mr Holland Now the Prime Minister is talking about tho national tax. Ho is prepared to go half way and to slop there. WHY RECEIPTS WENT DOWN. The Minister ol Education (Mr Wright) who followed, suggested that the plain truth about the reduction in income tax receipts was that last year’s wore levied on depressed incomes The Leader of tho Opposition had evideuth overlooked the fact that big landholders, such as Crown leaseholders, did pay income tax. Mr Ransom (Pahiatua); But not land tax. Tho Minister- “1 don’t suppose you want to tax them every way. I don’t care what a man’s income is, if you. go beyond a certain point he ceases to earn income.” Laboui members asked for higher pensions and higher salaries, and if they succeeded in their demands there would be no income left for the wool growers. Nobody seemed to have a good word for tho largo landowner, but many had heavy mortgages. They had their had years'. If an individual paid a reasonable amount of taxation, that was all that could be expected of him. As for tho point that land tax as well as income tax was paid in boroughs,- it must not ho overlooked that, before paying income tax, the taxpayer was able to deduct 6 per - cut on the capital value of his land and buildings, and in many cases that simply wiped off one of the taxes. Taking the land tax off city areas would not affect local rates, which wore levied on a different basis.