THE FARMERS AND THE LAND TAX.

Tuapeka Times, Volume XXVI, Issue 1814, 22 July 1891, Page 6

THE FARMERS AND THE LAND TAX.

At a meeting of the Sef ton Farmers' Club, the memoers disousßed, amongst other questions, that of the taxation proposals of the Government, and " it was considered that if the Government had retained and reduced the Property Tax, instead of reducing the rate of postage, they would have conferred a greater benefit on the farming community. The imposition of a land and income tax was unanimously condemned." The conclusion arrived at by the Sefton Farmers Club will be generally endorsed by the agricultural community throughout the colony, when they begin to realise what the Ministerial proposals really amount to. They are well aware that Ministers have endeavored to represent their proposals as giving substantial relief to the small farmers. But the farmers have not yet forgotten the laud tax of 1878, and its manifest injustice to the agricultural community. They know perfectly well that the whole aim and object of the land tax is to place the occupiers of land in a different position to the rest of the community. They are to be taxed in a special manner, and treated differently from other people. The tax on land at its lowest rate is to be Id in the £, with a progression when applied to larger estates, while other people are only to be taxed on their income, and, moreover, at a lower rate per cent. A penny in the £ is equal to at least Is 4d income tax on the average earnings of agriculturists. They are to pay this whether they make an income out of their land or not. If they make a loss they have to pay the tax all the same. It is different with the trading and professional community. They are only to be called upon to pay if they have an income ; if they make none they pay no tax. But a farmer nuy see his year's labor go with one week of rain or one day's nor'-wester. The tax-gatherer, nevertheless, will make his demands, and these demands will have to be paid. Nor is this all. If a farmer is unwise enough to borrow any money to improve his estate, the lender will have to pay, not the income tax, but the land tax. At 6 per cent, this is a tax on incomes of la 4§d, while if he lends his money on some other security he will only pay tbe income tax of Is in the £. The evident object of the distinction is to discourage the lending of money to farmers and agriculturists generally. It will pay a lender better to seek other investments, and the natural consequence will be that the rate of interest on money lent on land will rise. — ' Press.' The Government scheme does not merely select land for special taxation. The incidence of it is to be progressive, with the avowed object of bursting up tho large estates. If that object is successful, the revenue will not, as we have in former articles shown, be obtained, because the large estates will have disappeared. Even if they do. not disappear, their value will be reduced, and the revenue will proportionately suffer. In either case the Government will have to look around for other sources of income, the exemption now offered will be lowered, and probably be wiped out altogether. Then, as we have already urged in these columns, the turn of the small holder will come. The value of Government bribes to farmers may be estimated by what has happened in South Australia. In that colony they have a land and income tax. The land tax is Jd in the £on the unimproved value of the land. The income tax is 3d in the £ on incomes derived from personal exertions, and from property 6d in the £, with an exemption of L2OO to each taxpayer. When the tax was first introduced the farmers of that colony were induced to accept the land tax by the insertion of a clause relieving them of the income tax on certain conditions. These were that the income from land should not be included, except so far as such income shall actually exceed 5 per cent, on the value of the land. The object of Buch a clause is obvious. It was inserted in the Act so as to prevent a farmer from paying double taxation — a land tax on his land and an income tax on the income derived from the land. But that equitable arrangerr ent did not last long, for in 18S7 the clause was repealed, and the farmer was left in the delightful position of being called upon to pay a land tax and an income tax on the income derived from the land ; and, as far as we are aware, the farmers of South Australia still continue to pay the double tax. We desire to draw the special attention of our farmers to what we have just said. The agricultural community in South Australia were induced to accept the principle of special taxation on land on the understanding that its incidence would be equitable. But, having allowed their representatives to affirm tbe principle that the taxation of wealth invested in land is something different from the taxation of wealth represented in other forms, they gave themselves away. The relief they at first obtained was withdrawn, and now in South Australia land is especially taxed as land, and the owners' income from it is taxed in addition. The same, we are convinced, will happen in New Zealand, although probably not quite in the same way. The exemption for improvements will either be lowered or removed, and a much higher rate imposed all over. There is little prospect of the present proposals, if carried, being permanent. The bribe held out to the farmers to accept the scheme when it has served its purpose will, in all probability, be withdrawn ; but the special taxation of land will remain, and be applied rigidly to all landowners alike. Instead of beginning as now at a penny, 50 per cent, increase will probably be demanded. We may even see the income tax extended to all classes of income, including that derived from land, and the farmers called upon to pay twice over, as they have to do in South Australia. — Ibid,