INEQUITABLE TAX

Hawera Star, Volume LII, 5 September 1932, Page 7

INEQUITABLE TAX

LAND AND INCOME ANOMALY. CANTERBURY CRITICISM. Reaffirming its opinion that the land tax, especially the double taxation o land and income, is inequitable, tne Canterbury Chamber of Commerce has decided to appeal to the Prime Minister, the Rt. Hon. G. W. Forbes, to have the anomaly removed. At the last meeting of the chamber a letter was received from a member who complained that on properties used for the production of rent one penny in the £1 was charged on land value in addition to income tax,, fiom which no allowance was made in respect of the land taxation. He quoted this example: Tax.

£ s. d. Land value (£36,680) .... 15& 16 8 Income (£3408) ® Total 707.14} 8 << If the income of £3408 was derived from interest instea,d of from rent or from business without land ownership the tax would be £614 18s only, .but since it is derived from rent it suffers about 20 per cent, extra by way of land taxhe set out. <C I have not the scale of income tax to g;ive further examples, but these can be readily worked out. In certain cases it will be found that a landlord must pay as much as 3Q per cent, more than an ordinary income recipient, such as a mortgagee. ”

INCOME TAX PREFERABLE. Mr A. F. W right, chairman, reported that the Parliamentary Bills Committee had considered the question of the double taxation of land and of income derivdd from ithe land, and considered that the position was inequitable and anomalous. The committee suggested that the chamber should reaffirm its previously expressed opinion that land tax should be abolished and that income tax is in all cases the more equitable system of taxation, and that the anomalies that arise from the two forms of taxation now obtaining through he retention of land tax would be overcome by Its abolition.

Mr Norton Francis: This matter of land tax affects the towns as well as the country. It is most unfair.

PAYING- TAX ON LOSSES. iMr AV. H. Nichoison said that in some cases there were seven more glaring anomalies. He instanced one case in which a mortgagee, Having received no interest from his property for three years, received a bill lor arrears of hind taxation for the whole of this period. Mr J. Mac Gibbon: Has any defence been offered for the imposition of land tax?l At the present time it is most inequitable that a farmer who is losing money should be called upon to pay the tax.

Mr Wright said that the property tax, adopted in 1879, was applied to’ all forms of property, but it was dropped in liS92 because it was felt that people owning land were paying too much. Then the country had the land and income tax, and then the graduated land tax. In England, he added, land tax was really income -tax, and was assessed in much the same w!ay as a default assessment in New Zealand. xho chief argument for the retention of land tax had been that it was so easy to collect. Mr W. H. Nicholson: The reason for the graduated tax was the alleged necessity for breaking up fhe large estates. That does not hold now. Mr Mac Gibbon: I cannot see the reason for the tax as at present imposed. Mr Nicholson: There is no reason for it. It was decided to bring the complaint before the Prime Minister.