The Pamphlet Collection of Sir Robert Stout: Volume 29
Replies to Objections
Replies to Objections.
1. The Taxes on Necessaries really only amount to 15s. or 16s. a head.—(Mr. Harper).
The detailed calculations given in the former portion of this essay lead me to the opinion that the taxes on food alone, including very little except necessaries in that list, reach an amount which causes a burden to the consumers of at least £1 0s. 9d. a head. The bare duty collected on the one article of sugar alone amounts to £128,431, or 5s. 8£d-Per head of the 450,000 people. My calculations shew a total of duty collected on almost entirely necessaries, amounting to £531,254, or more than £1 3s. 7d. per head, really inflicting a burden of £1 17s. 6d. per head. Mr. Harper is not reported as having adduced any calculations in support of his estimate, which is far less than one half of mine.page 23
2. A property tax would prevent the introduction of capital and reduce the demand for labour, so that the labouring class would feel it most severely.—(Mr. Harper).
If a property tax were imposed, it would be fair for those who would have to pay it to say—"we must either employ less labour or you must submit to a reduotion in wages."—(Mr. Hunter).
My own belief is that a property tax, by causing a greater sub-division of properties, especially landed ones, would lead to the introduction of more capital and largely increase the demand for labour. I believe that if all owners and occupiers of land above a certain amount were taxed as such, a great deal more land would be made as productive as possible by the use of labour upon it, instead of being left in an almost unimproved state as wild pasture land. The present holders would either make that improved use of the land which would enable them to pay the tax cheerfully, or they would part with a portion of their vast estates at a reasonable rate to many smaller proprietors, who would employ more labour and derive a larger aggregate income from the land. Unless land monopolists are protected, by absolute exemption from taxes, in the "dog-in-the-manger" practice of keeping the land in a state of pasturage, calling for little employment of labour, plenty of people will be found ready to make the land as productive as possible if by doing so they can, after paying labour, interest of capital, and a fair tax, realize a competence or a handsome income, according to the degree in which their sagacity and practical ability shall have enabled them to choose, and buy at a reasonable price, land of good quality, well situated for easy and cheap communication with markets for their produce. I think the tendency of a tax on property, especially en landed property, will be to increase the production from land and thus create a greater demand for labour. I only hope that that demand may bo sufficiently met to prevent such a rise in wages as would prevent production. But if the taxes on necessaries be abolished, and the cost of them yet further lowered by a wise use of cheap native fuel, and the reduction by that and other means of the cost of railway carriage, the labourer will be able to buy his necessaries so much cheaper than at present, that even a lower rate of wages, as expressed in money, will enable him to keep himself and his family comfortably, and put by savings more easily than he can under present circumstances. The grower of grain, or of meat and wool on cultivated pastures, would pay less lor all necessaries consumed in his pursuit, and could therefore afford to pay a reasonable tax, sell food at a cheaper rate, and yet be quite as sure to realize a good income as at present. I have no hesitation in declaring my belief that the warning of suffering to the working classes as a consequence of a tax on land and other property, is a mere false alarm; a scarecrow stuck up by a few selfish owners of property, to frighten the mass of electors from choosing advocates of a fair tax upon it; a most contemptible scarecrow, or man of straw, not worth the wretched rags and tatters in which a near examination of it shews the old stick to bo dressed up! There is and has been for many years, a tax on property and income in the United States of America. It has not prevented the introduction of capital, reduced the demand for labour, or lowered the rate of wages, in that country.
3. A land tax would be most oppressive and unfair.—(Mr. Hunter).
This is another bare assertion, by the typical representative of a body of large landowners—a great portion of whom have realized large incomes from the monopoly of land which they have secured by paying heavy interest to such people as Mr. Tollemache and Mr. Hunter, and going scot free of any contribution to the cost of Government in virtue of their landed tenure. Mr. Hunter adduced no calculations in support of this bare assertion; and until he does so, as I have done to prove that the existing taxes on necessaries are "most oppressive and unfair," I can only give his argument a most emphatic denial. In the United States of America there is a land-tax: it is not considered oppressive or unfair. It prevents an undue monopoly of land, and is cheerfully paid by those who so use their landed property as to employ the most labour, and produce the largest income, in proportion to the intrinsic value of the land in its wild slate.
Mr. Stevens objects to,—(1) "Inquisitorial investigations of professional earnings, trade profits, and industrial returns." I have already submitted a full reply to that page 24 objection. (2) He "objects to an acreage tax, and does not believe it will burst up large estates." I do not advocate an acreage tax on private land. A tax on the assessed income is much preferable, with pre-emptive right to the Government at the proprietor's own assessment. There is no desire to "burst up large estates," if the owner makes them as productive as possible and pays taxes in proportion to his income from them. (3) "To reduce the Customs Revenue would injure the credit of the Colony and its borrowing powers, and so injuriously affect the labouring classes by interfering with public works." I entirely disagree with this prediction, which is the scarecrow of Messrs Harper and Hunter, dressed in another suit of tatters. Mr. Stevens ought to know well that a money lender to private persons prefers security on landed property, and on the income from it, to security on the reputation which the borrower has for a large expenditure, whether on food and necessaries, or luxuries and stimulants. This merely personal security may disappear from the scene, along with the spender; the land, and property on it, will always be there to afford income to somebody, and a solid taxable resource as the best of all securities to the public creditor, for the solvency of the Colony. As soon as ever the monied people shall hear that the public revenue of New Zealand is secured on the income of its land, they will be readier than ever to lend money for promoting "the means of communication," and thus benefiting farmers and other producers, large and small, while at the same time rendering the lender's security more valuable. (4) "He was opposed to a tax on mortgages, as it would fall not on the lenders but on the borrowers." The rate of interest and costs charged to mortgagors will depend on the proportion between the demand for, and the supply of money, for investment in loans on landed security. I propose a tax on the "income," which lenders of money on the security of landed property derive from that lucrative pursuit: the amount of which income only the dishonest or the exorbitant money-lender can have any reason for withholding from the knowledge of the Government.