TAXATION

Dominion, Volume 10, Issue 3155, 6 August 1917, Page 7

TAXATION

Sir,—Tho excellent remarks made by Mr. Hemingway to the Accountants' Association, us.reported in your columns a day or two ago, should receive general attention nt a period such as the present, whon heavily increased taxation is imminent and necessary. I notice that Mr. Hemingway specially, and rightly, suggests that in the matter of revenuo raising there should bo discrimination between income derived from property and that arising from personal exertion: in oilier words, between what is ordinarily referred to as earned and unearned income. That, however, leads to the question: What is earned, as distinguished from unearned, ; income? 'Let. us take tho case of an' individual who has steadily toiled up to the verge of old age to make'honest provision for the proverbial rainy day. When ho has found that his accumulated savings should produce a return sufficient to maintain him in tolerable comfort for the remainder of his days, he decides Ito retire from active work. Thenceforth ho will be classified as a man of independent means. The whole of his capital has resulted from the upright activities of a laborious life, and can it then be contended that the interest, derived from his modest competency, in fdture to constitute his only means of support, and which may be described as tho subsidiary product of his industry, is other than earned income? Very different is the case of the man who inherits wealth and to whom the tares of the toiler are unknown. His income is decidedly an unearned increment. The two instances. are certainly not parallel. Earned income is usually supposed to be that derived from any kind of work or business actively engaged in, but how can the fruit of the saved portion of that income be regarded as unearned? That is the point to which I would direct attention, for it seems to me the only income that can be fairly classed as "unearned" is that accruing to the man who has had wealth bequeathed to him, and who has not at any time been instrumental in building up his own httlo fortune. \ While on this subject, let me turn to Professor Hunter's address to the Social Democratic Society on Sunday last, ihe Professor is no doubt a man of means, and it is, therefore, in a sense, refreshing to find uncompromising advocacy of conscription of wealth among those who 'are possessed of substance, as it evmceß a spirit of sacrifice at a time when so much is required to frustrate the designs of our enemies. Usually such theories as the Professor has propounded emanate from those who have little 'or nothing to lose, and to,whom the endeavour to transfer the burden to the "other fellow is a species of grim pleasure; therefore little value attaches to what flows so glibly from such a source. The Professor, however, is a man of educational attainments, a student of economics, a modern Gamaliel at whose feet we must be content to sit and learn; consequently his utterances are in quite a different categorv' and cannot be lightly passed over In such circumstances is it liot. singlar that his carefully-considered views; should be'unfolded to what is-known as the "Eed Ted." 'fraternity?-! Ann etc.,