GRADUATED LAND TAX

Nelson Evening Mail, Volume LXXI, 13 September 1937, Page 2

GRADUATED LAND TAX

FARMERS’ LEADER REPLIES TO MINISTER

INt IDGNCK IS ENTIRELY UNFAIR"

A reply lo the Minister of Lands, Hon. H Lang.slone, who, on JWtli August, issued a si'tatement in defence of tne. graduated land tax, was made hy the Dominion pre.sidenl oi the New Zealand farmers' Union, Mr W. Mulholland. Mr Mulholland's statement was endorsed by the Hommion executive of the union. "The Minister of Lands stated that the purpose of the tax was not to bring about the cutting up of large, valuable country properties, nut to provide a return to the State from the individual or company, relative to the benefits derived hy him or them through being the owner or owners of the land subjected to the tax," said Mr Mulholland. “As people who own all sorts of other property also derive benefits through being the owners of that propeit.y, they should, if this argument, is sound, also be .subject to tax upon that property, otherwise why should land be singled out as the only property to be subject to direct taxation? LAND DOOMS "That the Minister feels his argument is weak is to he gathered from his further contention that, after all, the amount collected in land and graduated laud tax is a very minor quantity compared with taxation derived from other sources. He also shows that he leels the need for further justification when he says that a just laud tax, in addition to providing some revenue to the State, has a significant bearing in preventing land booms and speculations in the community values created by the general and progressive development which is continually taking place. What is there in the taxation of land that goes to prevent a land boom—unless the Minister is prepared lo tax away the whole value of the land? The graduated land tax, not, it is true, on the penal scale at present in force, was in operation during the years 1918 to 1921, which saw the greatest land boom in our history. f "If the Minister really desires to prevent speculation in land, which is the cause of all land booms, lie will repeal the land tax entirely, but place a profits tax on land transactions with, of course, suitable exemptions, so that profits cannot he made out of dealing in lands. This would effectively prevent land speculation, without penalising the genuine farm-

It has been shown over and over agai: that the taxation of land values is ei lively unfair in its incidence and the amounts levied on taxpayers bear no i lation whatever to their ability to pay This unjust incidence is enormously magnified by the operation of the graduated principle. I have, for instance, papers fore me concerning a property which last year was called upon to pay £l6O in land tax and this year is asked for £1(X). There is no difference in the property whatever, but in the interval a new valuation has come into force.

UNJUST SYSTEM”

“It is unnecessary for me to stress the injustice as between one taxpayer and i another of a system under which such j tilings are a commonplace, blit this injus- , tice is at present carried a great deal further when, in addition to paying this impost, land owners are also called upon 1 to pay income tax on any profits they may make at the same rate as other * members of the community, who pay i land tax. This is not ail: they are not allowed to deduct the land tax from their assessable income and arc, in fact, called upon to pay income tax upon money i which they pay to the Government as , land tax.

“The Minister oi Lands, 1 notice, makes no attempt to defend this iniquity, and I hope that farmers will he relieved of this burden at least.”