Graduated Land Tax

Horowhenua Chronicle, 7 October 1931, Page 7

Graduated Land Tax

“The graduated land tax is operating with extreme harshness at present both on rural and urban lands. It is not based on any principle of , ability to pay and it has been for many'years. I may quote from among many and repeated condemnations the report of the 1924 Eoyal Commission on Land and Income Tax, which stated: ‘The graduated land tax was originally designed to break up large estates. There is no evidence to show that it is required any longer for this purpose, and there was much evidence showing that it is now preventing the development of large areas of land requiring a considerable amount of capital expenditure to break in. The graduated land tax applied to business premises is a serious handicap to trade and industrial enterprise and serves no good purpose.' “I propose therefore to assist farmers and also the recovery of, trade and industry generally abolishing the graduated land tax while retaining the flat rate of Id. in the £1 of unimproved value. "The abolition of the graduated land tax will, of course,-involve the elimination of the 5 per cent, allowance on unemproved value at present allowed in the assessment of income tax. This allowance, waa made to avoid the double

taxation involved in taxing the land and also the income derived from it. With the flat rate land tax standing at Id. a shortage will require to be made up, which will in part be done by the abolition of the 5 per cent, allowance and part by the further tax proposals which I will refer to presently when dealing with the budgetary position. I may say, however, that to a considerable extent the burden will fall collectively on the same shoulders- as formerly paid the graduated land tax, although the individual incidence will be different. “So far as rural lands are concerned, the taxpayers in the nigher scale above £7500 unimproved value already pay income tax, but it is proposed to make provision by . legislation which will operate from next year to bring farmers with an unimproved value of £3OOO or over under the operations of the income tax, subject to the usual exemptions. This will mean that all income will then be treated alike.