The Taranaki Herald. PUBLISHED DAILY MONDAY, DECEMBER 2, 1889.

Taranaki Herald, Volume XXXVIII, Issue 8643, 2 December 1889, Page 2

The Taranaki Herald. PUBLISHED DAILY MONDAY, DECEMBER 2, 1889.

The Property Tax was due and payable on Friday last, but fourteen days of grace are allowed, after which ten per cent, will be charged on all amounts remaining unpaid. This tax is far from a popular one, and has tended to keep a large amount of money from being introduced into the colony. The sum raised by the Property Tax is about £350,000, as near as possible what the Educational system costs the colony so it may be said that the Property Tax really pays for the education of the children in New Zealand. Every session an attempt is made to change the system of taxation, substituting a Land and Income Tax for the Property Tax, but the majority of the House ha^e hitherto decided otherwise. We are amongst those who believe that the Educational Department should be made selfsupporting, and then the Property Tax could be abolished ; but whilst the House wills that it shall not be so, then that is the best way for collecting the sum required. There can be no doubt that those who most benefit by the educational system pay little or nothing towards it ; and for this reason some better adjustment of the Property Tax is necessary. If, however, the £500 exemption was altered, and all who owned property over £100 in value had to contribute, we believe such pressure would be brought to bear on the House that the Government would have to find some other substitute for this rather unequal and, we tlu'nk, unjust impost. Last session a return was laid on the table of the House, which shows approximately the amount of revenue which would be derived from an income and land tax if imposed. The Property Tax Commissioner was asked to give an estimate of the revenue that would be derived from a land tax upon the unimproved value of freeholds of cultivatablc land, with an exemption of £500, at the rate of f d in the £ on the first £1000 of taxable value ; Id in the £ above £1000 and up to £5000 ; 2d ] in the £ above that sum and up to i £10,000 ; and 3d in the £ for all over. ! The Commissioners, however, intimated to the House that there was nothing in the returns of the assessors to indicate what are cultivated lands, and no information in that direction could bo obtained from the 1 owners' own statements. With regard to tho income tax, Mr Sperrey was askeS^'what revenue would be derived from a tax upon all incomes exceeding £200 a year derived from any source other than land, at the rate of 3d in the £ on the first taxable £100, with a progressive increase of Id for each additional £100, up to and including incomes of £1000 a year, and thereafter 5 per cent, on all incomes up to £5000 ; 7^d per cent, to £10,000 ; and 10 per cent, above that sum. In reply to this, the Commissioner says he has not the information that would enable him to give a reliable return, and, unless a test were made by getting actual returns of income from residents in some districts, it would be impossible to give data that would afford a basis for a correct estimate to be made. " Mr. Sperrey, however, furnishes a statement giving the amount of property tax paid by certain companies in 1888-9; and also an estimate of income tax that would be payable by the same companies under the plan proposed above." These are manufacturing companies, we presume, for Mr. Sperrey says, " shipping, fire, and life companies are not included." The return is as follows :—: — £ s. d. Property Tax paid ... 74,870 5 11 Estimate of Income Tax... 34,209 14 2 The total sum borrowed on debentures by the companies included in the above is £8,4G7,029, the interest on which is £378,623. The interest, the Commissioner says, would have to be deducted from the profits of the companies, and if the income tax were charged on the lesser amount it would come to £31,022 2s sd. Mr. Sperrey takes a few suppo- \ sititious cases to show the effect of a land and income tax, as proposed, in which* presuming there were no mortgages, he shows what the taxes would yield. Prom the property tax at Id in the £, the revenue would be £2852 ; from the land tax, on the above scale, £4190 12s 4d ; from an income tax on estimated income derived from personal and real property, £1817 14s 2d. The Commissioner also gives an estimate of what the result would be of an income tax on a number of ratepayers with an exemption of £150. He says : " I found that 6330 taxpayers would pay in respect of income from personal exertion as follows : Doctors 300, lawyers 400, clergymen 250, dentists 50, bankers 80, insurance officers 50; engineers, architects, auctioneers, &c, 200; bank clerks GOO, clerks to local bodies 50, insurance | clerks 300; mercantile clerks and traders' assistants, &c, 2500 ; managers of companies 50 ; Government officers, teachers, &c, 1500. In addition to the above, the tax would be paid by some 5000 others, including merchants, drapers, grocers, ironmongers, timber merchants, brewers, bakers, and other trades, and also manufacturers. Then there would be 15,000 mortgagees, and some who paid land tax would also pay income tax, so that the total number under tho combined taxes would bo about 22,000. Prom a table published at the end of tliis return showing the amount paid under the property tax system, with the exomption of £500 ; and the amounts that would bo paid under the proposed income tax (the income from property being taken at 5 per cent.) Mr. Sperrey shows that there would be very little difforonoe, th» former being £15,814, whilst tbs

latter will only be £15,171. If we are obliged to have a direct tax the Government cannot, we think, improve on the property tax. The burdens, however, of the country should be borne by all classes of the community alike, and for this reason the exemption should be lowered; but a land tax, and more especially a progressive land tax, means that one class of propei ty which can least afford to be hampered is to bo singled out for penal taxation ; and in order that holders of large estates may be punished, every farmor in the colony is to have an oppressive tax levied on his land.