The Evening Star FRIDAY, SEPTEMBER 25, 1936. THE MERRY-CO-ROUND.

Evening Star, Issue 22453, 25 September 1936, Page 8

The Evening Star FRIDAY, SEPTEMBER 25, 1936. THE MERRY-CO-ROUND.

It is not unreasonable to compare the taxing system to a merry-go-round. There is nothing static in it. In accord with the ideas of various schc Is of thought, the burdens are shifted or radically adjusted with the coming into office of a new Administration. This is the condition that prevails in the Dominion at the moment. Drastic changes in taxation have been made, and industry perforce is adapting itself to the new order. With the rises in wages and the imposition of the forty-hour week there is a feeling of elation among the beneficiaries, but looking at the position broadly this may be illusory, for whatever imposts are put on industry must, in the long run, be paid for by the community. There are very few business concerns, indeed, that are in a position to bear t> extra costs and carry on as in the past. Therefore the consuming public must pay for the rise in prices of goods and services. One of the worst features of the Government’s proposals is that money that would normally be, devoted to the extension of business enterprise will now go to the tax-collector. Ministers have repeatedly declared their desire to see stimulation and expansion of industry, but their severe taxation methods must have the opposite effect. Some convincing criticisms were made in the House of Representatives yesterday when two taxation Bills were under discussion. Mr Poison drew attention to a curious anomaly in the new income tax schedule which has caused some comment. His point was that an analysis of the figures revealed that the taxation on incomes between £3OO and £6OO would be increased by 60 per cent, whereas in the case of incomes ranging from £7OO to £I,OOO there would be practically no increase at all. No explanation of the reason for thu discrepancy is given by Ministers, but there is no reason to suppose that any sinister motive is involved. This is a question of detail. The wider issues are more import-.nt, and under this head some sharp comments were made. Mr Poison remarked that the Government talked of creating new

industries, but under its taxation proposals it would be very difficult to maintain, the existing industries. His contention, which has a considerable amount of validity in it, is that the Labour Party is plunging blindly towards its common ownership plan without any consideration of the consequences. It is indisputable that the tendency to lean on the State is increasing and is encouraged by the Government, and that the principles of private enterprise and initiative, to which we owe the prosperous condition of New Zealand to-day, are being relegated to a secondary place. Particular attention was directed by Mr Holland to the effects of the graduated land tax, which, he declared, represented virtually a capital levy designed to break up big units which, in most instances, were necessary for the economical conduct of the concerns owning them and for giving service to the public. These are aspects of the Government’s taxation proposals that will make themselves manifest as time passes. The Cabinet, with much beating of drums, announced its intention to help the farmer with the guaranteed prices scheme, but whatever benefit he may gain in this way is to be offset by the graduated land tax and the greatly increased prices he will bo obliged to pay 'for his goods and services. With few exceptions, the individuals or companies owning land in the cities or in the country are using their properties to the utmost economic advantage, and the ultimate result of the reimposition of the graduated land tax will be to put a spanner in the wheels of industry. Excessive taxation must inevitably have a retarding effect on the country’s economic progress. The fact that it is now more than £l9 per head of the population cannot be regarded with equanimity.