CORRESPONDENCE.

Hawera & Normanby Star, Volume XLVI, Issue 808, 11 June 1903, Page 4

CORRESPONDENCE.

LAND VALUE TAXATION.

(To the Editor). Sir,— ln my last letter I endeavoured to point out that the annual value of the land of this country is sufficient to provide the revenue necessary for our requirements, but the practical application of these ideas in to to, at present, is impossible, owing to the want of knowledge on the part of those mainly interested. At the same time, without disturbing existing circumstances to any great degree, we could, with benefit to the community, proceed more rapidly than we are at present doin£. I The idea is gradually gaining ground a's regards local rating. The municipal bodies that have adopted the " rating on unimproved values" have adopted the system for local purposes. The principle that underlies this statute is that individuals should not be taxed for improvements, or, in other words, for the expenditure of labour and capital, and if this idea was carried to its logical conclusion, the State should not raise revenue from, the expenditure of individual capital and labour. "Why, if my improvements arc exempted from taxation for local purposes, on the above principle, should many of the necessary items that make the total of these improvements be taxed for State purposes ? Why should not the State raise its revenue on the unimproved value, seeing its duties are exercised only on a larger, and wider sphere than those of local bodies ? Let the State gradually increase the land tax, or lai^d value tax, as it ought to be called, decreasing Customs and other taxes proportionally, and eventually we will arrive at the system I am advocating. In one of the issues of the Star, about ten days ago, a report of the extremes created by our present system was very noticeable. One of the pars mentioned that land in Wellington was bringing tho sum of £100 per foot. This would mean that under a laud value system of taxation tho State would be drawing a revenue of £4 to £5 per annum per foot. (It must be borne in mind that this- annual charge is being paid now by a' tenant, or saved by the owner). The other par referred to the condition of the 1 roads in the back districts, due to the excessive rainfall, and the. inability of the local bodies to meet such extraordinary expenditure. Here then is the SQurcc from which revenue should be derived t6 meet the extreme expctixiituro at the other end, because these values are created by the needs and necessities of the population between and around those two extremes. I can only touch tho protection idea that largely bolsters up the present system. If the workers (and I use tho word in its widest sense) wore to see and recognise clearly that the rent of land is the cause of the downward tendency of the earnings of labour, then protectionist ideas would vanish like a myth. The three factors liecessary for production are land, labour, and capital, with their returns, rent, wages, and interest. What share, rent takes must necessarily determine the share of wages and interest. If rent is an increasing quantity, and the other two diminishing auantities, then it solves the cause of lowering wages, and lowering interest. Apply this to New Zealand history, or any other country, and sec if it is not a solution to many of tho problems that face the world to-day. Tie taking of this annual value, call it rent, tax, or payment, would settle the land auestion in this way. *It is this constantly increasing value that creates land speculation ; the knowledge that, on the average, rent is an increasing quantity in a civilised community, and that the pressure of population will force people to pay it to secure land. Takingi this value in taxation will destroy the possibility of making money in this way, for any increase in value Ss handed to the State annually, so it would be useless to hold land in the hopes of .securing the rise. Hence land speculation would, bo destroyed. It would give land its true value, that is, its productive value, not, as at present, a speculative value. How often do we hear that the value of land should be its productive value. This is the only way to secure it. It would settle the question of town lands equally with the settlement of back blocks. In point of fact settlement would uot be driven back so fast, and so far as the present system drives it, while land in the settled areas is held partially in an unproductive state. It would give an assured finance, for as the State borrowed money for productive purposes, so also would the revenue increase proportionally, to meet" the demands made upon it, and we could justly estimate the land values of tho colony as a Government asset. It would give a freehold tenure shorn of the dangers that are inherent in the present freehold-, with direct taxation, and would secure to all men the results of their • labour. Thanking you for the space you have so LlndJy allowed me, in which I have only skirted the fringe of a qucsiion ihat is fraught with such vast possibilities for humanity.— l am, etc., DAVID L. A. ASTBUBY.