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THE TAXATION QUESTION.
In Tasmania taxation Is heavy, unscientific, ana unfair. That It Is heavy
has been made inevitable by tbe mismanagement of many Governments
nd reckless spending ol loan moneys on unreproductlve works. The
enalty o£ that Is being paid now, nor can It foe avoided. Thus it Is that
n Tasmania taxation is at the rate of £1/8/10 per head, the highest in the
Commonwealth, South Australia (£1/4/4) being next, and the average for
all the States 17/2. And this burden (has ibeen a steadily increasing one.
Referring to the subject in the last edition of the "Commonwealth Year
Book," Kntbbs says: "Taking the States as a whole, the State taxation
Increased by 3/1 .per Jiead during the six years irom 1901-2 to 1907-S, the
most marked increase being that of 15/10 per liead in the case of Tasmania."
That increase was inevitable. The point to "be emphasised,
however, Is the unfairness with which the methods ol taxation operate,
both the Land and tbe Ability taxes being most unjust in their incidence.
Taking these as the chief sources of direct taxation revenue, the incomes
of tlin various Stales for 1907-S were-: —
Victoria
Queensland
New South Wales ..
South Australia .. .
West Australia ....
Tasmania
Income and Ability.
£337,354
271,299
215,283
212,G43
113,967
101,433
land,
£ S9.49C
93,702
11,140
67,742
These figures show how heavily, in proportion to population as well as
per -head, taxation falls in Tasmania. Under the Taxation Acts of 1902
and 1904 provision is made for collecting Income and Ability taxes, the
receipts from those sources ror 1907-S being £67*916 and £33,517 respec-"
lively. The principle of the Ability tax is to levy upon persons according
to their means or ability, and the assessment is determined by the-annual
value of property occupied by them or the amount -paid for board and
lodging. The theoretical principle is sound but its application is utterly
'had. It by no means iollows that a man pays according to his ability when
that is determined by the size and locality of -the house be lives in and the
amount lie pays in rent. In practice It is frequently the case that two
men, each in receipt of, say, an Income of £210 per annum, do not pay the
same amount oi tax, one being assessed on a rental value of £30 And the
other on one of £15. Such anomalies as this are common, and are inseparable
from a system that simply regards the payment of rent a.s an
indication of ability. As a matter of fact, the man who pays the Siigher
rent does so because his family requirements necessitate his living in a
large house, and his ability to bear taxation is much less than that of the
•man who, with a small family or none at all, but in receipt of the same
amount of salary, finds a house of halt the size sufficient.
The present system of land taxation is now generally admitted to be
had In principle. It Is taxation of industry and enterprise In the shape of
Improvements a man makes to the land, which alone ought to bear the
burden Land taxation at present has greater evils and imposes
more injustice than does the Ability tax. Under both the man who'
is less able often pays not only proportionately more but actually mpre than
he who is in a murt better position. Facts and figures have demonstrated
this over and over again, hut never so decisively as to regard to small
holdings on well improved third-class land as compared with good agricultural
land which is used only for grazing purposes. The latter is assessed
at £1 or £2 per acre. The forai'.-.-, because well cultivated and highly
improved, at £20 and £30 and often 'more per acre. Thus the small
producer pays out of all proportion to the much wealthier owner who makes
but little use of his land or holds it in idleness. Taxation of laud oa its
Improved value has seriously handicapped the development ot Tasmania,
and to it is directly traceable a sustained Sxodus of population which began
many years.ago and is still going ou.
A revision of the whole system of taxation will have to be undertaken
by Parliament as the chief business of the first session. That was the
mandate of the country at the general elections the other day, and the
direction cannot he avoided. The Ability tax can be no longer defended,
and it must give place to one on incomes. An Income tax with reasonable
exemptions is one of the fairest methods of direct taxation, especially if an
abatement is made, as is the case in Great Britain, for each child under
sixteen. The Premier of Victoria, where an Income tax has ruled for many
years, has expressed his approval of this abatement oil the ground that the
father should be relieved to some extent from direct taxation In recogni.
tlon of the fact that he was necessarily paying. Indirect taxation by the
money be expended on the rearing of his children. Provision for this is
made in the Ability tax where the taxable amount is under £100, the age
limit being seventeen. This would probably 3M continued In any Income
tax scheme that was substituted for the existing Income and AWllty taxes.
Sut whether continued or not, the just principle of progressive taxation of
incomes would not thereby b-j affected.
Taxation can be most fairly applied by placing it on incomes and the
unimproved value of land, and along those lines Parliament must proceed
In tbe work ot re-adjustment. The three taxes, I*ujd, Income, and Ability,
returned for 1907-S, iu round figures, tbe sum of £160,000, and what is now
required is to raise that amount, or as much more or less as may be needed
for the exigencies of the State, in a more equitable way than at present.
There are no difficulties ot moment to prevent that being done, except the
opposition of those people who now escape paying taxation according to
their means or ability. The greatest resistance will be to the taxation of
land on its unimproved value, but so clear was the verdict of the country
last Friday week, when of the members returned to tbe Assembly twothirds
were pledged to this form of taxation, that the Legislative Council
has no constitutional reason for rejecting legislation providing for it.
Whatever Ministry may be in office must go on with taxation reform.
!s part and parcel of land reform, which, without it, cannot be made
thoroughly effective. Apart from that, there is tbe common element of
justice In placing taxation where it can ibest be borne, and where it J> a
Ulx far MtYlstt cwi4ar«4 by tin KUM.
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