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Hokitika Guardian, 27 June 1922, Page 2

Tim uses of money as the material menus to create employment and confirm national prosperity are being brought home gradually in quarters where the enlightenment was most needed. It is the custom generally of Labor to deride Capital, and to seel; the confiscation of the latter ns a first line of action. But the uses of capital to promote industry, which is tile welcome portal for the worker, are being recognised, us we say, in the proper quarter, .Mr l'\ Appleton, secretary of the Home Federation of Trade Unions is reported lately to have said: “The most unhappy of prevailing assumptions is that taxing Capital relievos Labour. To the extent that the Government needlessly takes capital by way of taxes, it is responsible lor unemployment. Income-tax is said to he tlie most equitable of all taxes because it places the burden where the money is. Up to a point there is value in this contention, hut when the tax absorbs too large a propo - tion of the income the incentive to effort is reduced, and men fail to maintain their maximum. That point has been reached to-day. Thousands of capable men are disheartened, and they are resenting the attempt to place too large a proportion of their earnings at the disposal of bureaucracy. This is b'd for everybody, hut particularly is it had for the thousands of unemployed. They, together with those who claim to represent them, should insist upon the tax being reduced, and upon the money remaining where it can he used to promote the good of industry. That this is sound advice is indicated by the fact that under present British taxation, an English taxpayer with a nominal income of £20,000 has to pay CIO,OOO of the amount to the Treasury and municipalities. Clearly such taxation tends to restrict trade—and incidentally employment. The spending power of the employer is so reduced by taxation as to become a menace in the losses in industrial employment' and production. It is well to have these points thoroughly realised when there is the desire to raid capital unduly, both in regard to taxation and wages. A sound understanding of the economic position will help to save the country industrially.

So Far as New Zealand is concerned, tlie burden of its taxation, while not as great as In Britain, is ktill nifiph beyopfl tVIG Tilths of ftp ppopje, with fte w# iM ftoTt&EP of mrinjv

effect on businoss and trade. The Government maintains the high rate of taxation because of its needs for administrative purposes. The position seems to be growing so acute that to be honest and fair in the matter, the Government should further ex. plore its administrative costs to see what additional savings can be made in that direction. It is an unfortunate fact that the Government was slow to curtail its administrative expenditure when the call first mine. It is a notorious fact that at that time the rate of expenditure had grown altogether abnormally- which was all the more reason for curtailment—ictrellc llniont, if von will. But the Government hesitated about attemi ting anything so unpopular and proci nsinnted till the duty became a pressing ob igr.tion. ltven now the Government dallies with the question of curtail ng administrative costs to help reduce taxation on the other side of the ledger. There are, of course, great incre ses in the annual expenditure as a result.of loans and war obligations. 1 1 is lint possible to effect any Change in tlu.se matters, ft r interest must he paid, principal provided for, and pensions kept good. It remains to reduce the public service to a lass costly condition, and to model the departments ill snob a way as to maintain their effectiveness, and at tlie same time direct the State earning institutions into profitable lines so as not to be a burden on revenues. This is tie special task I eforc the Government at this juncture and in a very short time there will be a test of tlie lioila tides of file Government to demonstrate how far it is sincere in the desire to. make ends meet wit u a seasonable reduction in taxation.