Taxation in New Zealand 9 



are far too high, and that relatively more revenue should be 

 raised by the land and income tax, death duties, and other direct 

 taxes. The followers of Henry George, who are quite numerous, 

 Jiold the usual single-tax doctrine, that the whole revenue should 

 be raised by a single tax on the unimproved value of land. The 

 government pretends that it has made substantial "concessions" 

 from time to time since the year 1900, but these have been more 

 than counterbalanced by increased duties in other directions. In 

 the year 1900 the revenue from customs was 17.85 per cent of 

 the value of the imports; in the year 1908 it was 17.99 per cent 

 of that value. As in the United States, so in New Zealand, prom- 

 ises and pretenses of tariff reduction are largely illusory. 



THE LAND AND INCOME TAX 



As far back as the year 1844, Lord John Russell sent a circular 

 letter to the colonial governors of Australia and New Zealand 

 recommending a tax on land as the form of taxation most suit- 

 able to the conditions prevailing in a new and growing commu- 

 nity, but thirty-five years elapsed before such a tax was imposed. 

 In 1844 Governor Fitzroy, who was an ardent advocate of free 

 trade, passed an ordinance abolishing customs duties and substi- 

 tuting a graduated property and income tax of 1 per cent on prop- 

 erty and income combined up to £1,000, but no taxpayer was 

 liable for more than £12. The change was welcomed by the 

 traders and whalers, but the settlers ignored and evaded the law, 

 which soon failed as a means of raising revenue, and was replaced 

 by a new customs tariff. No further attempt was made to impose 

 direct taxation until 1878. 



At that time the colony was prosperous, though on the eve of 

 a crisis, and Ballance considered that the burden of taxation 

 should be readjusted, in order to make the landowners pay a 

 larger share of the interest on the public debt, which had been 

 incurred chiefly for the building of roads and railways, which 

 had greatly increased the value of land. Ballance's Land-tax 

 Bill was carried, but stirred up much opposition, and, after the 

 fall of the Grey government in 1879, tne Act was repealed. 1 



1 Land-tax Act, 1878. Reeves, State Experiments, vol. 1, p. 258. 



257 



