THE GROWTH OF TAXATION.

Dominion, Volume 2, Issue 583, 11 August 1909, Page 6

THE GROWTH OF TAXATION.

The lectures of Dr. Findlay may not bo taken very seriously, but they may shed some light upon a situation which Ministers, as a rule are above all things anxious to obscure. • What the AttorneyGeneral set out to justify in Timaru and Feilding was the steady increase in tho" amount of "taxation per head," or, in other words, the steady, increase in the proportion of the community's capital which the Government has taken in taxation. The argument by which it is sought to justify this increase is of such a character that, if it justifies' anything, it would justify an indefinite increase in the taxation per head. We do not wish at 1 the present moment to raise the question of the' incidence of , the taxation—although there are room and cause for disagreement there—but to emphasise the fact which Dr. Findliy is attempting to obscure, namely, that the Government annually, extracts an increased amount from the public and waste? it. Wealth is a thing that cannot be hoarded:' it is conon the whole, nearly as fast as it is produced. The capital that is taken in taxation would not be hoarded if it were not so taken: it would simply circulate for. the production of more national wealth. The State, however, always uses capital'wastefully. The Government in this country is particularly wasteful. The result , is. that the .capital taken in taxation is badly employed: the community has simply handed oyer some of its tools, which it could use efficiently itself, to a committee, the Government, which uses them inefficiently. But, the main point we wish to notice here is the absurdity of Dr. Findlay's reply to tho statement that the taxation is "so-and-so per, head." "The 'Year Book,'" he-points out, "as : certains the total . . ~ taxation . . . and says that the total so divided works out at so , much per headof : population. But the 'Year Book' nowhere pretends or. suggests that each of the population or the-majority of tho population pay at that rate." Very, true. But who has iever claimed that everybody, rich and poor, actually paid,, say, just £5 Os. 4d. in 1907-8? Some peoplo pay very little; some pay. hundreds or thousands of pounds. There is no dispute as to that, and Dr. Findlay knows it, although his case is, so desperate that he has to pretend that someone did mako the claim. When we say that tho taxation has risen from £3 '10s. to £5 "por head," we'mean simply that the Government is outrunning the constable, that tho growth of taxation is faster than i the growth of population. Dr. Findlay : has put forward nothing to justify the action of the Government in taking in taxation, not a fixed proportion \>f the ■ common capital (which, with the growth ; of population, would yearly increase in , tho total) t but a larger proportion 'cach ;

year. The argument against the Government is, not thujt the workman Smith pays £5 where once he paid £3 10s., but that the community as a whole is deprived each year of a larger proportion of its capital, and that a larger proportion of the community's capital cach year is wastcfully and inefficiently applied by the Executive. Under Socialism the Executive would take all the community's capital and direct it for the community. The larger tho proportion taken, obviously, the nearer we approach . towards Socialism. It is no reply to this to put absurdities into Mr. Massey's, 'or anyone elso'si mouth, and thori demolish thorn, as Dr. Findlay has done. But we are glad that he drew his red herring across the trail, for the very illustration which he used in completing the trail of his herring exposes the unsoundness of his case:

Supposo, ho said, tho American millionaire Rockefeller lived hero, and under our systom we taxed only millionaires, tliat ho wafl tlio only millionaire, and..consequently paid tho whole sum we required for tlio purposes of government. Obviously on this assumption none of the rest of tlio population would pay any taxes, yet, if you divided tho total population into the sum paid by Mr. Rockefeller —as such taxation it would in tlic caw' supposed run out at £i or £5 per head. This process of Btating the taxation on tlio population of Now Zealand under Mr. Roclccfcllor's contribution as £4 or £5 a head is scarcely more ridiculous than that relied upon upon by Mr. Mnsscy to show wlmt the masses of tho pcoplo in Now Zealand arc actually paying in taxation.

Rockefeller, that is to say, would pay £5,000,000 in taxes. Whero would he get that £5,000,000? Not out of a bullion vault, obviously. Surely it is plain that the £5,000,000 would'comc from the shops, tho mines, the companies, tho foundries, tho factories, tho farms, and the ships in which Rockefeller's capital was working. In other words, the £5,000,000 would come from the community using the taxed capital. Dops Dr. Findlay really think that, the community would go scot-free? Is it not quito obvious that in this case the community would pay its share per head through Rockefeller ?

Let us suppose that the Government, being antagonistic to Kockefellbr, made him pay £10,000,000. Just as before, the community would pay that £10,000,000, and would thereby give up so much more of its capital to be wasted by the committee of which Dr. Findlay is a member. With so much less capital available for industry, the result would be industrial depression. On the other hand, supposing that Mr. Rockefeller were only asked for £3,000,000. In that case the community would enjoy the benefits of £2,000,000 more capital efficiently utilised. These figures will enable the public to see quite clearly. :that a rise ,in the "taxation per head" meana a lowering of the general efficiency with which the community's capital is employed. In the community's hands capital produces wealth : in the State's hands it is either not wealth-producing, or else wealth-pro-ducing in an inferior degree. The less the Government'-requires in taxation, thorefore, the higher is the co-efficient of the community's wealth-production,, for ■ the greater will bo the proportion of' the capital left for efficient use. The fact of the matter is, of coursoj that the Government, in order to. keep itself in power, has required Buch huge sums of money for Departmental disbursement, that it wants every penny that the taxes ,wili yield. And the public knows it. " -