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The Pamphlet Collection of Sir Robert Stout: Volume 76

Failure of the Single Tax Principle

Failure of the Single Tax Principle.

The Single Tax idea of taxing "unimproved land values" came into force in this colony in 1892. For the six years preceding this event the average taxation per head of the colony was £3 7s. 0½d. For the six years while the Single Tax principle has been at work it has averaged £3 10s. 7½d., or an increase of 3s. 7d. per head. During the last two years the taxation has been increased 6s. 10d. per head. It does not look as though the public derived much benefit from the Single Tax principle.

It is quite clear that taxing the land has not reduced either Customs or any other form of taxation. On the contrary, Customs taxation has been largely increased.

Let me invite Single Taxers' particular attention to the following figures, and, perhaps, they will try to tell us how they account for the result. The amount of land tax is the same now as it was in 1894, namely, 1d. in the £ on the "unimproved value," with an increased taxation for all values over £5,000. This tax produced in

1894 285,327
1895 "about" 280,000
1896 271,394
1897 272,309
1898 267,287

So we see that during the last five years—notwithstanding the fact that the population of the colony has increased by no less than 85,500 souls, the land tax produced £18,040 less in 1898 than it did in 1894. In other words, the land value of the colony decreased no less than £4,329,000.

page 90

What a complete reply this is to the oft-repealled statement of the Single Taxers, that the mere presence of population increases land values, for it is abundantly proved that not only has the presence of another 85,000 people added nothing whatever to the land value of the colony, but that in spite of their presence it has very largely decreased, and that in a rapidly increasing ratio.

What about the "unearned increment" here? It is abundantly evident that our land will not stand taxation to the extent of Id. in the £. The sooner it is reduced one ½d. the better.

The fact is, the mere presence of people cannot create "land values" They must have implements to work with, and there must be capital to employ them, otherwise they are more than useless, and this is where the Single Taxers fall into another serious error. They assume that all men contribute equally to the increase in land values, and, therefore, ought to share equally. They do not; indeed, cannot.

The following tables will give additional proof of how utterly Single Tax principles have failed in New Zealand. Taxing "unimproved land values" commenced, as I have already said, in 1892. The effects of this measure would, of course, not be felt for two or three years.

In 1890-91 the number of acres taken up was 512,631. In 1893-94 it was 668,064. Then came the drop when the new system began to be felt, and in 1894-95 it was only 398,197 acres, and last year it was only 384,449 acres.

Number of Holdings taken up during the years specified.
Size of Holding. 1889-90. 1892-3. (Last your of old system.) 1897-8.
Number. Number. Number.
Under 1 acre 144 154 103
1 to 50 acres 701 727 496
51 to 250 acres 757 1,253 616
251 to 500 acres 260 264 197
501 to 1000 acres 110 104 63
1001 acres and upwards 62 76 64
Total holdings taken up 2,034 2,578 1,539

Notwithstanding the fact that in 1898 the population of the colony was 146,000 souls more than it was in 1890, the number of land selectors was 495 less than it was in 1890, and 1,039 less than in the year preceding the introduction of the new system.

page 91

Another very noticeable feature in the table given is the very great decrease in the number of small selectors since the introduction of the Single Tax principle. Those under one acre have decreased one-third, those of one to 50 acres nearly 30 per cent., those of 51 to 250 over 50 per cent., those of 251 to 500 acres over 23 per cent., and from 501 to 1000 acres about 40 per cent., and this notwithstanding the presence of another 116,000 people. This is comparing the reports of the last year of each system.

From the above facts and figures, which are all official, it is absolutely proved that the Single Tax principle does not promote land settlement, nor does, it distribute land nor encourage the small settler, even although they do not pay any land tax.

In passing, I may also point out that these facts also prove the complete failure of the Seddon Government as regards land settlement.

The fact is, the small settler cannot exist without the help of his larger neighbour; he must be able to sell some of his labour, and the more the large holders are taxed the less of the labour of their smaller neighbours will they be able to pay for.

With these facts and figures staring them in the face, the Single Taxers persist in telling us that the only way to promote land settlement is by taxing the value out of land. It is quite clear that the principle has failed here. We ought to be a warning to other countries.

It always appears to me that the Single Tax idea is an absurd attempt to engraft the only good thing in a barbaric state on to the highly civilised institutions of the present day. It cannot be done. Owing to the great changes that have taken place the freehold tenure has become an absolute necessity of modern civilisation.

Equality of reward certainly ought to imply equality of service. In the barbaric state there was a very near approach to equality of service. The wants of the community were few, and limited chiefly to procuring food, such primitive clothing as they used, and the requirements of war. To these wants the whole community could, and did, contribute practically equally, therefore they could hold their land in common, as also they did their food supplies.

In our day this is impossible. Scarcely any two people contribute equally towards building up land values; therefore it would be impossible for the land to be justly held in common.

I denounce the Single Tax as the most fraudulent measure that was ever proposed. It would rob the rich, but would fall with the most unerring severity on the very poor, and by none would it be felt so severely as by the widows and orphans. The more I study it the more I am amazed that any man of respectable ability should advocate it. Thank God none of the master minds of the world have given it any support.

page 92
More than once I have placed the following questions before the Single Tax leaders, but they decline to reply, saying they are mere matters of detail, and that it is necessary to settle principles before entering on details:—
1.How do they propose to secure to the "occupier" the full value of his improvements?
2.Do they propose that the Government is to have the right of re-entry for non-payment of rent?
3.Is it to be a condition that the Government is to reenter, say, if rent remains unpaid for six months,
4.When a property is unoccupied and the improvements cannot be sold, nor the property let, is the owner of the improvements to be charged with the "ground rental value" till another occupier can be found?
5.During this period, at whose expense is the property to be maintained in repair, and fire insurance paid?
6.Seeing that all freehold security would be destroyed, how do they propose that trust funds, life insurance funds, savings bank funds, friendly societies funds, etc., shall be invested?
7.How do they propose that the community generally shall invest accumulated savings?
8.Seeing that they propose to absolutely take without payment the best portion of the securities held by the various life insurance companies, how do they propose to secure to the policy holders that the said policies will be paid as they mature?
9.How do they propose to deal with the liquor traffic?