INCOME-TAX FROM CAPITAL.
[To THE EDITOR 01I mite "sesararon.-]
Sin,—I joined eleven men, chiefly workmen, in buying nine acres, which we sold in building lots, reserving minerals. Thirty-three years ago the sales closed with the sale of the minerals to me for £250; and during thirty-one years I bad. only the expense of guarding from encroachment. Then I leased the best seam for ten years at £70 an acre, minimum rent £60. Meanwhile my price, £250, is raised to £1,200 by compound interest at a less rate than money was worth to me. • I shall get back one-half of my capital, and on every pound of capital I must pay Income-tax at 12d., 14d., or more. I can never let another seam ; but the Budget scheme is that three, four, or five lower supposed seams shall be valued by the guesses of prejudiced valuers for a tax of id. in the pound on capital value of seams that may be unworkable or non-existent, or that may not be worked for a century. When worked they may yield less than the tax with its compound interest. Mr. Lloyd George has forgotten that id. invested at 5 per cent. compound interest since the birth of Christ would now be a ball of gold as big as the sun. For me and my successors the tax may be serfdom. Twenty-seven years ago I bought • a hundred and twenty-nine acres of coal land. Two seams will be exhausted in three years, and on all coal-rents, repre- senting capital, Income-tax is levied without deduction for • measurements and other expenses. The best seam was let to
three successive lessees, who failed after involving me in loans and other loss of £800 (raised by compound interest' to more than £3,000), and none of this loss is deducted from coal- rents paid by the fourth and successful lessee, but the whole • pays Income-tax. Another seam, Deepsoft, is very valuable if as good as it is a mile off, but a trial boring shows mine only eighteen inches thick and unworkable. It may be worked a century hence, and meanwhile I and my successors may pay annuities to Government on it and three, four, or five other seams according to the fancies of Government valuers. Having lost 2800 by the old colliery in my best seam, Topbard, my management arranged for a better colliery which employs four hundred men, who add to my farms some value which will be called unearned increment, and Government will claim a fifth of my prices for building lots. During twenty years I have offered a hundred and eighty lots at ls. a yard, and have sold thirteen, of which the colliers earning 83., 10s., or lie. a day, and wanting cottages, have not bought one. Saving to build their own homes would deprive them of old-age pensions.
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