Taxes, Not Profits, Raises Cost Of Living

Chronicle (Levin), 26 August 1949, Page 7

Taxes, Not Profits, Raises Cost Of Living

AUCKLAND, August 25. "Whatever is saved to the eonsumer by reduced prices -brought about by piiee controi will be colleeted from him in increased taxation. If the Government is sincere in its talk oi reducing consuineC. prices it should substantially reducu • taxation, " said the- president' (Mr. C. J..: Lenihan) at the eohf e.rence . of the New Zealand Eleetr.ical , Federation yesterday. Price ' "e q'ritrpl ' has ' become profft cbatroh During the election camphign the Government candidates will prob ably inrtke much of the reduction in the cost of living brought .about by tht reduction in'traddrs'' profits by way oi reduced mark-ups. What they will not -tell -the -public is that one of the prim ary- causes of high prices is high taxa tion, . much more so than traders profits, ' ' said Mr Lenihan. In 1947 a line of irons was sold at 72s wholesale, plus saies tax, said Mr. Lenihan. On each of these irons the Government took 24s 8d in Customs duty and saies, income and social security taxes. The shareholders were left with a net prOfit of ls 9d, yet they took all the risks. Why should we who take all the risks and do the work bt subject to att'ack by bureaucrats, be the butt of politicians and be treateci as near criminals because we mahe profits when the Government helps itself to such a large share of these ptpfits? asked Mr. Lenihan. It had been truly said that thj. power to tax was the power to destroy. "We are on the way to destruction by the excessive -taxes levied on "us. ■How illogical it is that the Govern-. ment reduces, through the controi oi•prices' division, the very source of its' inoonie. Left to themselves prudent businessmen built up reserves and employees should reuiember that these re* tained profits would help to keep them in their jobs when conditions becamc inore acute. Cuts in profit automatically cut into emjiloyment and security. " The federation 's executive had been very busy trying to get all trades to work togethcr in common defencc against- bureaucracy, but it was a heartbreaking task, said Mr. Lenihan. Apathy and fear were hard to overcome. The traders' only hope of sur vival was to unite and devise sume means of pooling their experiences and of presenting a common front to the bureaucratic attack.