Land and Property Tax.

Those in this meeting who were in the Colony in 1878 know that I then advocated the land tax, and I may say that I have not seen any reason to change my mind.— (Applause.) The question is, whether a land tax or a property tax is the fairer tax. Let us test it. Major Atkinson told us that if a man had £1200 worth of land, and the State demanded £2 10s per year from him, that he would term "confiscation." It is an ugly word, "confiscation and it is said that to take £2 10s a year from a landowner who holds a monopoly over that which he never made and never created is "confiscation." Let us see: If I come to this Colony with £1200 worth of goods—we shall say jewellery,—what does the State officer demand from me before I land them? The demand on the goods is 15 per cent, of their value—a very different thing from the £2 10s on the £1200 worth of land. I ask what would you call that tax which says to a man with £1200 worth of goods, You must pay me 15 per cent, on page 4 their value? Would "confiscation" be too ugly a word to use? But that is not all. He has paid the 15 per cent, on the jewellery, and he may be told by the Major, "You have paid the duty, and it is now in the Colony, and you can put that 15 per cent, on and charge it to the person who is buying it from you.' Well, let us see how that works. We will now take the property tax. The property tax is a tax on what the thing is worth. Then he has to pay this halfpenny in the pound on the £1200 worth of jewellery, and he has to pay the halfpenny in the pound on the 15 per cent, he has paid the Government; so that he is taxed on the tax he has paid. What would you call that? Would confiscation be an ugly word for it? And then I ask you, in dealing with this question of property tax and land tax, to look at the great distinction between the two. If you have land you have the producer. It is land that is the producer of everything we possess. If you have £1200 worth of land it will produce something: it will produce grass; it will produce grain; it may produce coal or various other things, and without any effort from you it may produce a great many things. But keep the £1200 worth of jewellery, and the longer you keep it the less valuable it becomes. It is giving you no return. It is not producing anything. Yet a charge of a halfpenny on the land, which is the producer—which is a monopoly—is confiscation; but a charge of a halfpenny on jewellery; which has already been taxed 15 percent is a fair and equal tax—- (Laughter.) ask further, in dealing with this question of a land and property tax, that we should look at what is the tendency of either tax. If it is said that the tendency of the land tax is to diminish the value of land, I apprehend that the same tax put on personal property cannot increase its value. Surely that is self-evident. But I ask you, how does the property tax act? We shall say, for example, that here is machinery. Here is a man who wishes to start a new industry. He puts all his money into the machinery. He knows that perhaps for several years he cannot possibly get interest on his money. In starting that new industry he has to work under great difficulties—he has to work under great disadvantages. He has not only to train workmen who will be able to manufacture for him, but he has actually to cultivate a market, so that the colonists may accept his goods rather than prefer the articles they have been accustomed to. During this time he will necessarily lose money; yet upon all his machinery he has to pay a tax to the Government. Is that a way of encouraging production? I apprehend that the object of the State should be to keep two things in view in dealing with taxation. The State ought to see, first that it encourages production, because that is the only means of making the citizens wealthy. Second, it ought to see that its taxation tends to encourage thrift. That is what we have heard spoken of a good deal lately. I ask you how does the property tax act, say, on two men, both getting the same income, both having the same sized families? One man saves a hundred pounds; the other man saves nothing. The one man at once, after the limit of £500 is reached, begins to pay a tax on his savings to the Government; while the person who spends all his money escapes all taxation. Is that encouragement of thrift? But we may be told: "Oh, but the property tax, you know, will stop people from having unused capital that is not productive." I ask, are there a dozen people in this Colony who keep their money in a stocking? And I say if you put your money in a bank it is not unproductive. Every person who knows anything about commerce knows that just as deposits in the banks increase, the facilities for commerce increase. The banks, as they get larger deposits, will lend money out cheaper; and if so, there will be more industries started, more workmen employed, and the capital will be circulating throughout the Colony. There is therefore no such thing as capital unused in this Colony. There are perhaps two ways in which capital may not be reproductive. We have heard something about pictures, and also about furniture. Well, I do not think all the pictures and furniture in New Zealand are of such immense value as to require the Treasurer to insist on taxing them specially. But I say further, it should not ever be the duty of the State to discourage the possession of pictures. If they have been imported they have already paid 15 per cent., and Picture-frames have to pay 15 per cent.; and I say if there is one thing the Colony requires to encourage it is the fine arts.— (Cheers.) In order to create true humanity in this Colony, we must have culture; and I say there will be no proper culture—I do not mean culture for the few, but for the many—until we have in all centres of population large picture-galleries, so that the minds of the people can be continually elevated.— (Cheers.) Therefore, if it is only for the sake of getting at pictures, surely the Government, instead of trying to discourage the fine arts, should do its best to encourage them. Where you have a love of the beautiful you will necessarily have a dislike of vice.— (Cheers.) Another thing said about the land tax is, Why tax land, and not other property? Let me give some reasons. First, I tell you that the tax we put on land, and that is proposed to be put on land, was of the smallest possible amount. What do you think was the total amount estimated to come from the land tax first put on, for the whole Colony of New Zealand? It was only £100,000 for the whole Colony. Was that a large tax to put on the landowners when one considers the millions of money that have been borrowed to make land more valuable. I will tell you