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Lyttelton Times, Volume LI, Issue 5584, 17 January 1879, Page 4

We are afx*aid that the practical administration of the Land Tax Act, will more than realise all our fears as to the cost and trouble of allotting and collecting the tax. Already more than two hundred valuers have been appointed, and, probably, the number is not yet complete. We are not aware what is their rate of remuneration, but, as their duties are professional, we may assume that they will be paid accordingly. Our readers may judge for themselves the extent of those duties when we tell them that in about a month from this date “ the valuer, or valuers, appointed for or acting in each district shall prepare, sign, and transmit to the Deputy Commissioner of such district a valuation list, in the prescribed form, setting forth to the best of his skill and judgment the value of all ’lands in such district liable to the duty by this Act imposed, with the improvements thereon, and the value of such lands without such improvements; together with the names of the owners and occupiers thereof, and the nature, situation, and extent of the property.” The words we have quoted are the simple and unadorned words of the Act, and no rhetorical exaggeration is needed to add to their force. The twenty-first section seems to require a house to house visitation, for it authorises the valuer to “ enter at any time during the day upon land or premises for the purpose of rating the same, and may put to the occupier or owner thereof any questions he thinks fit touching any of the particulars ho is required to furnish in the valuation list.” The legal interpretation of the section appears to make the putting of the questions dependent on the simultaneous visit of the valuer ; and we really cannot see how his duties can be properly performed unless he makes, in each case, that visit. We try in vain to estimate the actual cost of this valuation. All wo can arrive at is the moral certainty that, if it is to be worth anything, it will not cost less than the fixed amount. But how much it will exceed that sum, we are at a loss to conceive. The vote taken, £IO,OOO, for the collection of the tax this year is absurdly small. Two hundred valuers at one hundred pounds each would alone make the cost twenty thousand pounds. And there is, in addition, the cost of clerical labour, and of the permanent department. And the tax imposed by the Act is only estimated by the Colonial Treasurer to raise a yearly income of one hundred thousand pounds. This great proportionate cost of collection violates a fundamental principle of proper taxation, namely, that a tax on its way from the pockets of the people to the public chest should suffer little loss. It may be said that the valuation list is only to bo made every third year, and that the tax can bo increased. With respect to the first plea, wo would state that the original cost, added to the continuous departmental expenses, would still give a very high average rate for the first trienmal period. And we entertain a strong belief that before cue second period arrives, ilu ciplo of valuation will be changed. As for addition lo the tax, with u view to lessoning the proportionate cost oi collection, wo arc rather sceptical. Wo doubt whether Parliament will agree to further taxation in pursuit of the “ unearned increment,” the philosopher’s stone of modern political alchemy.

Wo never could understand why wo have had all this fuss about “ unearned increment ” ns the foundation of our Land Tax Act, or why wo should run the risk of sacrificing a good principle to a bad theory. Whatever may bo the case in England, where land was originally granted by the Crown on a feudal tenure, wo ask for some rational argument to show what claim the Crown can have to the normal increase of value of laud in this Colony, where it has granted that land without rcserva-

tion. When Crown land has been sold in New Zealand, has there not been a contract between the seller and the buyer that the latter is entitled to the natural increase of ralno in the land bought, arising from tho progress of settlement irrespectively of improvements to the land itself ? If there has been no such contract, those who deny its existence should prove that the New Zealand law regulating the sale of Crown land, and tho terms of the Grant itself, do not create such a contract. Then, again, what is the position of derivative purchasers? Smith buys land from the Crown at the rate of two pounds an acre, and, ten years afterwards, cells it unimproved to Brown for five pounds an acre. It is evident here that Brown pays hard cash at the rate of three pounds an acre for tho unearned increment of the land. Is Brown to be told that what he bought at this additional price never belonged to Smith, and is not now his own ? The whole reasoning on the subject of unearned increment in this Colony is based on what is called in logic tho fallacy ot assumption. The truth is, that if the principle of valuation under the Land Tax Act is justifiable, it must be justified on the ground that, taking existing circumstances into consideration, it is fairer and more advisable to tax land without than with improvements. We do not think that the actual working of the Act will do much to assist that argument.

In carrying into practical effect the valuation prescribed by the Act, there arises one important ambiguity, to which wo have seen no reference made, and which we wish to point out. It is not one of a theoretical kind, but, if our view is correct, its determination, either in one way or in another, makes a substantial difference in the amount of valuation, and, therefore, in the aggregate sum of rates to be collected. The fourth section defines the mode of valuation. It declares that “ all land shall be valued at the capital value thereof to sell, after deducting therefrom the value of all improvements thereon.” Out of this definition an important question arises. That question is whether each lot shall be valued at its capital value to sell without its own particular improvements, but with the improvements on all other lots in the district; or whether it shall be valued at its capital value to sell without its own improvements, and without the improvements on ail other lots in the district. What we mean is this. We take the town of Christchurch as a convenient illustration. If, for the purpose of argument, we confine the application of the section to the city of Christchurch, one reading of the section is that all land in Christchurch shall be valued at its capital value to sell, supposing there were no house within the boundaries of the city. That is to say, that each town lot must be valued at the amount which it would fetch, not if it were sold merely without the special improvements pertaining to itself, but at the amount which it would fetch if there were neither improvements upon itself nor upon all the other town lots. This is no fanciful distinction. Let a valuer take any allotment and state the difference between its selling value without its own improvements but with the improvements on all allotments, and its selling value without any improvements both on itself and on all other allotments. An estimate of this difference may be made by calculating what any unimproved allotment would fetch in the market, if there was not a house in Christchurch. And we ask for some valid reason why the legal effect of the enactment is not, for the purpose of valuation, this general abolition of all improvements. “ All land shall be valued at the capital value thereof to sell, after deducting therefrom the value of all improvements thereon.” What right has the valuer in estimating that capital value of any one lot, to heighten its relative value by taking into his consideration the increase of value given to it by improvements on other lots, when the Act says that “ all land ” must be valued without improvements ? But we may extend the application. The section begins by saying that “ all land in New Zealand liable to duty under this Act shall be valued in the manner hereinafter mentioned,” that is to say in the manner mentioned in the words which we have before quoted. It seems, therefore to follow, according to the rules of legal interpretation of statutes, that all New Zealand must, for the purpose of this valuation, be held to be unimproved, and that the valuation must bo made under that supposed condition. We do not see any words in other parts of the Act repugnant to that interpretation. The intention of the framers of the Act was no doubt different, but wo are now referring to a pure question of the legal effect of the words used. The existence of ambiguity in the matter can scarcely bo denied, and it furnishes another instance of the danger of trying to aim at speculative and original legislation.