THE SPECIAL LAND TAX.

New Zealand Herald, Volume LXVII, Issue 20640, 12 August 1930, Page 8

THE SPECIAL LAND TAX.

The admission in the Budget that the special land tax imposed last session was "too rigid in its incidence and was inequitable in some instances," is an extremely moderate description of its effects as they have been demonstrated by the appeal commission. The magnitude of the concessions was due entirely to the resistance of the Reform Party to a harsh and inequitable form of taxation, as a result of which the grounds for appeal were so widened that the commission was able to make full allowance for hardship and to take into consideration "the ability of the taxpayer to contribute to the general revenue of the Dominion,'' a factor which the Government last year absolutely refused to acknowledge as having any bearing upon the matter. A summary of the commission's report was issued by the Prime Minister two months ago ; it was remarked at the time that it was unusual to publish only a summary of such a document, and a study of the full text, now available in a Parliamentary paper, shows that the passages selected for publication ignored others that were at least of public interest. The real character of the taxation is most clearly illustrated bv the difference between the original assessments and the final results as deter-, mined by t.he commission. Mr. Forbes announced in January that 1500 landowners had been assessed for £315,000 in special land tax. Notice of appeal was given by 028, but actually only 531 cases were submitted to the commission's review. In 399 cases remission was granted in full, to the extent of £86,533. Partial remission was granted in 109 cases, to the amount, of £31,735, as was stated in the official summary of the report. But what was not then disclosed is that the original assessments in those cases were £55,538, so that in 399 cases the commission remitted the whole of the tax demanded by the Government as a fair and equitable contribution and in 109 cases remitted 58 per cent, of the tax claimed upon the same ground of justice. The remaining 99-2 cases apparently represented £173,000 of special tax. In the aggregate, the final yield of the tax was only 62 per cent, of the original amount of the levy. There is a statement in the Budget that, after allowing for the remissions, the additional tax received amounted to £210,000, and this figure is apparently exclusive of £47,500 claimed as income tax in excess of ordinary and special land taxes. If this is so, the sum of £240,000 is substantially more than the balance of £315,000 over the remissions totalling £IIB,OOO, the surplus suggesting that if, is subject to refunds which will presumably have to be made out of this year's revenue. A single practical test has been sufficient to prove that the condemnation of the special land tax was fully justified. It is doubtful whether ever before a Government has enforced a tax so manifestly harsh and inequitable that it has had to allow appeals to an -independent tribunal; certainly never before has the estimated yield of a tax been so ruthlessly diminished by such means. Whether the full measure of hardship involved by the original legislation has been prevented is doubtful, but those who have secured relief will not readily forget that their gratitude is due entirely to the Reform Party, by whose efforts alone the Government was forced to modify its punitive propoßaU.