The New Zealand Times. MONDAY, MAY 17, 1915. THIS PICTURE AND THAT

New Zealand Times, Volume XL, Issue 9045, 17 May 1915, Page 4

The New Zealand Times. MONDAY, MAY 17, 1915. THIS PICTURE AND THAT

Our Tory Finance Minister, the Hon. James Allen, M.P., is doubtless wondering just now (1) whether it will he his task to present tnis year’s statement oi New Zealand’s finances; and (2), if so, whether he dare let his squatter friends go free, and raise his so-called “war tax” solely by means of increased Customs duties. Indeed, it is hardly too much to say that the desire to stave off the long overdue increase of the graduated land tax is one of the main reasons, if not the main reason, why the Massey Ministry, though in a. decided minority in the country, have striven by hook or by crook to maintain their failing hold on office. They have a very shrewd idea of what Sir Joseph Ward would do in regard to the land tax, were he in power. And that with the enthusiastic support of his Liberal and Labour followers. Hence the devious twiste and turns of the Tories to keep him out. No doubt the real reason why Mr Massey failed to reduce the cost of living by reducing the Customs taxes was that to do so would of necessity involve a corresponding increase in the land tax- Such being the position, let us see how, pound for pound, the graduated land tax compares with the indirect taxes levied upon some oi the simple necessaries and simple luxuries of life. The Customs taxes are taxes on expenditure. Therefore, to compare the graduated land tax with the Customs taxes we must treat it alsb as a tax upon expenditure. Take, then, the cases cited by the Hon. James Allen in his latest Budget speech. May it prove to be his last I -

Unimproved Graduated Value. Land Tax to the nearest JS £. A 31,665 127 3 49,650 - 338 C 57,533 . . 463 D ...',63,910 578 B 70,529 711

On a 5 per cent, basis we may regard Mr Allen’s friend A as spending £1583 a year upon land; his friend B as spending £2482 a year anon land; C, i!2876; D, £3195; and E, £3526 a year. Of course, they do not actually spend, these sums on land. But they forego interest to that extent. That is -to say, if they sold their land at the unimproved values . stated —and they would consider themselves very unlucky indeed if at any sale , they did not realise considerable more than these values! —the purchase money would yield them in interest the respective sums named. Or. on the other hand, if they let the land instead of selling it, they could draw similar amounts in rent. Treated as expenditure on land, however, these figures gjve us a very fair, if rather rough and ready, basis of comparison with the Customs taxes. On these lines, it will bo found that A pays in graduated land tax something less than Is 8d for every £1 of his expenditure ■ on land; B loss than 3s per £1; 0 less than 3s 4d per £1; E little more than 3s 4d per £1; and B little more than 4s for every £1 of his expenditure on land. : These rates of may, it Is true, seem .at first glance somewhat high. But compared with the Customs tax rates they are very low. It must he remembered, moreover, that the squatters pay out of their superabundance: the workers out of their poverty. The squatters’ pay out of money bags bulging to overflowing with “unearned increment.” The workers pay out of their hard-earned wages, out of pockets that, so far as possible sayings are concerned, are already practically empty. Take the tobacco tax. The Customs duties on tobacco are equivalent to a tax, not of Is 8d to 4s in the £l, but to a tax of £2 16s on every £1 spent on tobacco; while the tax on spirits amounts to a tax of £4 upon each £1 of expenditure. The tax on boots ranges from 5s 6d to 7s 6d in the £l. On ready-made clothing, even of the cheapest, there ia a tax of 5s in the £l. Medicines are taxed 4s in the £1 if they do mot contain alcohol, but £4 per £1 if they do; while bacon, preserved fish, jams, coffeh. and cocoa are taxed 6s 8d in the £1; and so on. But this is not* all. Adding the dealers’ profits to the taxes, *ha Customs tax-burdens on the above-named articles are considerably heavier than the figures stated. The graduated land tax, on the other hand, carries with it mo such added burden. Therefore, even if per £1 of ■ expenditure the graduated land tax were equal to the Customs taxes, it .would still be necessary to add at least 50 per cent to the graduated land tax to make the burden of that tax at all equal to the Customs tax burden! Bearing this fact in mind, and remembering also that practically the whole, of the worker’s wage is of necessity spent upon the simple neces-

saries and the simple luxuries of life, while onlv a small fraction of the squatter’s income is so spent, the following table makes it very clear that the squatter is very considerably undertaxed. and that the worker is proportionately overtaxed. For the purpose of the comparison we have added 50 per cent, for dealers’ profits to the Customs taxes cited above:—

£ s. d. Graduated land tax Is 8d to 0 4 0 iier £ Tobacco tax 4 4 0 „ Spirit tax 5 0 0 Taxes on medicines (non-al-coholic) 96 0 >* Taxes on medicines (alcoholic) 0 0 0 „ Tax on boots 8s 3d to 011 3 „ Tax on clothing 0 7 6 Taxes on bacon, preserved fish, jam, coffee and cocoa 010 0 ~

In face of these figures it is clear that our Customs taxes are much too high, and the graduated land tax much too low —that the Customs taxes ought forthwith to he considerably reduced and the land tax correspondingly increased.