TAXATION OF UNEMPLOYMENT.

Hawera Star, Volume LI, 25 August 1931, Page 6

TAXATION OF UNEMPLOYMENT.

(To the Editor)

Sir, —I feel that in writing on this question of taxation 1 am like one “crying in the winderness,” but the estate of this country demands all who desire its welfare and prosperity to express their views, no matter howextraordinary and unpalatable they appear to ordinary beliefs. Time and again, by your courtesy of the columns of the '“Star,” I have expressed the view that the present system of taxation upon individual labour and capital is unjust and injurious to the- progress and prosperity of the Dominion and that the failure of our legislature to recognise the part that economic rent takes in the- economics of this country and the fear to use- it as a means to secure Government levenue —as if it was sacrilege to touch it—has compelled them to load capital and labour with taxes that writers, politicians, and economists, recognise are nearing the- point of a breakdown. And yet- to the mind that sees clearly on this question the simple and only method would be to lighten considerably the tax burdens that* are being used to get revenue and place that taxation on economic rent or land values. If a farmer with a loaded horse bogged in a morass was seen bv me still further loading the unfortunate animal with heavier burdens in the hopes- of getting it out by these means, 1 would put him down as a, fool, and my advice would be talc© your load oft, put it on dry ground and rive the animal less weight to enable it to struggle out with freedom. Yet loading with heavier taxation the: already overburdened taxsaver is what the Government is doino-, in the blind belief that somehow ”or other he will 'struggle out of the financial morass both are m. Year® ago, when Richard John Seddon became Premier, he spoke in the old town hall at- Stratford on the policy of the Liberal Party. He foreshadowed old age pensions, higher and. more universal education, the retaining or the Crown’s interest in all unsettled land for the .benefit of the aforementioned, settlement of land in smaller areas wages to unpaid apprentices, anq a number of reforms that constituted the then Liberal policy and / at the close of his address invited questions. I was present at the meeting and for some time previous had been reading a work on political economy which differentiated clearly the difference between wages, interest and economic rent, which -pointed out that nomatter how we progress, economic rent grows at the expense of wages and interest. By the light of this reading I saw that the policy as laid down by Mr. Seddon would increaseeconomic rent or land values, and the policy of private ownership would enable ' land owners to collect those values f put this question to Mr. Seddon- “If your Government policy is carried out, will it not enhance the value of the land of New Zealand and that- value go to private individuals? What does your Government propose to do to get a share of that value. Mr. Seddon’s reply was: “The Liberal Party have placed on the Statutes the legislative machinery to collect it Why not go on with it?” I do not know whether his vision saw the wonderful results that would have accrued if the Liberal Party under himself and Sir Joseph Ward had carried that poliev on hut thev halted, i\ith the result that millions of money borrowed and spent for the advancement of New Zealand has increased economic reive or land values and t-p-day city, suburban and country users of land are .paying that enhanced value for the right i oi living and working upon it togotner with "the burdensome taxation that is imposed upon tihem. Xf the Inborn] Party (which at that time was known as tlie Liberal and Labour Party) had proceeded with the policy of taking a larger and larger share of economic rent that the legislative machinery enacted bv John Ballance, John McKenzie and Richard John Seddon ha<] riven them the power to do; if they had abolished the exemption of £SOO uner the Land Tax Act and contemporaneously reduced other forms of taxation commensurately with the amount of revenue received from land values, New Zealand to-day would not be in the- grip of financial institutions and mortgagees and better able to withstand the decline that has taken place in the values of their staple products. What is wanted in New Zealand to-day is a change in the incidence of taxation, not added taxation. We have property in land divided into improved value and unimproved value. Now we want the investments on land, viz.: Mortgages, divided into the pro--1 portion invested on the- improvements anff- the proportion invested on the land. This will show the extent the mortgagee is a land owner or in other words the owner of economic rent and as such should be contributing land tax to tlie Goernment. Referring to tbe added source of revenue by the abolition of the £-500 exemption under the Land Tax. 1 was sitting with others on the bank of our bowling green and the discussion circled round the present iniquitous Unemployment Tax, when I put tbe question: “Why is not this piece of land (referring to the bowling green) not contributing anything to l the general Government revenue, it lias the protection of the Government, viz., law and order together with other advantages. Why then is it exempt.’ There seemed to he no valid reason given why it should not, and when it is pointed out that all other sports -rounds together with residential sites under the £SOO value do not contribute one penny piece to the general revenue; one i'S jit «i loss to know now tlie legislative mind. passed this source hv to exploit individuals-, with a poll fax, the incidence of which is unjust and' vicious in the extreme. Customs duties, bonuses, income taxes, stamp duties and poll taxes take from theearnings of individual labour and add t-” 0 the” cost of living besides reducing the amount of individual earnings that would be -spent in productive w-o-rk A tax on economic rent substituted for the former would cheapen land, city, suburban anff country, bring the latter into cultivation by snh-di vision and hence create labour. This, I take it. is the foundation cure for unemployment. I am. etc., _ _ '* DAVID L. A. ASTRURY.