The Guardian (And Evening Star, with which is incorporated the West Coast Times.) SATURDAY, JANUARY 12th. 1924. CAPITAL LEVY.

Hokitika Guardian, 12 January 1924, Page 2

The Guardian (And Evening Star, with which is incorporated the West Coast Times.) SATURDAY, JANUARY 12th. 1924. CAPITAL LEVY.

Is- a recent issue the London '‘Tiroes ’, reviewing the British political position, said : “The only teal alternative to the Conservative Government is a Jau bour (Doveraiment, apd the TLabqur plat-ferm begins with a capital levy. 1 ' That is the one proposal on which all opposition to the British Latjpn? Tarty

lias concentrated. The idea behind lb 3 proposal is good; to reduce the national debt at once so as to reduce materially the annual payment for interest, which, in turn, would make it possible to lighten the burden of taxation. Everyone wishes to reach that desired goal, but the opposition to the capital levy is against tins method, not against the intention. Capital, ii is well known, i- a very nervous thing, and the very prospect of a Labour Government and a capital levy was sufficient to cause movements that seriously affected the money market. So much so that the responsible Labour leaders, such as Mr MacDonald and Mr riiniuas. made speeches in which they admitted the talue of maintaining national credit and promised that the levy proposal would be submitted to a boaid of expert- for consideration and repoit. A id tie investigation of the matter will show that tile proposal bristles with difficulties. First of all would come the question of the relative value ol capital. If two citizens each have 1'20.009 invested. one in Government bonds at say •V’o, and the other in shares in an industrial concern which, owing to the slump at Home, had not been able to pay a dividend, a levy of -V’,. upon those j coplo would not he at all just. Then the effect which such a levy would have upon future taxation would need to be caiel'ullv studied. The contentions

of the advocates of such a p.oposal that tile money obtained in the levy would he paid to the holders of the national debt who would re-invest it in national industries, remains to be proved. It would be much more likely that- the persons receiving tile monel would invest it elsewhere for fear inf another levy. One thing is certain. 'The ini):t*sition til - a levy wou!<l nmom:»tit-ally effect a reduction in the yield of taxes charged at the present rates, because it would reduce the fortunes and incomes to he taxed in the future. 11 the loss in revenue was simply balanced by tin' reduction in interest then the disturbing i ffci t of .such a selictne would not lie ‘‘worth the candle. ’’ With the possibility of sin h a levy il is easy to understand that lew business men would be willing to embark on any policy of expansion, and that is the very greatest ni'cd of the day in Britain. The i roposal to impose a levy in Kw itzi': land had disastrous results, and (Ids i- no time to introduce confusing issues. But, as the Speaker has .said, the I’arliauient of Britain will not fail, and the main plank in the Labour platform will have been thoroughly tested befoie il gets passed by Dial ancient Assembly.