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The Property Tax.

The people of New Zealand find a rather considerable deficit in their public revenue. There has, it is true, been depression in trade, but rightly enough the railways receive the major part of the blame of the deficit. The so-called New Zealand Railways are only London railways in New Zealand, or railways rented by the people from some capitalists page 68 in London. That rent is about £5, 10s. on every £100 of their cost, while the work that can be done by them for the people, and which the people can as a body directly pay for, brings only a direct recompense of £2 in the £100, and perhaps scarcely that. Until the people grow far more numerous or richer, there is no hope of improvement. This rent is payable every six months, and when the time is up and no money to pay it with, men look now and then at one another before they put their hands in their pockets. The people of New Zealand may be classed as miners, merchants, and farmers or settlers, and each of these thinks his neighbour should pay at least his share of the balance due, if not more. In the struggle the farmer has come the worst off; a land tax has been imposed and paid for a year. The deficit being still in the ascendant, the settler, it is thought by some, should have a still higher land tax imposed on him, and that the property tax now law-should be foregone.

My object in writing this letter is to bring to the memory of some who clamour against the land owners, a few facts which they seem to forget.

They might remember (1) that when this scheme of borrowing was begun, it was distinctly laid down that the Colonial creditor was to look to the customs page 69 revenue for his rent or interest. The work to be done was Colonial work, and no special employment or class was to be specially called upon or taxed. Each province at first was to bear its own railway burden. This was changed, and the Colony took it upon itself. Vogel was jubilant, or pretended to be, at the seeming success of the scheme; many in New Zealand were with him in this. They forget, however, like Benhadad, that the proper time to boast is not when one puts 011 his harness, but when he takes it off. For at that time New Zealand railway harness was not half put on. (2.) That the majority of land owners opposed the borrowing from the first. (3.) That railways, when they do not bear their own burden, neither raise the value of life or property of any kind. The value of land in New Zealand has risen truly enough, and the land owner has been enriched, but not by railways. If large sums of money are borrowed, and scattered or squandered broadcast over the land, of course land and other commodities will not exchange for so little gold as they did before; and of course when this scattering and squandering not only ceases, but begins to scatter the wrong way in the shape of interest paid, then land and other commodities will exchange for just as little gold as they did before, and perhaps for a good deal less. If, therefore, land rose, it shows page 70 that somebody must have got the money to raise it with, and the money-holders should be taxed, and not so certainly the landholders, for the money so obtained was borrowed. It is ten years or so since the borrowing scheme commenced, and if we compare the rise in land of these three years with the rise of the former ten years, we may find that the railways have not been so advantageous. (4.) And that the public in all its classes benefit just as much by the borrowed money and public works as the land owner. Neither his property nor his person is carried at any other than the common rate. (5.) That railways lower the value of land in a country where more of them are made than the people require. This is the case now here. By opening up the country too fast farmer competes with farmer, and the public benefit at his expense. I can name farmers who are now driving oats to a railway station ten or twelve miles distant, and receive 8d. a bushel for them there. (6.) That land is taxed enormously already. The farmer, in addition to customs duties, pays road rates, rabbit rates, county rates, sheep rates and land tax. Common sense, not to mention common morality, might indicate that further special impositions should not be attempted, and that those who do seek to attempt them do so from low and vicious motives. (7.) That since the golden shower page 71 has fallen on all indiscriminately, all should indiscriminately assist in making up the balance wanting. (8.) That a land tax reaches in every five cases in ten the very land owner whom it ought not to reach. As everyone knows, during the late inflation all the country from Dan to Beersheba was for sale, and perhaps the half of it was sold at enormously high prices. A land tax makes this price still more enormous, and the receiver of the high price stands by with the money invested or in his pocket, untouched and untaxed, looking on.

For these and other reasons it seems to me that the present property tax is by far the fairest that can be imposed. We cannot eat our cake and in honesty spare it too. If we rent railways which are too heavy for the numbers and wealth of the people, and are consequently unproductive, we must expect to be molested. We must expect, when we incur such a load of debt, to see what for the sake of courtesy we call our government degenerate into a mere machine for gathering money for the home loan-monger. We need not wonder if with debt and taxation present, demoralisation and disaster follow.

I have, however, two faults to find with the present property tax. All are exempt who have property under £500. Where the moral right can page 72 have come from to charge one's second £500 with a tax and let the first go free, and along with it five-sixths of the population, I am at a loss to conceive. On these five-sixths the golden shower fell as plainly as on the rest. Another most pernicious breach of common sense is the exemption of the property of public companies whose partners reside abroad. Private property owners may also, it is said, evade the tax by residing say in Tasmania or elsewhere. This is expediency with a vengeance. Capital, it is said, would not enter the Colony if it had to pay taxes like the common colonist, &c. The legislature seems to have thought that the moral law, which says "Thou shalt not steal," was a piece of fanaticism, which they and the Colony would annihilate. But the subject is beneath criticism.

I would urge, in conclusion, upon the land owners, be they large or small, the necessity of union in their own defence. The object of Grey and others is to divide the camp of the agriculturist by the cry about land aristocrats, land sharks, and such like, in order that the other classes of the community may escape the payment of their just debts. A moment's reflection will show that the large land owner is not the cause of the present dangerous state of things, and neither would his ruin raise the country to prosperity. Those who want large estates divided should state page 73 where the small farmers are to come from to occupy them. If we did not want large farms we should not have sold large farms, and the not doing that means the keeping out of debt; and that we are utterly incapable of doing this is as melancholy a fact as the future historian will have to narrate. The seller was therefore as much to blame as the buyer. To tax a man because his farm is large, is to punish him because the population of the globe is, in the opinion of the taxer, insufficient, or because the globe was made too big.

Land monopoly, so much talked about, is mainly a dream. A glance at the map of the two hemispheres shows this. What with land where the civilized foot has never been, and land inhabited by effete nations over whom the doom bell is ringing, there seems more land than ever will be held till perhaps the end of the world. The effort of the ruler, should be directed to keep farms from getting too small. Our race seems to err as much on this side as on the other. It seems prone to degenerate to small farming and a weak vegetarian economy, which a hot wind or a few bad seasons upset. Famine and the death of the population by the million then follow. In Ireland about a million of people died of starvation once on and surrounded by small farms. In India, lately, two and a-half millions died of page 74 starvation on small farms; and in China, still later, the frightful fact seems to be established that five or six millions of industrious men died in a land of unequalled fertility, but of small farms, of starvation. The enlightened cosmopolitan should try rather to give each a large farm, and that, if need be, by the encouragement of only a light population.

Let me then advise the settlers to resist by every means in their power the imposition of burdens on them in which the public as a whole do not or refuse to share.

I have not alluded to the sale of land as a means of meeting our difficulties. The Grey Government give the falling off in the land revenue as the reason of these, and why their excessive deficit is existent. But say they, "We have still the land." This is, however, untrue. If New Zealand, being a young country, would grow longer and broader daily (and it would need to grow very-fast to meet the increasing public expenses), it might be then said that we have still the land. The land revenue has fallen decidedly, and just as decidedly it will never rise again, for reasons very manifest. Against our huge debt all the land we have is but a very little dust in the balance as a saleable article.