LAND TAX ON FARMS.

New Zealand Herald, Volume LXI, Issue 18702, 7 May 1924, Page 10

LAND TAX ON FARMS.

INCOME AND IMPROVEMENTS.

VALUATIONS NOT UNIFORM.

ANOMALY OF THE GRAZIER. {"B? tslegraph.—rEKs association.] CHSISTCHUBCH. Tuesday. Giving evidence" before the .Taxation Commission to-day Richard M. D. Morten,, president of the Canterbury A. and P. Association, said land tax was a class tax and an evil example of the capital tax levied on primary industries. The remedy, if capital was to bo taxed, was a property taxone levied on all landed property. The invention of unimproved values to suit land tax methods was merely an aggravation of the evil, since the improvement of land automatically advanced its unimproved value, the latter being the capital /value less that of the improvements. Further, some improvements were not held to.be scch after a time.' The tax had fulfilled to excess its purpose of breaking up large estates. It could not be equitably assessed throughout the Dominion. The result was very uneven, being influenced by the personalities of. the valuers and the state of financial affairs at the time, of valuation. In towns and cities the taxation of unimproved values tended to force the subdivision of land into minute areas and the poorer landlord who could not afford to erect tall buildings was at a disadvantage as compared with the man who held a little land and put his money into buildings.

The land ' tax -was also opposed by Mr. Ebenezer Hay, a farmer. Ho said it was manifestly unfair' that a farmer who made nothing in a particular year should be compelled to borrow money to pay the tax. The tax on unimproved values was really a tax on improvements. Valuers did not seem able to resist the influence of the improvements. It was suggested by Mr. Begg that a farmer might be able to evade income tax by making many improvements to his property and showing a small income. Similarly where the laud was being exhausted part of his income would be made up out of capital. The Commissioner of Taxes remarked that except in the case of the grazier, which it Was hoped to meet in the coarse of time, a farmer had to make income before he put it into improvements. ' A grazier could improve his : property by reducing his stock and allowing the grass to seed. " * . *: \ •' >,

Speaking in regard to •company taxation. Henry Worrall, mil! manager for D. H. Brown and Sons, flourmillers, r,atd the present system should be retained. In practice it seemed quite satisfactory. The amount of the tax, and not the basis on which it was levied, seemed to be the cause of dissatisfaction. The present system certainly gave rise to inequalities, but as every other suggested alternative possessed some disadvantage or other it appeared to be wiser I*> retain a system which had already been tested. Any drastic change in the incidence of company taxation would lUo likely to upset the balance in respect to channels in which capital was invested, and might lead to very serious consequences. The. commission finished its Christ"church sitting and will resume in Auckland. *'. / ', '