TAXATION AND RESPONSIBILITY

Press, Volume LXVII, Issue 20181, 9 March 1931, Page 16

TAXATION AND RESPONSIBILITY

TO THE EDITOR Of TEE PBES3. Sir,—Your leading article of Saturday, March 7th, was very instructive. It confirms my conclusion that politicians have-been able to raid the Consolidated Fund for jso-called social services, simply because the average per* son does not know where the Consolidated Fund oomes'from. The meaning of indirect taxation is probably no* understood by many and it apparently does not suit the ideas of , politicians to explain it. Does the average person know that indirect taxation provides the major part of the Consolidated FundP To speak from memory, for the Government financial year ended March 31st, 1930, the Government collected roughly £8,000,000 by direct taxation afld £11,000,000 by indirect taxation. On a population of 14 millions this means that about £7 10s per head is collected by indirect means. Thus a family of four would pay about £3O per year; but I am certain that very few of the rank and file of the population realise that this amount is extracted from their earnings every year and that the amount has Been, and is always being, increased by the constant depletion of the Consolidated Fund for old and new social services. The beneficiaries of these social services think they are getting something for nothing—"free" education, dental services, music, and dozens of other services—while, as a matter of hard fact, they are largely paying for such services themselves. Not only this, but a substantial proportion of the money so paid goes in administrative and other charges and the full amount collected does not come back to the people. I think it would be worth while trying to devise some way of abolishing indirect taxation altogether and substituting direct taxation. Why not a universal income tax P Every person in receipt of income, however small, to be taxed on that income, and the collection of it to. be imposed as an obligation' on the employer or other payer of the income. Customs duties to be protective only, if necessary at all, and not primarily imposed for revenue producing. If the mass of the people know they are finding the money themselves, they will take a keener interest in its expenditure and will scrutinise, demands for "free" services more closely. The cry about difficulties and expense of collecting such direct taxes is, to my mind, not to be taken too seriously. It probably originates from a Department which is comfortably , following old routine methods and does not want to go to the trouble of changing them. — Yours, etc., •' - GENERAL MANAGER, March 7th, 1931.