The morning call., 1894-05-07
REFORM IN TAXES.
A Consul on New Zealand
Land Taxation.
Large Estate Owners and AbSenteeS
Compelled to Sell and Poor Men
Receive the Benefit.

The April volume of consular reports on
commerce, manufactures, etc., published by the
Government in Washington, contains highly
interesting article on Land Taxation in New
Zealand" This essay is written by John ID.
Connolly, American Consul at Auckland, who
has succeeded in presenting his subject in an
attractive and effective manner
''In the matter OF taxation laws" he writes,
New Zealand excels as compared with the
other Australian colonies, and perhaps with
many older countries. Here, at least, legisla'
ton has been introduced that has been most
socialistic, confscatory and impracticable. But
regardless OF this terrible arraignment the tax
alton laws have been fully and successfully
established and given practical effect even
while other countries were theOriZlng on the
same principles. Here reforms have
been introduced which revoIutionzed the old
system without affecting. at least TO any ap-
preciable extent, existing interests.
The most determined opposition 10 the new
taxation came from The m0neyed institutions.
loan cOmpanes and the owners OF vast landed
estates. 1t was found as soon as the new sys-
TEN became law and was thoroughly estaD-
lished that instead OF involving the colony IN
ruin, it had exactly the contrary effect. The
credit of the colony In London increased TO an
unprecedented degree. New Zealand'S credit
is better to-day on the London money market
than is that of any other colony OF Australia.
This Ileasant position is not attributable to
the new system OF taxation alone, although it
may De fairly said TO have materially assisted
i'll establishing confidence in the country.
'The aim of the new Government has been
TO relieve The sweaklings' as much as possible
from the burden of taxation and TO place It
upon the shoulders OF those who were better
able TO bear 1t"
A personal property and land tax was i'm
posed up 10 1891. The property tax has been
substituted by an Improvement tax, under
which improvements OH Land up to 81 100000
valuation are exempt but above that amount
are taxed. Deduction OF mortgages and OF I'M
provements TO a value of $4,000 renders
many owners exempt from land tax. There IS
an exemption of $500, SO that no man pays
lakes for State purposes until his property Is
worth over that amount.
A graduated tax is levied also for which all
Improvements are deducted. but an owner Is
not allowed to make any deductions for mort
cages owning by HIM and he has not 10 include
in his return any mortgage owing by him: The
tax is not imposed on any owner the value OF
whose land. less improvements, does not eX-
ceed 1000, and the lowest rate imposed is
ne-eighth OF penny 10 the pound. The rate
generally rises till it reaches pence In the
pound on the improved value of lands up TO
81 .050, 900 or more.
In the case OF owners who have been absent
from the colony for three years or over. prior
To the passing Of the yearly lax act tax OF 20
per cent additional over and above the ordinary
and graduated tax. This is intended as
measure against absenteelsm aud It's train of
evils, and to compensate In some degree Inc
country for the losses sustained thereby.
Value Of land and improvements is ascer-
talned by an assessment made by assessors
who value the whole of the lands In the colony
whether occupied or uDoccupied, whether be-
longing TO the companies, or persons. or local
bodies, to natives or TO the crown. Ihe tri-
enna valuation will be abolished at the next
session OF Parliament and system provided
for readjustment OF values when deemed neces.
sary. Only experts familiar with land values
will be engaged as assessors. 1t Is proposed to
place the cost OF valuation on county councils
and road boards to relieve the Government
After assessments are made owners are al
lowed 10 make returns to the tax department,
hoard e.
sDective districts give final decision on tile as
seSSment. Still the owner has one more pTlyl-
lege of calling upon the Commissioner of Taxes
TO reduce the assessed value OF his land, or de-
mand that the government take the land at the
value placed upon II. The government must
accept either alternative. Against this ihe
commissioner may with official approval buy
the property at the value entered in the
owners return, with 10 per cent added isvareio.
All incomes from mortgages and rents and
from the use or produce OF land derived by the
owner or occupier are exempt from Income tax.
In addition to the ordinary there Is gradu-
ated tax on land values over 10000. Ihe 0D-
ject of this Is TO compel those possessed or
large estates ana who are holding them for
speculative purposes TO either subdivlde or
offer such lands for settlement. The graduated
tax is having the desired effect as many Of the
immense estates are being freely offered at
their taxable value, while some are being cut
up into small farms and sold at auction.
The rates of sales for 1S92-93 were ordinary
Id per pound. and the graduated tax going as
hight as I'd in the pound; income cd per pound
on first taxable e1000-l. e., after deducting
the $500 exemplion-and Is per pound on tax
able incomes over $1,000. BY the abolition of
rax on Improvements a loss 10 the country OF
a37. 900 was sustained but this will be COM
pensated for BY the graduated tax.
BY the $500 exemption and the
$500 income exemption small farmers and
laborers are immensely benefited. and they are
very grateful for the paterDal solicitude of the
Government. The tendency is toward increas-
ing the taxable property without making IL op-
preSslve Oil those upon whom the Increased
weight of taxation has falen The number OF
taxpayers has decreased under the present land
and income tax by 902S, while the revenue has
Increased 919,92l The increase is mainly al
tributed 10 the absentee and graduated taxes.
That there is very little difference between
the present land tax and the single tax as pro-
posed by "snglr-taxers," as they are called in
New Zealand Is easily shown. The single lax
would be levied at uniform rate ana without
exemption upon all properties, irrespective Of
siz The mortgages would be treated In pre-
ciselY the same manner as the owner-i e., 1t
would consider him as being part owner OF the
improvements as well as or the land. There
would be no absentee taX-all landowners
would be treated alike. Single tax is in favor
among some local boards. and Consul Connolly
says OF IT: The present mode of taxation-land
aud income-is only one degree removed from
the single tax"