How to Achieve Economic Justice
The Tax Muddle
Below is the text of a radio broadcast.
Fellow taxpayers, I would like to consider with you the cost and burden of taxation. Have you ever considered the huge cost of collection of revenue under the present system? Income Tax and Customs Departments alone maintain large numbers of assessing clerks, checkers, inspectors and highly paid supernumeraries whose salaries eat deeply into the total tax collected. Add to this cost the Court proceedings and investigations and you have another heavy loss.
But this is only part of the total. Throughout our nation there are thousands of employees in private industries, whose whole time is occupied in the preparation of sales, income, payroll and numerous other tax returns. The loss in man hours thus occasioned must be considerable; add to this the millions of hours spent by small business people, individuals preparing tax returns, etc., and one must realise that a costlier system could hardly be devised.
Too much time has to be spent in the compilation and assessing of taxation, many hours which could be gainfully employed, used up in wasted effort. Further to this, the punitive income tax as applied today, destroys the incentive to produce and certainly does not attract capital to those industries, the productive capacity of which is great, but where there is a considerable element of risk. In the case of primary production the effect is worst of all because when a farmer or grazier decides that he will curtail production because of heavy income tax, he not only withdraws his personal effort from the community but withholds the source of wealth, that is the land, from production, and so the evil result of this tax is duplicated.
The Sales Tax adds greatly to the cost of all consumer goods and falls most heavily on the lower income members of the community. To sum up, the result of our present method of tax collection is to destroy incentive and thrift, speed inflation and thwart national production.
The Justice Party suggests as an alternative to the foregoing evils, that the rental value of land be taken for government revenue. Through having a single source of revenue, the cost of collection would be reduced to a minimum, in fact it would simply be an extension of the system employed by many progressive government bodies whose revenue is obtained by a property tax on the site value of land apart from all improvements put there by the individual in possession.
The Site Value of land could be established by a Valuer-General, such valuation to be acceptable both for revenue collection and where necessary for resumptive purposes, thus ensuring a just basis. Objection to this system of raising revenue may be voiced by some, but as land values are the result of the presence of the people, the people as a whole are surely entitled to this revenue for their common needs, coupled of course with the abolition of all tax burdens on labour and labour products.
The site value of the land of the City of Melbourne amounts to many millions of pounds. However, if the population of Melbourne was removed to another district, Melbourne land would shrink to almost nothing and the value of the land in the new locality would greatly increase. This shows that it is the presence of people which gives to land its value. In fact, by taking the annual rental value of land for revenue, we would, in the words of Henry George, "Take for the community what belongs to the community, and leave sacred to the individual, that which belongs to the individual."
Our organisation contends that unless the heavy load of taxation is lifted and the method of obtaining government finance drastically reviewed, we face a heavy fall in production with an inevitable depression worse than any we have yet experienced.
We therefore appeal to all to rise out of the apathy into which party politics have submerged us and to give earnest consideration to this urgent problem of destructive taxation, replacing same by the collection of land rent for revenue.
--- L.F. Bawden
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