THE TAXATION PROPOSALS.

Otago Daily Times, Issue 9182, 31 July 1891, Page 2

THE TAXATION PROPOSALS.

(Pbb United Pbess Association.) Auckland, July 30. At a largely-attended and representative meet, ing of the Chamber of Commerce a resolation was passed in favour of the completion of the Rotorua railway. In regard to the Government taxation proposals the following resolutions were carried unanimously, after a lengthy discussion : " 1. That in the opinion of this chamber it is inadvisable to continue any tax upon improvements ; that the progressive principle should not be introduced into our legislation, and that no exemption should be marie in taxing either land values on incomes, bat such amounts as do not pay for the collection. 2. That the proposals are calculated to harass capital and labour and cripple enterprise, and must inevitably injure the general trade and commerce of the colony, besides being unequal and unjust in their operation. 3. This chamber is further strongly of opinion whatever changes are in contemplation should be completed this session in_ order that uncertainty may not continue to hinder enterprise." The chamber also passed a resolution expressing a strong opinion that it is inadvisable to legislate in the direction of abrogating the right to obtain freehold tenure. Wellington, July 30. At a special meeting of the Chamber of Commerce this afternoon to consider the taxation proposals of the Government, the following resolution was carried unanimously :— I " That in the opinion of tlis chamber the proposals contained in the bills embodying taxation and the general policy of the Government cannot fail, if carried out, to check the further progress and settlement of the colony, and be injurious to all classes of the community, but especially to the wage earners; that this chamber therefore urges the Government to modify their proposals, or to deier bringing the bills into operation until the country has had time to consider whether they should be passed into law in their present form." At a meeting of the Canterbury Chamber of Commerce to consider the taxation proposals of the Government, Mr G. G. Stead said:—"l have taken some trouble to try and understand the contents of the Land and Income Assessment Bill as printed. Assuming that the all-round tax of Id in the pound, as mentioned in the Financial Statement, is imposed in addition to the graduated tax, as provided for in the present bill, the following illustrations will show how some of our joint stock companies and fellowcolonists will be affected by it:—A company or individual owning land of the aggregate value of £210,000 would have to contribute 2£d in the pound, or £2406 5s par annum, if the properties are unencumbered. Assuming that these properties, after deducting local rates, earn for the owner a net 5 per cent., which is above rather than under the average, his land tax contribution would be equal to 43 7d in the pound. But the case is far worse if the unfortunate owner happens to be mortgaged, say for half the value of the land, that is, for £105,000. In this case he would only be permitted to deduct £437 10s on account of his mortgage, thus making bis own contribution £1968 15s, and on the assumption that the properties earn 5 per cent., half of which hR3 to be paid as interest to the mortgagee, the owner's net income of £5250 becomes subject to a land tsx of £1968155, or 7s 6d in the pound; whilst the mortgagee only contributes Id in the pound on the capital value, or equal to Is 8d in the pound on his net income from the mortgage. With smaller properties the incidence becomes less severe, but the following figures will give some idea of the ratio of the burden :— Value of Graduated Batloto Land. la*- Inoome. In£. £ £ a. d. B. d. 100 000 ... If unencumbered ... 833 6 8 .3 4 moooj™^™} o*-o o 6 o 50 000 ... If unencumbered ... 384 11 8 211 50,000 {IfmO^fv gle OrhaU} W0 8 * * » 10 000 .■ II unencumbered ... 52 1 8 2 1 iflioOO { I£m°? t f v K a f a r ha"} 31 5 0 2 6 But let us take the case of the smaller settlers, who are supposed to be favoured by the land tax. A man that has saved money and bought £1000 worth of land from the Government has to pay £2 Is 8d for an annual land tax, whilst a man that has saved £2000, and also bought land with it from the Government, must pay £8 6s Bd. And, mark you, the money that was received by the Government for the land has been spent in constructing roads and generally opening up the country to make it habitable for the benefit of the whole community. But if a man has saved £2000 and embarks in trade with it he has to contribute nothing to the revenue until his income exceeds £300 a year. And this is called favouring the small settlers. Take as another example two men, each having £10,000. The one buys land with his capital and farms it, whilst the other puts his money into business. Now, if each of these men by the aid of their own labour net 5 per cent, on their capital, the farmer wsuld have to pay an annual tax_ of £52 Is Bd, or 2s Id in the pound on his income, whilst the trader would only pay £10 as income tax, or rather less than 5d in the pound. Is it likely that men will come here to occupy our land if they are to be treated in this way? And yet the cultivation of the soil is an essential condition of prosperity, as it is the primary source from which all wealth springs. In fact here in New Zealand we are still almost entirely dependent upon the soil: for example, of our exports for the year ending 31st December last, amounting to £9,811,720, no les3 a sum than £8,385,988 was represented by direct products of the soil, and if we include gold and minerals, the figures aro £9,228,405._ AlreaJy we hear of securities being realised, and money beiog withdrawn from the colony, whilst on some properties labour is being dispensed with, and.every effort is being made to curtail expenses. I can, if need were, give names and details. Again, I know of intending settlers who, after visiting the colony, have turned their backs upon us, frightened by the character of the tax proposed. Will this addto the colony's wealth, or provide our people with employment? It has been truly said that town and country are mutually dependent on each ether, and, unless they aro placed on an equal footing, there can be no prosperity for either. The time has arrived when we must all recognise that capital is useless without labour, and that labour is practically helpless without the aid of capital. You cannot attack one without injuring the other, any more than you can lop off a man's arm without injuring his body. This bill, however, specially jingles out capital for attack, the author of it evidently overlooking the fact that labour must suffer if capital is destroyed. Companies carrying on "business in the colony are not to be allowed any exemption ou the amount on which inoome tax is payable; and when they occupy or own land they are only entitled to deduct from their income tax returns a cum equal to 5 per cent, on the amount on which they are liable under the land t ix. And yet joint stock companies are practically necessary for the conduct of certain large businesses; for instance, woollen factories, frozen meat works, insurance companies, banks, shipping companies, &c. re-q-iire a considerable amount of capital to be carried on successfully. Why then discourage them if such companies benefit all ?