UNPOPULAR MEASURE LAND AND INCOME TAX PROPOSALS

New Zealand Times, Volume XLVI, Issue 10719, 13 October 1920, Page 6

UNPOPULAR MEASURE

LAND AND INCOME TAX PROPOSALS

HOUSE OF REPRESENTATIVES I s The House of Representatives met at 7.30 p.m. last evening. HOSPITALS BILL. EEFERRED TO -COMMITTEE: Tho Hospital and Cha-ritable Institutions Act was read a first time, read a second time pro forma and referred to the Public Health Committee. THE TAXATION BILL. QUESTIONS ANFI)ISCUSSIOXS. The Land and Income Tax Bill was committed on the motion of the Prime Mii'nitifcer. , ",.-.,. Mr J. P. Luke (Wellington North) alsked whether waterworks, tramways, milk supply, and other undertakings of local bodies were to bo taxed, and would the Wanganui Charitable Fund, held in trust by the municipality, and similar funds held in trust by other local bodies, be subject to income tax? He protested against local bodies being required to collect the income tax on their debentures; and contended that where local bodies had the monopoly of tramways, waterworks, electric lighting, milk supply, and so forth, so that they did not oome into competition with private concerns and were not run to make profits, they should not be taxed. Replying to Mr G. Witty (Riccarton), the Prime Minister stated that in the case of debenture- holders whose incomes came below the exemption limit the income tax on the deberMfes would not be collected. It would be the duty of the debenture-holder to inform the local body that he was not liable to income tax, and then the tax would not be collected from Mm. ~,,,,. , Mr J. McCombs (Lyttelton) strongly opposed the collection bv local bodies of the income tax on their debentures. The State Taxing Department should be armed with sufficient powers to carry out their work, instead of imposing part of it upon the local bodies. He pointed out that under the increase from .£25 to £SO of the exemption from income tax in respect of children under 16 years of age, the man with .£SO a year and four children escaped taxation to the amount of £l2 10s, or £3 2s 6d per child: while the man with .£IO,OOO a year, with four children, ' through dropping by reason of the exemption into the .£9BOO grade instead of the ,£IO,OOO grade, escaped taxation,-to the amount of £137. or £3-1 5s iper child. . This was. surely, a gross anomly? "TAX THE PROFITEERS."

The Hon. J. A. Honan (Invercargill) said that the huge incomes made bv the profiteers should be more heavily taxed. He should like to see a return showing the number of individuals, as apart from companies, with incomes of .£SOOO and upwards. He urged the (necessity for ! such a land tax as would effectively put a stop to that land speculation which was a .menace to industrial prosperity I and to the national welfare. Mr "W. D. Lysnar (Gisborne) contended that the taxation on big incomes—now up to 8s 9d in the ■£ was already high enough. He held that companies weip being too heavily taxed; and that they should, instead, be encouraged to develop the industries of the country. Such heavy taxation would hamper and retard the development of the industries of the Dominion. He contended that under the debenture tax proposals, companies and individuals with big incomes would rush after local body debentures, the taxation on which would be limited to 2s 6d in the £ instead of the 8s 9d to which they would otherwise be liable. Dr. Newman (Wellington East) thought that the debenture tax proposal would be found to be a "pretty considerable nuisance" and would put a good deal of work on the local bodies. He approved of the higher taxation on companies, and thought that the bill as" a whole was a very useful measure. Mr W. A; Veitch (Wanganui) complained that he had been given no opportunity to move for a return, though he had given notice to do so early in the session, "ehowing. for towsn and country separately, the total number of freeholders, also the total area and the total unimproved value and capital value of the land held toy them, in. each of the following land value groups: (1) Up to jiSOO unimproved value • (2) between ,£SOO and, .£SOOO unimproved value; (3) over ,£SOOO and under .£50,000 unimproved value; and (4) over .£50,000 unimproved value. Such information should not bo difficult to supply; and he contended that it should have been in the hands' of members before the debate on the Land and Income Tax Bill was taken.

Mr Massey said that ho had already explained to the House why the return could not be given. Mr Veitch. replied that ho had not heard tho explanation. Mr Massey: I understand that the hon. member was out of the House at tho time. I will give him the explanation.

Mr Veitch regarded tho debenture tax provision as a substantial concession to holders of local body debentures. (Hear, hear.) Mr C. E. Statham (Duncdin Central) welcomed tho distinction now made in tho bill between earned and unearned incomes. He had called attention to the need for it last year, and had been instrumental in including it in the platform of the Progressive party. Mr Massey: Where is that party- nowP An hon. memlier: They never men. tion it now. (Laughter.) Mr Statham held that the man getting ,£SOO or .£6OO a year should get a bigger exemption for each child than tho man with the big ineomo. It could bo very easily arranged. "BOLSHEVISM 1" Mr Statham held that tho big man's income tax on local body debentures should-not be limited to 2s M in tho £. Ho urged, too. that there was nothing to prevent a tax dodger having lids debenture interest collected abroad, say, in Sydney, thus escaping the tax. He considered that the individuals should be taxed on their incomes and not the companies; though companies in cop sideration of their limited liability privileges, <tt\. should pay taxation in another foim than income tax. To prevent profiteering in land ho would take in taxation nine-tenths of the profit on land sold within ono year of its purchase, gradually diminishing tho tax on such traisfera till at the tenth year after purchase it ran out altogether

A TCcfcrm member; That'* Bolshevism! (.Laughter.) Mr E. J. Howard: Po you apply that to city land as well? Mr Howard: Then you ought to come over here, brother. ' (Laughter.) Mr Statham snid tha<- he had never been called a Bolshevik before. If that •vns Bolshevism we wanted more of it. (Hear, hear.) Ho regarded land speculation aa one of the. greatest evile in the Dominion. (Hear, hear.) . Mr B. McCallum .(Wairau) advocated

EFFECT ON LOCAL BODIES' UNDERTAKINGS

AMENDM3NTS BY GOVERNOR'S MESSAGE

the betterment system with regard- to public work"". He could not nee why 50 per cent, of tho added vaiuo should not be taken right away. The tax department and the laiiQ valuation tie par tment, lie urged, should be amalgamated under cno control. TAX THE. LAND "TOTE. - '

Mr G. W. Forbes (Hurunui) maintained that the fact that land gambling had been allowed to go on in tho country unchecked was tho causo of a very big burden on tho farmers who did the actual work on the land. It was the cause, too, of a large amount of the trouble among the wage-workers when they saw the tremendous sums made by the ganibters in land. The Government had failed to do anything in these days of one of the record gambles in land in the country. Mr Massey; You forgot that we collect two millions a year in stamp duty. Mr Forbes: That may be, but a tremendous lot of money is being made every day by men in land speculation. Mr T. M. Wilford (Opposition Leader); A large amount of tho stamp duty is death duties. Mr Massey: Under a million. The Hon. C. J. Parr: What do you suggest ? Mr Forbes: A taxation on the money made out of land speculation. We had a totalisator tax, he said; but .the land gamble was a far bigger gamble and the Government had dono absolutely nothing I to tax or check it.

Mr Massey: The single tax is what you want. ...

Mi- Forbes said that what he wanted was a -tax on land gambling. It was a curious thing that whenever a tax on the large sums men were getting out of land-gambling was suggested, ( the Reform Ministers and members at once got up in. arms, contending that there was no such people, and calling those who wanted to tax this big gamble Bolsheviks, single-taxers, and so on. Mr W. D. Powdrell (Patea) contended that the taxation on the big landholders was already big enough. Under the increased land tax, if the man with land valued at ,£135,000 died next year after paying the tax, his property would pay in land tax and death duties that year some £30,000, or between one-fourth and one-fifth of the total value. Mr H. Holland (Buller) expressed the opinion that it would be fair not to tax the £4OO-a-year man until they had brought tho £IO,OOO-a-year man down to £4OO.

Mr O. J. Hawken (Egmont): That is confiscation! M.r Holland: That depends upon the point of view. They shojild consider, he contended, what they left to the taxpayer, not what they took away from him. PRIME MINISTER"REPLIES. SOMEI EXPLANATIONS. Replying on the debate, the Prime Minister said- that waterworks, trams, electricity, and milk supply wero not to bo taxed. Mr Youngs What is your definition of a municipal trading concern? Mr Massey: The Auckland fish supply is an instance. Charitable trusts, he added, were not' taxed. They wero exempt under the prinicpal Act, and there was no alteration in regard to them. Replying to Mr Wilford, Mr Massey admitted that the Treasury would lose en the debenture tax proposals in tho case of the bigger men who would pay 2s 6d in the & only in place of 7s ftd; but it would Rain more, he held, by preventing the escape of many who ought j to pay income tax on their debentures but did not now do so. The result would bo to make local body loans more attractive to the blir investors, and would thus help instead of handicapping local body finance. For tho future company income tax would not be on tho Cross income, as hitherto, but on the taxable income—i.e., the income after taking off tho exemptions. He had previously explained, he said, that the return asked for bv Mr Veitch was too bulky to b© supplied this session. It would require a large staff of clerks and a, lot of money, '

A '-Labour member: Wasn't that Mr (Mitchell's return. The Hon. E. P. Lee: It was Mr Mitchell's return.

Mr Massey: Yes; but the same reason applies. He quoted figures showing that a somewhat steeper grade of income tax than that in the bill would amount to 20s 8d in tho £ at .£15,000. That, he claimed, showed the impossibility of a steeper grade. Mr Holland : You should begin *t tho top and work downwards. At 11.55 p.m. the House went into committee on tho bill.' Mr Wilford moved to strike out clause 10, which he considered abolished the absentee tax. ' On a division the clause was carried by 37 votes to 9.

The Prime Minister accepted an amendment by Mr Wilford. making clause 26 rend "that a refund shall be claimable, when a payment has been made in excess of the amount properly payable." The Government amendments dealt with elsewhere were all agreed to. At 12.50 a.m. the # bill was through committee, at 1 a.m. it was Tead a third time, and the House then adjourned till 2.30 this afternoon.

and digestion are closely related. Keep the bowels in order by taking IMPBY'S MAY APPLE and good health will bo yours.

A Hutt resident states that iho seeds ol the blacktwrry posses* great vitality. During February last he gathered blackberYios at Kaitoko for the purpose of making wine The fruit was boiled to abstract the juice, and the pulp, containing the seeds, was subsequently put in a heap in a corner ol his garden. Recently he haft occasion to examine the heap and was surprised to disoover that hundreds of the eeeds had germinated.

Combat the strain of modern business'life. Take SHARLAND'S BEEF, TRON AND WINE. It stimulates steadies, the nerves, and imparts vigour.

Sitting in civil jurisdiction, Mr J. S. Bvans, S.M., yesterday gave judgment for plaintiff by default in each of the following undefended civil cases:—ll. Baker v. T. Caitei £2 i"a Cd, costs £l is 6d; Hugh McCluro v. T. Vincent £,> Os 9d, costs £X Bs'6tl; ,T. T. Lewis, Ltd v. D. Byrne JEW 11», costs £2 14s; Hope Gib bons and sons and J. B. Clarkson, Ltd. v. Ticky and, Collins .£! Os sd. costs 8s; "The Dairyman" Newspaper v. W. E. Bartley £6 Os 2d, costs XI 14s 6d; A. Cocks and Co., Ltd. v. M. T. Souness <£B Is, costs £1 14s 6d. D. Hawitt hob ordered to pay the City Milk Supply Co., Ltd., JZi 10s 3d by October 19th, in a judgment summons case.

It's (rood-bye to liver and digestive disorders if you take IMPEY'S MAY APPLE. The fjentle laxative that aids nature—let it help you.