South Canterbury Times, MONDAY, JANUARY 21, 1889.

South Canterbury Times, Issue 4911, 21 January 1889, Page 2

South Canterbury Times, MONDAY, JANUARY 21, 1889.

Every schoolboy knows that old story of the man who grumbled at the blacksmith’s charge for shoeing his horse, but agreed to pay him by giving a farthing for the first nail, a halfpenny for the second, a penny for the third, and so on, and finally found out he had made a bargain that would break a bank. There has been a good deal of talk in New Zealand about the necessity for a sliding scale of property tax, to make those pay most who have most. Our legislators must be mindful of the blacksmith’s arithmetic in making up a scale. Mr Ballance has been so. Perhaps he worked it out himself, but whether he did or no he gave some clerk in the Property Tax department something to do, to work out a sum of that kind. Last session he moved for a return in this shape : —“ What increase of property tax would have been receivable during the past financial year, if the tax had been graduated on land owned by any person (deducting the amount of any mortgage) at the rate of an additional farthing in the £ on each £SOOO (or part of 'such sum) in value above the firstjj£sooo ? Also, what would be the percentage of the income from each class of property which such graduated tax would absorb, assuming property to yield a net income of 5 per cent ?” The answer to the first question had to be made out from the property tax returns, and the reply given in a paper just published is, that such a graduated tax would have produced an additional £120,639; £104.,030 from persons and £16,609 from companies. The second question required a lot of figuring to find the answer, and the result is striking. A complete table is given showing the rate of tax on each successive increase of £SOOO up to £375,000, when the rate has mounted from Id at £SOOO to Is 7|d in the £. Assuming, as laid down, that property returns an income of 5 per cent, the half of this income is absorbed by the graduated tax on a property worth £105,000; the whole of it by the tax on a property worth £225,000 ; 30s in the £ or 150 per cent of the income, on a property worth £345,000; and £1 12s 6d in the £ or per cent of the income, on £375,000. A property worth £150,000 after deducting mortgages would have to pay £2890 12s 6d a year; a property worth £375,000, £16,015 12s 6d a year. With a sliding scale tax of that sort there would be a vast avalanche in real property.

The preparation of this paper, it appears, was not done by the property tax staff, unless it was in overtime. A note at the foot of the return states its preparation cost £2O.