TAXATION OF CITIZENS

New Zealand Times, Volume LXXI, Issue 4512, 13 November 1901, Page 4

TAXATION OF CITIZENS

To-morrow the ratepayers of Wellington will be afforded an opportunity of deciding whether they will change the ip. cidence of local taxation. At present landlords or tenants are taxed upon the annual rental value of their properties. If a landlord receives £IOO in rent from his tenant, who does not pay rates, then the landlord is assessed by the City Council to the extent of 2s 5Jd in the pound on, say, £BO, some twenty per cent, being deducted for depreciation or o f her considerations. Tho ratable value of such property would be £BO per annum, and it would contribute to the Corporation something like £9 18s 4d. Under the present system of rating that is deemed a fair proper, tioa of the landlord’s revenue to be ah-

sorbed by the city for tee services and advantages the Corporation affords. But the advocates of the new system assert that it.is iniquitous to tax improvement'., and that it is fairer to tax the unimproved value of the land; and so it is calculated that a property which gives to its owner £IOO in rent has only an unimproved value of, £6OO, and that tho improvements thereon are estimated to bo worth £IOOO. Under tho new syr. tom tho landlord of such a property would contribute to tho revenues of the city on the basis 3 5-61ths of a penny in the pound tho sum of £7 13s lOd. Tho difference in such a case as this would have to ho borne by some other ratepayer, for the City Corporation must have the same amount of revenue in order to fulfil its functions and pay its way. On the other hand, if a working man has a section, Urn unimproved value of which is £6OO and his dwelling-house is only value for £4OO, then, whereas under the . present system he would he rated on an annual value of £4O per annum and pay £-1 19s 2d, under tho proposed system of levying rates he would have to pay £7 13s lOd, or as much as his neighbour who has a house worth £IOOO erected upon tho section adjoining. Such cases may not he general, but wo cito them in order that the smaller ratepayers may understand something of what they arc about to do. Besides, that aspect of the position has not been presented by the rather one-sided, but, nevertheless, tolling circulars of those enthusiastically in favour of rating on unimproved values. It cannot bo denied that tho present system of local taxation affords some glaring anomalies. Hero is a ratepayer who has improved his section of land by building a ware, house, a shop, or dwelling-housa upon it, and there is a speculative ratepayer who docs no more with his section of similar area than fence it, and sometimes not that. The latter is waiting to take advantage of tho "unearned increment,” or reap the harvest of increased value which the expenditure of his neighbours’ money will give to his vacant land. It is the design of tho now system that the owner of an unoccupied section shall ho compelled to pay as much as tho landlord of the adjacent land of like area and frontage on which may ho erected business premises valued at, say, £IO,OOO. To those who hold “single-tax” principles and arc followers of Henry George, such a case is a powerful incentive to vote for tho now system. Still, there is sound reason in tho argument that vacant lands hold for speculative purposes should be compelled to contribute more to tha. city revenues than is now the case. Why tho man of energy, industry and enterprise should have inordinate taxation imposed upon the fruits of his effort simply because ho is helping to build np tho city in a greater degree than his neighbour, who only stands by waiting to reap in duo season where he has not sown, is undoubtedly ono of the draw, backs of a system that perpetuates such incongruities.

Of course, we will be told that the individual, firm or company that expends, say, £20,000 in premises is afforded facilities and conveniences for tho carrying on of its business or industry and of earning greater revenue than can possibly accrue to the less enterprising ratepayer whose £SOOO buildings adjoining may be quite adequate for the business he is engaged in; and that to tax the latter as much as the .former would create as flagrant an anomaly as any existing under the present system of raising funds for the Corporation. It may bo further urged that as local taxation is regarded as rent paid for certain privileges, advantages or services provided by tho cox-porate propx-ietor, the City Council, then, as tho streets and other facilities are naturally used in a greater degree by the larger industry, it is reasonable that it should contribute more to the revenues of the borough than the smaller one, ix-respective of tho fact that the value of the laud occu pied by both is similar. Let it bo admitted that the small manufacturer or shopkeeper, provided ho is his oxvn land, lox-d, xvill contribute under the proposed system more than he does now, it is competent for him to erect huildixxgs as pretentious as his neighbour’s and obtain all the advantages they afford without coxxtrihuting more, at least, not directly on account of buildings, in the xvay of local taxation.

But the term '‘unimproved value” is a misnomer. Land at Ruapehu has no value, and tho land' along Lambton axxay would have been as worthless but for tho presence of man and the expenditure of his industry and capital. Shorn of its verbiage, the new proposal is to raise local tasatioxx on a laxxd value, estimated apart from tho expenditure upon buildings and determined by the proximity of tho taxable area to the harbour and its accessibility as a public thoroughfare. With a view to encouraging the growth of magnificent structures within certain limits of the city, it is proposed to cast the bux*den of taxation upon tho land and to permit the build, ings nominally to escape. It is not a socialistic proposal, hut under it no slums will be able to exist wherever land becomes so valuable as to be out of proportion to the value of the build, ings upon it. Its general tendency would be at the outset to lower the value of properties in the heart of the city by casting a greater burden of taxation upon them, and to raise the value of properties in less compact area* by lessening taxation charges. As, however, the City Council will not abate one penny of the amount, £-56,955 17s 6d, it annually requires, it is for the ratepayers to say by what method they will prefer to raise that sum. As a majority of one-thxx*d of those on the roll may determine the issue, it is important that all ratepayers should record their votes one way or the other. Since many ratepayers are not yet satisfied as to whether the disadvantages of the ono system are not greater than those of the other, the doubting ones will probably determine to allow the present method of taxation to continue.