Hawke's Bay Herald. TUESDAY, DECEMBER 2, 1879. WORKING OF THE PROPERTY TAX.

Hawke's Bay Herald, Volume XXI, Issue 552, 2 December 1879, Page 2

Hawke's Bay Herald. TUESDAY, DECEMBER 2, 1879. WORKING OF THE PROPERTY TAX.

WE .have shown tbat tte property tax is unfain in its incidence, as it makes a distinction' greater; than is justifiable {between 5 incomes" "derived f roiri f lAvestnients 1 ! and from brain .or, lijoidily, labor, is tliere"-.' fore vieious.-iiii'Liprincipie.; Wken tibie,de jlc tails pf the bill introduced to carry outi the piop'e'rty tax are Ibok'ed'intothey'are^ found] to. he] fully as objectionable, 7 ah<d! in some leases ,as, unfaift, As tke;., principle..; First there 1 i§ the exceedingly inquisitorial^ nature of tke tax. It is 'astoni&kihg : 'tb' j kear | tke. .^Colonial,. .Treasurer, arguing, against an income tax. because pfj itsjin^ iquisiiorial nature, and yet proposing a tax doubly inquisitorial. Major Atkinson' generally .means just what he say,s, t pr ! ( >we should suspect, him of attempting" to palm^ofE upon tke House a deep sarcasm under a • simple guise% I£ it be ina I^^. 0 torial to ask a mAu'kow uc h.Kekas ;a year lit is sure\^. inquisitorial to ask him liOw muck money he kas, in wkat i6rm.it;it is invested, how muck -he owes,, .and kow muck is owing to kirn. Yet tkis is wkat every man will have to tell if tke ■ Property Tax Bill passes " iaio^aw ia its present shape; •. :. ;•; : „*. .■•;. Secondly, tke tax will, fall witk most; unequal incidence upok' different property owners. ■ ,one rijaveStment may! return ; fifteen or: twenty per. centj while anotker pays notking, yet the amount payable oii each by way of tax yould be just tke same.. . Take as an instance: ' tke case of colonial banks!' Eack company is to be assessed on the amount <>i its .capital, , wkiek is to consist of tke amount actually p"aid up, • witk tke uudivided profits added. Tke company wiUjhavid to "pay, instedd of thd.in'dividu'al skaitekolders. NoW) oiic batik pays £15 per cent, dividend, and another. £BT"per cent, or little more tkan. kalf. , T T£e" amount payable on the skarcs in ea6k would be.exactly the same-. In one casd tke itax would Amount to about £3 ppre r cent. ,oft tko diyidend.; in. the' -ptker it would be &i Jt'Os ;pW cent. v Tkis is. an illustration drawn from actual and easily ascertained facts, and the 'cases' are exadtly par Alltel 1 , Tkis difference will l)o muck greater- where .! other; skare« ; ai)D taken into account. One man may kayo shares in a concern wkick pays itv2o per dividend;,.. He, is. assessed onl^; on tke money paid up per .skam and not upon the market value of tkeTnveS^ment, and' tke tax would JEfli.ll lightly upon kim^ Another may kaye invested in a company wkick never paid any- dividend, and is never likely to pay any, but uiiless it be ; -woutfd up' in tke Bankruptcy Court we suppose, the unfortunate shareholder will be taxed' upon his unproductive capital* The one' who is ablo to pay a; heavy tax would be lightly touched'; the other would be called upon to out pf.iior things Land, again, .pays, as a:rule, less interest tkan mortgages or otker investments, but this is in ho way taken into account by tke property rtax. . Thirdly,'* tke tradesman will be actually • called upon to pay tke tax upon bookdebts, muck, of wkick . may. stand for a long time,-and some of wkick will never be recovered, for ke has to return in' his statement all debts due to kirn. He .will receive exemption for moneys owing by kirn, but. - that will"' not at all balance, matters in tke majority of cases,- as book-, debts are always worth less' than their nominal value, while the debts owing by , the honest trader;mustbe satisfied to their . full extent as long as he has any property left. Then how are tradesmen to declare 1 the value of their stocks ? Are they to put down the selling value'?.. . If so, that will include in the majority of cases ten or i fifteen, per .cent, paid .for C.ustpms" duties, and the amount, ke, kas already paid to tke revenue will be counted/ as actually invested yrealtk. If kereturns it at tke cost price in England ke undervalues tke property. Tke. Act is < totally, silent as to kow ke is to get at tke valuation. • •'"' Tkere is one feature in the property-tax' which will 'meet with approval from many, :but we cannot admit its logical fairness or its wisdom. This is tke exempV; tion of all -mortgages. In otker words, a man. who kas* kis' .property "mortgaged will only kave to'pay the tax "on tke difference between tke mprtgage and tke actual value, tko mortgagee being taxed for tke amount of tke mortgage. : , Tkis at first sigkt appears altogetker in favor of tke struggling landowner, but in practice a very different state of things may be developed. It is the object of- the colonial landowner to obtain loans in England at a low rate of interest compared with that ruling in the colony.. We believe that large sums of English capital are. held' here at six or seven per cent. At Home not more than £5 per' cent, could be obtained on equally good security, and. the. additional '£l or £2 per cent, induces tke investment of capital in tke colonies. Tkis tax will, however, reduce the interest by 8s 4d per cent.., leaving £5 11s Bdor £6 1 Is ; 8d as interest). . Tkis will in all probability result in tke withdrawal of a considerable amount pf English capital,* and will prevent investment! in the future, unless the rate of interest be made higher t tojeover the. tax. Thus we- shall either' lose needed .foreign capital, or the, mortgagor will have to pay, and the provision of: the bill exempting kirn will become inoperative. Then: "this particular clause will, also play into the hands of . ltind speculators. A man has nothing to do but to purchase large blocks of land, mortgage them to their. full value, and leave them unimproved, when in all probability he will not be called upon to pay one p^nny to. the property-tax, for some years, and by tkat time he hopes, to have,sold them at largely increased prices to bdnajide settlers^ We do not think that Major Atkinson had any idea of tkus assisting iahd-speculators, wko are little worse tkan declared enemies of the colony, but his proposals certainly have, that tendency.

jjuic ; — .-»_-_-».. -...-• .. , .... - i " '. BACHELORS. •■. NO. St. lb. Yonlempsky _ ... 1 . 10 8 Duncan ... 2 11 2 : Gibbons /.. 3 1 11 4 . Brooking ... stroke 11 0 Total ... ... 44 0 BBNBDICTS. .■•'■•-.. No. St. lb. Bogle 1 9 13 Gilberd 2 10 10 Gibbons ... 3 11 5 Liddle . '■... ... :'...•, ...stroke 10 6 Total... '. .'. 42.6 st. lb. Average Bachelors ■ ■ 11. 0 , Average Benedicts ; 10 8J