DIRECT TAXATION VERSUS PROTECTIVE DUTIES.

Hawke's Bay Times, Volume 8, Issue 393, 12 July 1866, Page 1

DIRECT TAXATION VERSUS PROTECTIVE DUTIES.

(From the Hawke’s Bay Times, 18th June.) “ Protection to native industry,” “ Taxation for foreigners.” and a hundred other such plausible but fallacious cries, have in times now gone by been made use of by candidates for popularity who, aware of the necessity of imposing taxes, and so dipping into the pockets of the people, sought to gild the nauseous pill, and perchance persuade the patient that it was a boon to be bestowed, and no hardship to be inflicted ; and by such disguises have made the contemplation of the greatest burthens rather a pleasant matter of contemplation to their willing victims than otherwise. These days are, however, past in all countries that make the slightest claim to an advancement in intelligence, and foremost amongst these stands our honored mother-country, which has long since discovered that protective duties, falsely so called, have no other tendency than to cripple trade and commence, —dry up the true sources of revenue, —and keep population poor and degraded. Hence, for a series of years past, a noted reform has commenced in her fiscal system ; protective duties have more and more given way before the advance of the true system, and she is endeavoring with all her might to do away altogether with the cumbrous and costly system of Customs duties, and replace them by a tax upon wealth and income. Her success so far has been almost unexampled in the history of nations. Commencing with the greatest caution, and having to contend against many and formidable difficulties in the prejudices of the ignorant and short-sighted, she has advanced from step to step. Many of the greatest difficulties in the way have disappeared altogether, and most of the objections at first urged against the new system have died out. People know what they pay towards the cost of government, take an interest in the matter hitherto 'anfelt, find themselves much better and more cheaply ruled, and have at length come to regard it in its true light as the proper and legitimate source of revenue. Like most imaginary difficulties, those that seemed to stand in the way of the Income Tax have been found to disappear on the close .approach to them. Without petty prying into private affairs, the Government officials learn through the medium of the banks a fair approximation to the affairs and standing of the members of the mercantile class; while, as regards the landed interest, there is none of that description of obstacle in the way. These officials, sworn to secrecy as regards the matters brought under their notice, have not been found to betray the trust reposed in them. It is no objection against the system of direct taxation that there are yet to be found some people who cling with the tenacity of the besotted to the exploded state of affairs. There are several reasons why it should be so, but these are all to be classed under the heads of ignorance or jealousy, and will not avail to obstruct the onward march of the better system, as they will gradually yield to the progress of advancing intelligence. Even jealousy of a neighbor’s superiority must ultimately yield to it from the sheer force of self-interest, if from no better motive. The victims of the old system cannot be long blinded to the fact of its pressure upon them in extracting from them larger sums than requisite for

actual necessaries, by which means they are kept from investing what ought to be surplus funds in comforts or reproductive and remunerative ways. But as we have said, the system of the substitution of direct for indirect taxation has made, and is making, astonishingly rapid strides. The Continental Powers are becoming fast converts to the faith of Great Britain in this respect. Almost each mail brings us confirmation of the fact of a reduction of duties by some of the Continental Powers, and we have recently learned that Austria itself has succumbed to the principle of free trade. This question has of late been brought home to the people of New Zealand by the declared statement of the policy of its Government. The people are informed that additional taxation is necessary, and that its necessities will be met by an attempt to introduce the direct system. But a few days or weeks will elapse before this matter will be brought iu a tangible form before the representatives of the people, aud it devolves upon the press to agitate the question, with a view of obtaining an enlightened expression of public opinion on it previous to that time. There are several questions dependent on or connected with it, but which must for the time being bo kept apart from it. These are, how far we ought to be responsible for difficulties brought upon us by no action of ours, but by the mismanagement of the mothercountry iu obstructing us in the conduct of an aflaif-that should have left us in a richer and more prosperous state rather than as we are—deeply in debt, and on the verge of bankruptcy. This, aud others of its kindred, must be for the present disregarded while we contemplate our position, and take the measures necessary for its security. Admitting, then, that the necessity for increased taxation is proved, it remains to consider what is the form it should assume, and here first we meet with the only semblance of an argument against direct taxation as being the most preferable mode. It consists in the fact of the ready existence of the machinery for the levying of additional indirect burthens, and the need of the introduction of new machinery for the new system. But to this there are two replies :—First, that the same was The case with the mothercountry in the commencement of the system there, which has, notwithstanding this, proved a success; and, second, the almost impossibility of adding to the burdens already borne by the public under the existing tariff, which is on all hands admitted to be already strained to the utmost endurable limit. If the question was the establishment of a system of raising taxes for the creation of a revenue, the Income Tax must have the preference over every kind of taxation, as being that which can be raised at least expense,—which gives to each man a personal interest iu the question of good aud cheap government, and which, though unquestionably unpleasant, is, from the fact of its pressure being exactly known, the most endurable of any. How much more, then, when the question is not the, first establishment of a system for creatirfg a revenue, but the supplementing of one already existing, and one that has already been extended to its utmost limits? - Let us hope, as we well may, that the imposition of this tax will pave the way for a new order of things, and be the earnest of the total abolition of the exploded, cumberous, deceitful, and expensive system of Cus-

toms duties, and tbe establishment of commercial freedom, which, by encouraging the commerce of the whole world, will add to the riches of each several part, and benefit not the least those nations or communities which are foremost in the ranks of the philanthropic laborers for the good of the whole human race.