The Timaru Herald TUESDAY, JULY 14, 1908. CONFISCATION BY TAXATION.

Timaru Herald, Volume XIIC, Issue 13646, 14 July 1908, Page 4

The Timaru Herald TUESDAY, JULY 14, 1908. CONFISCATION BY TAXATION.

We have very■ HbUe donhb that: the Rev. Mr Guthrie! would have- no I 'hesitation, in including .. ionnseatory.-takftion in.' (he scope of the?scathing denunciation which he applied on Sunday night, to the move barefaced, but none the loss defensible, methods of nationalising private property. On that point, however,"-he may safely be left to make his own reply, if he sees fit, to the correspondent who criticises his address in a letter which we publish this morning. To our mind there is no distinction *o be drawn between confiscation by prohibitory' taxes and confiscation by a, -simple' resolution of Parliament. The proper function of taxation was stated many yeans ago by the Duke of Wellington, in blunt language which might have been blunter still if he had happened to live ..in the present generation. ."He thought; taxes were imposed only for the service of the State," said the Duke on one occasion. " If they were necessary for the service, of the State, in God's name let tthem be paid ; but if they were not necessary, .they ought, not to be paid and the-Legislature ought not to impose them." We have'not had to wait, very long in New 'Zealand to discover that confiscatory -taxation simply means additional liabilities for the people at. whose direction it is imposed. We have already quoted from the Financial Statement delivered by Sir Joseph Ward last week to show- that (.he effect of Hie penal graduated tax which was introduced with" the idea of limiting Stale borrowing for (he purposes of close settlement, has simply resulted in an. extension of State borrowing . to provide financial accommodation for settlers taking up the land which the tax has helped to force into the market. Hence, the graduated 'tax is in reality no more a measure of confiscation than the original repurchase scheme Jo which our correspondent so mistakenly appeals as an instance of what he is pleased to term a bogey which 'alarms' nbne : but the veryignorant. When that policy of resumption was first suggested, there was no doubt some* W-ildly hysterical talk about confiscation, but no -'charge of plain theft could be laid against a scheme which guaranteed ;tp the dispossessed owner the full market value of 'the property that was taken, from him. The State in' coiromion honesty had to pay the owner every penny, and perhaps more; that his property" was worth, so that this particular legislative iratance does not give much assistance to tha : Socialist who is looking '. for practical arguments' in support of a, confiscatory theory. ! . It simply bears out Mr Guthrie's argument that the honest nationalisation of the land is a sheer impossibility, owing to its prohibitive 'cr»t. New Zealand has been spending half ;i million annually on nationalising big estates, and because he found its indebtedness on tjiat account growing beyond safe, dimensions, the Hon. Mr McNab decided

to try a Teal confiscatory method' of providing land for people -who wanted to get, it on easy terms. First of all he. proposed that every largo estate .should within two years be reduced to a maximumi unimproved value of £40,000, thus depriving 'the owner'of the. security lie enjoyed muter the resumption clauses of t.lie. Land for Settlement, Act. that, when hewas expropriated, he would receive full value, for what, wa.s taken from him. In the end the Government! abandoned this limitation idea in favour of a penal tax to compel largo .holders to part with their land, and'still we find that, indirectly iha State has to provide, Ilie money lor, buying out these owners -J'he Premier, proposes. •io raise the borrowing powers "of Iha Advances to Sellleik Department by a million -in order to meet, the demands of settlers who are taking'up die land thrown on the market, by the graduated tax, while .he is also proposing a fresh iifhemo by which .the State, will finance associations of settlers in the purchase and subdivision of Mocks of country. So long as New' Zealand honeully . pays in. this way for the estates it takes from, one* man to parcel among half a dozen'others, it is quite useless for (he confiscatory Socialist, to look to it as a concrete example of his theories, while an antiSocialist of Mr l.)iithrie\s views can easily quote it in proof of liTs assertion that 'ln? cost of buying out, all tlio landholders of a country makes honest nationalisation, an impossibility. ,