TAXATION COMMISSION

Wanganui Chronicle, Volume LXXXI, Issue 19007, 7 May 1924, Page 5

TAXATION COMMISSION

CHRISTCHURCH SITTINGS (Per Press Association.) CHRISTCHURCH, May 6. At to-day’s sitting of the Taxation Commission, Richard M. D. Morten, Taitapu, and president of the Canterbury A. and P. Association, gave evidence against the land tax, which he said was a class tax and an evil example of a capital tax levied on primary industries. The remedy, if capital were to be taxed, was a property tax. That w T as one levied on all landed property, since capital invested in property was so invested for one reason, a remunerative return. The invention of unimproved values to suit land tax methods was merely an aggravation of the evil, since the improvement of the land automatically advanced its unimproved value, since the latter was the capital value, less that of the improvements. Further, some improvements were not held to be such after a time. The tax had fulfilled to excess its purpose of breaking up large estates. It could not be equitably assessed throughout the Dominion, and the result was very uneven, being influenced by the personalities of the valuers and the state of financial affairs at the time of valuation. In towns and cities the taxation of unimproved values tended to force the subdivision of land into minute areas. The poorer landlord, who could not afford to erect tall buildings, was at a disadvantage as compared with the man who held little land and put his money into buildings. Ebcnezer Hay, sheep-farmer, Pigeon Bay, also opposed the land tax. He said it was manifestly unfair that a farmer w’ho made nothing in a particular year should be compelled to borrow money in order to pay the tax. His own land tax was very heavy, and of late he would have had to borrow money to meet it but for the fact that he had other sources of income. He considered an income tax on the farmer would be fairer. Witness said that the tax on unimproved values was really a tax on improvements as w r ell, though the Department would say that it was not. If there were two farms, one well kept and the other neglected, with soil of equal quality, the gnea farm was nearly always assessed £2 or £3 an acre the higher. Valuers did not seem able to resist the influence of the improvements. He did not know by what method they worked. Apparently each had a method of his own. In answer to Mr T. S. Weston, witness said if income tax placed a burden on the thrifty and industrious man, the same could be said of the land tax. If it were desired to prevent aggregation, surely Parliament could devise some other method than piling on land tax. Mr James Begg suggested that a farmer might be able to evade income tax by making many improvements to his property and showing a small income. Similarly, where the land was being exhausted, part of his income would be made up out of capital. The Commissioner of Taxes (Mr D. G. Clark) remarked that except in the case of the grazier, which it was hoped to meet in the course of time, a farmer had to make income before he put it into improvements. A grazier could improve his property by reducin ghis stock and allowing grass to seed.

Mr Hay, in conclusion, said the day when land tax was abolished would be one of the best in the history of New Zealand. “I have been a farmer all my life,” he added, 4 ‘and I can say the land will bo bettor looked after and improved. There is no encouragement for that now.”