ABOUT TAXATION

Dominion, Volume 13, Issue 43, 14 November 1919, Page 8

ABOUT TAXATION

THE'GOVERNMENT'S POLICY

NO MORE LOANS FREE OP INCOME TAX

By Telcuraoli—Special Reporter. Waiuku, November 13. A Statement of his policy in regard to taxation was made by tho Priino Minister speaking nt Waiuku tai-niglit; Mr. Massey said that the taxing system urgently needed revising, but there liad been no\ possibility of dealing with k during tho session that had just come to an end. He said that ir. taxation wo had departed from the principle that every man in the community should contribute to the taxing of the country in proportion to his ability to pay, and that this was especially so in connection with tho taxes on land. Bv the present system a. man was very often taxed on moneys that ho owed and evil was accentuated in districts where tho land was high-priced as in some parts of the Auckland district, in T.irnnaki, and in parts of Canterbury. The graduated land, tax had been intended to burst up large estates, butjiow with tho increased values of land it applied to some comparatively bmall farmers who were heavily mortgaged. A remedy should bo found for tilts, for such a state of. things 6hould not bo allowed to continue. The taxes on land were first of all tho or.ilinary land tax which had been increased bv fifty per cent, at tho beginning of tlio war; then the farmers' incomo tax, wliioh meant that every mui on the land making more than jJSOfl'per annum net contributed insonio tax accordingly, and on top of these taxes there was graduated land lax which, as ho had said, applied to quite small menSomething moro should ba done with regard to tlio exemption of married men with families from income tax. _ This principle was already affirmed in tho law, but the exemption was of very little value.

Ho referred also to the accumulated surpluses. These surpluses, he said, were tho result of heavy taxation during tho first four yeaTS of the war, and when the taxation was imposed it was intended that the surplus revenue should go towards paying the cost of the war. Local loans, however, had. been successful, and there had been no difficulty in raising them. The surpluses had been separated in consequence for later use, perhaps by way of sinking fund or perhaps iu casa a j loan might not be successful. These surpluses had mounted to over fifteen million sterling, and during last suasion the Government decided to use the money for purposes of 6oldi,er settlement and advances to soldiers. Tliis proposal had been very strongly opposed by tho Leader of tho Opposition (Sir Joseph Ward). Ho insisted that the surpluses should bo set apart as sinking funds. This would have meant that for tho pur-' pose .of soldiers' land settlement we should hftvo had to increase taxation, , which was unthinkable, or make an attempt to raise another loan. The last loan had pot been a. great success. It had indicated that wo had about reached the limit in local borrowing, and it was hardly possible to borrow in England at present Mr. Massey concluded with the important announcement that after this there would lx> no more loans free of income tax and no more forced loans. '