The representative. [volume] (St. Paul, Minn.) 1893-1901, 1894-10-10
A VERY IMPORTANT QUESTION
The New Zealand Tax SysteM--Tt Re.
neveS thc Poor OF All TNxes-Lei

The New Zealand Tax Systen-It Re
lieves the Poor OF All Tnxes-Le
These Facts Be Carefully Studied
The antipodes are leading the globe II
progressive thought; and New Zealand
with $50, 1873 inha bitants, has invented not 9
single-tax system, but a system that IN
many respects can be profitably initiated by
the people Of the United States. 1t shifts
the burden of taxation from the poor onto
the Weather classes; and it makes a mar
pay in proportion to what he has 1t grad
yates the land tax as to force the break
ing up and sale of great estates. 1t re-
Quires the nonresident to pay 20 per cent
moro taxes than the resident. 1t encour-
ages improvements by relieving them from
taxation and 1t supplements the land tax
with an income tax, so graduated as to ask
nothing from the humble and struggling
and 1t utterly abolshes the personal prop
erty tax! Read the following from the re-
port of the American consul at Auckland,
John d. Connolly, dated January rs, 1894:
I'm very short time the incidence OF
taxation has been almost entirely changed
always a most hazardous undertaking, be-
cause Of Its tendency to disturb existing
values and disarrange business enterprise.
Here reforms have been introduced which
revolutioniZed the old system without af-
fecting, at least to any appreciate extent,
existing interests. The most de-
termned opposition to the new taxation
came from the moneyed institutions, loan
companies, and the owners of vast landed
estates. 1t was found, however, as soon
as the new system became law and was
thoroughly established and fully under
stood, that, instead of involving the colony
in ruin it had exactly the contrary effect
The credit of the colony in London (Which
Is, Of course, the center of financial opera
lions so far as the colonies concerned)
increased to an unprecedented degree. New
Zealand's credit is better today on the Lon
don money market than is that Of any
other colony Of Australia. This pleasant
position is not attributable to the new sys-
tenn OF taxation alone, although 1t may he
fairly said to have materially assisted in
establishing confidence in the country. The
non-borrowing policy of the government and
the general recuperatve powers Of the colo
ny assisted in restoring faith in the coun-
try.
THE aim of the new government has been
to relieve the "weaklngs much as pos
sible from the burden Of taxation and to
place it upon the shoulders of those who
We're better able to bear it.
THE PERSONAL PROPERTY TAX
up to 1891 land and personal property
tax was imposed; but during the years of
depression the colonsts generally COM
planned of the personal-property tax as be-
ing a grievous burden. One of the first
acts of the new government was to abolish
the property taxi and substitute an i'm
up to $4,000 was exempt but all improve
ments above that amount were taxed.
The deduction of mortgages and improve
ments up to value of $4,000 renders very
many owners exempt from land tax, the
total number of land-taX payers in 1891
being 1851 out of a total of 81 sol owners Of
land in the colony. 1t will be borne in mind
that there is an exemption of $500, that
no man pays any taxes for state purposes
until his property is worth over the above
amount The special exemption Just re-
ferred to reduces the number of taxpayers
An owner whose land and mortgages, after
the deduction of mortgages owing by him
and of improvements up to the value Of
$4,000, do not exceed $500 is allowed de-
duction by way Of exemption of $500 (al-
ready mentioned), and this amount gradual
ly d'minishes until it disappears altogether
when an owners assessed value, less reduce
items. reaches s12.500.
EXEMPTION OF IMPROVEMENTS.
I'm 1892 the tax act was SO amended as
to exempt all improvements under 5000 in
value, and in 1898 improvements of every
kind were exempted and income tax
introduced instead. By the abolition Of the
tax on improvements a loss to the revenue
Of the country sustained equal to
$4,000. but this loss will be compensated
for in some degree by the scale Of gradu-
ated tax having been increased.
Thus, in three years the entire system
Of taxation has been almost completely
changed, and, it is gratifying to say, with
the most beneficial effect Each change
made in the direction of relieving those
who were least able to pay and making
those to whom the additional burden of
taxation would make no material differ
ence contribute (what they had not hith-
erto done) fair share Of the revenue re-
quired in proportion to their means.
GRADUATED LAND TAX
graduated tax is levied, and for this all
improvements are deducted; but an owner
Is not allowed to make any deductions for
mortgages owing by him, and he has not
to include in his return any mortgages
owing to him. This tax is not imposed on
any owner the value Of whose land, less the
improvements thereon, does not exceed
$4,000, and the lowest rate imposed is
one-eighth of a penny in the pound. The
rate gradually rises until it reaches I'd.
in the pound on the improved value of
land up to $1050,000 more
ABSENTEE TAX.
There is a provision for levying 20 per
cent additional over and above the ordn-
airy and graduated tax in the case of own
ers who have been absent from or resident
out Of the colony for a period of three
years or over prior to the passing Of the
yearly tax act. This absentee tax is con-
sidered just one, for the reason that
there are many large landowners living in
England or elsewhere, drawing large in
comes from their possessions in the colony.
These men contribute nothing toward pro-
noting the welfare of the country; In fact
they are, in many instances a serious
drawback, in consequence Of their holding
large areas of land for speculative purposes
while those owning land adjoining theirs
have been improving their property and
paying taxes on their improvements. The
absentees are taxed only on the unim-
proved value of their lands, but when it
is offered for sale the price is materially
enhanced owing to the improvements made
on neighboring lands 1t is therefore in
some degree to compensate the country for
the loss thus sustained that 20 per cent adj
d1tlonal has been imposed upon those own
ing estates in the colony, but who reside
out side of it. This special tax only applies
when the owner is a nonresident but if a.
partner of the absentee is resident this
additional tax is not imposed
A very complete system of assessment ia
provided for by the employment of skilled
land valuers. AS improvements are ex-
empted there need not be land valuation
more than once in five years. The law pro-
vides that If the government assesses a
mans property for more than it is worth
the owner has a right to offer it for sale to
the government at the assessed price, and
the government is obliged to purchase If
INCOME TAX
There are a number of incomes EXEMPT
from the operation of this tax. Land and
mortgages are reached by the land tax. All
incomes from mortgages and rents and
from the use or produce of land derived bv
the owner or occupier are exempt from this
income tax. This, of course, materially re-
ouces the number of income-taX PAYERS
and, as all companies pay on their incomes
shareholders do not include, in their returns