TAXES AND SETTLEMENT.

New Zealand Herald, Volume LXVII, Issue 20495, 21 February 1930, Page 12

TAXES AND SETTLEMENT.

Two Ministerial statements, published simultaneously, deserve to be read together for their bearing on one another. The Minister of Lands gives a rosily optimistic forecast of the progress settlement is to make under.the benevolent assistance of his Government. The Prime Minister explains that cases of individual hardship suffered by landowners under the present taxation whereby they pay land tax, supertax and income tax are merely the result of the ordinary method of assessment. That may be so, but it will be poor comfort to-the taxpayer who under-" goes the following experience, which is that of a landowner not far from Auckland, He has property valued at a figure that makes him liable for £lO9 4s 6d land tax and £8 18s lid supertax, a total of over £llß. His income from farming is returned as £l2B, # a figure that passes without challenge. From other sources he receives £516. By the department's method of assessment, he is called on to pay income tax amounting to £6 4s lOd. He entered an objection, which was disallowed entirely by the commissioner, who insisted that the assessment was wholly in accordance with the law. Of the whole £644, £439 is classed as "unearned." The departmental method of calculation deprives him of the small satisfaction of a 10 per cent, reduction on his farming income, as earned income, because the practice of applying special exemptions in the first instance to earned income makes it disappear beforo the 10 per cent, allowance operates. That, however, is a minor point compared with the fact, that landed property valued at a level making it liable for supertaxreturns a direct income from farming operations of £l2B. As a result of ordinary land tax and supertax, there is left out of this sum £lO as the net return to the owner. Such single instances may not, it can be argued, prove much of themselves. Yet they do prove the degree in which the land tax is an arbitrary Impost, collected without regard to the result of working the land, and the way in which the supertax aggravates the position. Though all examples may not be so extreme, it is a perfectly reasonable inference that under the existing taxation system, endorsed and upheld by the Prime Minister, the optimism of the Minister of Lands about settlement is too great. On the one, hand the. Government hopes to increase the number of farmers, on the other it penalises men for being farmers, The two things are not consistent.