INCOME TAX BILL NOW BECOMES LAW.

Star (Christchurch), Issue 18577, 27 September 1928, Page 14

INCOME TAX BILL NOW BECOMES LAW.

QUESTION OF LAND TAX UNDER DISCUSSION. Per Press Association. WELLINGTON, September 26. In the House of Representatives tonight, the Hon W. Downie Stewart moved the second reading of the Land and Income Ta:* (Annual) Bill. Mr Savage said this offered a suitable opportunity to discuss the question that while a farmer paid no tax oq income derived from his farm, a city dweller paid both land and income tax. The argument was that if a farmer paid income tax he would be taxed twice over. At the same time, that argument was not applied to the city dweller, who was taxed twice over. If a small farmer was asked to pay income tax he probably would not do so, because his income would be too small, but the speaker maintained that income, no matter what its source, should be assessable for taxation. He quoted several speeches made by the present Minister of Justice, when a private member, in support of the contention that farmers should pay income tax. He did not know whether the Minister still held these opinions, but as he voted with them once he might do so again. The Minister of Education was in the same box, so that when they had two Ministers on their side there was hope. Mr D. Jones (Ellesmere) said that the small business man did not pay income tax any more than the farmer did. The city man did not pay dual tax until the large business man was reached. If the Minister abolished land tax in towns he doubted if the Treasury would lose a great deal. He had expected that Mr Savage, having a carefully prepared 6peech. would have presented some specific instances . He had not done so, and, so far as one could see, be was striving to relieve the large taxpayer in towns. That seemed to be the settled policy of the Labour Party. The speaker did not want to relieve the large land-

owner of taxation, he did not want to abolish graduated tax, because to do that would mean land aggregation, but he did want people to understand that the Labour Party wanted to pile up more taxation on the man on the land, and he wanted them to understand that the farmer was now paying his fair share of taxation. SIR JOSEPH WARD’S VIEW. Sir Joseph Ward said the principle underlying the land and income tax when instituted was to exempt the small man. and he thought people still favoured that policy, because these people contributed largely through the Customs. He had never believed in dual taxation, except in time of war. It had to be done during the war in order to get sufficient revenue to carry on, but it was an emergency measure, and should not be continued. The man who should pay now wasMhe man whose interests had been preserved by the successful issue of the war. It was not so much the man with a large area of land, but the man who was getting a large income out of his land. It was from that point of view that the country had to look at the situation and tax the men who had got benefit out of the preservation of the country. Those men who had not paid their ; quid pro quo. and they should be made Ito do so. That was the problem we j had to solve. The Hon D. Buddo said the whole system of taxation should be reveiwed by experts, but he did not suggest that the incidence should be altered. Company txation should be readjusted. The Minister of Finance, in reply, said he would not enter upon a general discussion on the question of taxation, but he agreed with those speakers who had said the land tax was almost entirely paid by large landowners, the position being that two-thirds of the farmers paid only one-twelfth of the tax. He was aware large landowners would prefer to pay income tax. The Bill this yea*- was the ?atpe as that of last year, no alterations of any kind being made. The Bill was read a second time and the House immediately went into committee upon it.

The Bill was reported without amendment, read a third time and passed.