Rating Systems

Poverty Bay Herald, Volume LXIV, Issue 19375, 13 July 1937, Page 10

Rating Systems

Sir, —From the rating discussion we are to believe that rating on unimproved value is neither equitable nor reasonable. Yet a lew years ago the ratepayers of our capital city adopted mat system by a two-to-one poii. inrougnout tins coumry, according to the Olficial Year hook ot 1934, mere were 333 local bodies using this system. Surely there are in those districts men capable of seeing the defects of the system, or should we send our local advocate to teach them. While he is away he might look up tiro Wellington champion ot rating on unimproved value, Mr. .Justice O’Regan, to whose efforts was due the adoption of this system ol rating in Wellington.

The Poverty Bay advocate might then question Mr. Justice O’Regan as to the. equity of land taxation. Mr. O'Regan may then quote from Adam Smith, the illustrious founder of the science of political economy, who laid it down that a statute authorising a separate valuation of land and improvements should be a fundamental law of the commonwealth, and who maintained that the unimproved value of land—called by Smith “the ordinary rent of land” in reference to country land, and “the ground rent of houses” in the case of urban land —is the fairest subject of taxation. If the advocate wishes to see ihe arguments opposed to his view, it is suggested that lie obtain a copy of the book entitled “Nature’s Budget,” by James Dundas White. The keynote of this book is that the natural resources of the country should be regarded as belonging to its people, that their rental values should be treated as Nature’s budget for public services, and that there should be no taxation of improvements or of food or of industry. The author has made a special study of these matters. He was a member of the House of Commons for 12 years, and was Parliamentary private secretary to two Cabinet Ministers. He is a barrister and L.L.D. (Cambridge), and might know a little concerning taxation, local or general—Yours, etc., R.U.V.

Sir—Mr. C. H. Williams has endeavoured to enlighten your correspondent “Farmer” on the iniquities of the present rating system. I am afraid the further he goes the more he flounders. At the outset I set out three different systems of taxation in vogue during the last GO years, (1) the old property tax; (2) the tax on capital values; and (3) the tax on unimproved values. Mr. Williams dubs the last, and by far the most reasonable and scientific system, “antiquated.” By what law of logic he does this we will leave your readers to judge. Then he calls the “graduated land tax” and “the values created bv the community” into question. These values are not called into the question. Mix Massey used them for taxation purposes and I do not think that even Mr. Williams will venture to call Mr. Massey a “Socialist” or an “antiquated individual.” Then he says that a “continuous rise in values bolstered up the antiquated system until 1929, when an extra heavy demand caused its complete breakdown and exposed its inequality." This is hardly correct. What, happened was a collapse in prices together with heavy interest rates, against which no system of local taxation would have withstood or have been helpful. It is quite futile Mr. Williams trying to defend such an antiquated, illogical, and oppressive system of taxation as the tax on the farmers’ improvements. It cannot be justified.

Your correspondent “Unimproved Values,” who referred to the cutting out of the fig trees, and also the very effective argument of Mr. R. T. Kolierc should be conclusive. A Maori living in his native whare was assisted by a soldier son to build a house of wood and iron. As soon as this was done he was taxed on this improvement. Could stupidity be carried further? Just one more point. A man in town bought a section for which he paid £230. There was a building worth about £SO on the section, which had also been levelled and terraced and fenced. Shortly afterwards, Government valuers assessed him at £330 unimproved. Was that the fault of the system or the valuer? The purchaser really paid about £175 for the land, plus the improvements. If Mr. Williams will give his attention to valuations instead of endeavouring to bolster up an antiquated and oppressive system such as the capital value system is he will be better employed. —Yours, etc. FRANCIS STAFFORD.