INCOME TAX.

Colonist, Issue 1165, 4 December 1868, Page 7

INCOME TAX.

(From The Nelson Colonist, November 10.)

That an Income and Property Tax is surely, if slowly, coining upon New Zealand we do not doubt. That occurrence lias been a fixed principle with us for years. We believe this journal was the first to suggest the tax being made law ; and oh one occasion, ! after a speech by Mr. Stafford, we said if lie would seriously set himself to carry that tax, lie would gain for himself credit as a financier. He has long professed a favor for this tax ; but though he must see that it is, and ha 3 long been, the policy best adapted for New Zealand, he lias never seriously pressed it on the House or the public. He has never studied its operation, or if he has, he has never deigned to " educate" the public or the press thereon. We say the public or the press, for, in fact, with, very few 1 exceptions, neither is well acquainted with its working. Had Mr. Stafford set himself earnestly to bring that tax into operation ; had he staked his ministerial existence upon it ; agitated it; and proceeded with honesty of purpose to " propagate discontent" with the existing system of taxation, and shown the good that would arise from a well-conceived plan of Income and Property Tax; he would have saved the country no little expenditure. His professions in' favor of the tax were good as far as they went, but his practice was simply nil; tho people were not educated up to it, and he did nothing to supply tho want. What we have said before of tho advantages of direct taxation need not here be repeated ; but as there appears to be a hankering after a scheme of Income and Property Tax, applied to and worked by the Provinces independently, and at varying rates, it seems necessary here to re-state tho assertion that the position occupied by the advocates of such a course is untenable. Yet this is a favorite idea of his Honor our Superintendent; and is repeated by another hand in a recent series of letters on finance. But really theargument in favor ofau Income and Property Tax locally worked, is just as valuable as " skeleton" Acts of Parliament would be, another favorite point with Mr. Curtis. We have nover yet seen a skeleton Act of Parliament; and Mr. Curtis, although ho has three times advocated it, has once not attempted to explain it, or to show what such an Act would be like; and the same may be said respecting a local Income and Property Tax. Apart from the necessity of separate local staffs which it; would engender, the thing would simply be useless as respects one of the principal objects of the tax—that is the taxing of the absentee. A Property and Income Tax to be really effective a? a direct source of revenue and an indirect cause of retrenchment, to reach the money which is withdrawn every year from the Colony, and paid in the shape of interest, to persons living out of the Colony, must be Imperial — general, not local. A loenl tax would be of little use; but suppose it did exist, and it were possible for each Province to establish a certain hold on the absentee ; the varied rates, five or six, or more it may be, would create such continual confusion as to render the thing unworkable. Au income tax levied by the General Government would bo one and all-embracing. A local tax would, in the first place, miss entirely the incomes derivable from tho interest payable on the seven millions of our debt, for of course that debt being now consolidated, is wholly removed from any interference on the parb of the Provincial Governments ; and therefore, the interest on what wera once Provincial debts would be wholly free from the operation of Local IneomoTax, to which properly they ought to be liable. Neither could the General Government debentures bo touched by tho locul tax. Thus the tax on something like half a million a-year, would, under this local scheme,be lost to tho Colony..

Between the various Provinces too, difficulties that could not easily, if at all, be adjustable would arise ; and with respect to the incomes, derivable by private mortgagees residing out of the Colony, from interest of money lent on mortgage within it, there would spring inextricable confusion from tho various and probably ofcen shifting rates which would exist in the different Provinces.

Without, at present, going into elaborate technical details, or referring to the necessary machinery of assessment and collection, all of which, however, confirm us more and more in our opinion, we are firmly convinced that a local Incomo Tax in each Province would simply destroy the useful effect of a tax which, applied imperially, would benefit the country at large. It is the business of those who advocate the local system, (which would be but peddling as compared to a great concern,) in preference to a general tax, to show the superiority of the former over the latter. No proof of this has ever been attempted, nor do we thinf it can be produced. An Income Tax is as much an Imperial affair as is the Post-office or the Customs. Wo said this long ago, and we have never seen it refuted.