REDUCING TAXATION

Hokitika Guardian, 27 July 1928, Page 1

REDUCING TAXATION

AMERICA’S EFFORT. ITS EFFECTS. (TAXPAYER.) -ue address Dr Milbank Johnson, tho President ot the California Taxpayers’ Association, delivered at tho week-end to a gathering of Wellington s professional and business men, might have been spoken from the floor of the House of Representatives with advantage to the whole community. Dr Johnson is paying a flying visit to the Dominion, allowing himself some twelve days between bis arrival in Auckland and bis departure from that port. Notwithstanding the fact that be had only a few hours to spend in the capital city, however, lie readily acceded to the request of the executive of the New Zealand Taxpayers’ Federation to devote one of them to a talk on American taxation, simply stipulating that it would be understood lie know nothing of tho Dbminon’s polities or politicians and wished to avoid treading upon anyone’s toes.

With this much conceded, Dr Johnson spoke most interestingly on the subject bo bad made bis bobby and study in bis own country. The field of taxation was so wide, be said, that be would not attempt to cover it all in the short time at liis disposal; hut he would touch briefly upon some phases of tho taxpayers’ movement in the United States which he thought would bo of interest to his bearers and perhaps to the New Zealand public generally. The movement in America bad been brought about by a feeling on tlie part of business men that too large a proportion of their efforts was going towards the cost of the Government, in order to reduce that load on both big business and small business it was felt that tho only course to adopt was to reduce the amount of taxation. EFFICIENT IN GOVERNMENT.

Since the war, the visitor went on to say, the inevitable increase in taxation on business bad made it important that every possible means should be employed to increase the efficiency of business and to lower the cost of production. Of course labour charges had largely increased and as a consequence tlie cost of production bad steadily advanced. This being the case, in order to give fair returns to their shareholders manufacturing firms bad to reduce the of production by means of new and improved machinery and by the adoption of hotter methods of work. In these circumstances it had occurred to some of tho American business men that if increase in efficiency in business could reduce the cost of production, it might bo that an intensive study of the methods of the Government might bring about increased efficiency that would result in a reduction in the cost of administration and a corresponding reduction iii taxation. Tho idea grew with observant people, and Dr Johnson himself was entrusted with the task of organising a California Taxpayers’ Association with a view to increasing tho efficiency of the business of the Government. While the duties of the Government were most difficult and complex, it was, apparently thought by most people in America, and perhaps elsewhere, that some persons who were not successful in ordinary business life were able to bring about efficiency in Government business. The promoters of the new movement. bad felt that before they could advise the officials they must instruct themselves. They tried, therefore, to get as near as possible, a cross section of the tax-paying public, so that they might ascertain their conditions, their relations to one another and to the Government. That was the foundation on which the Association built. EXPERT INVEST IG ATION.

The Taxpayers’ Association, Dr Johnson continued, realised that in order to get public opinion on its side, it would have to feed the public on facts and not upon theories. It bad no nanacea for high taxes to offer; it had no great “cure-all” of taxation; it did not worry about forms of taxation—single tax, double tax, or triple tax—but it knew that taxation was too high and that it was the main cause of tlie comirty’s financial troubles. With this conviction the Association came to the conclusion that if it could convince 5 per cent of the people of the righteousness of its cause, its battle would be more than half won, and towards this end it set up a Department of Research,” with a budget of about £50,000 a year, which was devoted exclusively to research in regard to Government efficiency and expenditure.

The Department find a staff of about fifty paid employees selected lor their special knowledge and, in addition, experts in various branches such as accountancy, engineering, transport, and so forth. In Dr Johnson’s own business, that of life insurance, officers were lent to the Association as experts in examining State and .Municipal pensions, salaries, allowances, and so on. There was no spying, but a great deal of careful, conscientious examination. It was found that the system of Government accountancy was slip-sluid and sometimes seemingly devised to deceive the public. Efforts were made by the experts to produce balance sheets from the figures supplied to them ; but though they succeeded in some cases in a much larger number they tailed to do more than disclose an extremely unsatisfactory state of affairs.

RESULTS. In summarising tho results obtained by the California Taxpayers’ Association, Dr Johnson had no doubt that much of the seed the organisation had strewn had fallen on fruitful ground. It was impossible, lie admitted, to say how much money had been saved as a result of the Association’s efforts, hut the Executive found last year that lor every cent spent in its work a saving of 285 cents to the taxpayers had been effected. That was a return of something like 28,099 per cent upon the subscribers’ money, showing individual assistance and co-operative effort to be very excellent investments. The Association could go to the taxpayer and say: “This is not a charitable organisation ; but it offers von a return ot 28,000 per cent on your money,” and the taxpayer rarely refused to- assist in the good work. The reports ol the Association’s research work, showing how economies had been effected and how efficiency had been increased, as well as bow extravagances persisted and how inefficiency continued, were distributed to tens of thousands of voters who in the end would exercise more or less influence on the Govern-

ment. ■» Replying to a question at the conclusion of Ids address. Dr Johnson said that when the Association first started operations it encountered all sorts of opposition. Some State authorities had refused to give access to their records; but the trouble had been overcome by lerral proceedings and since then the Association’s relations with the authorities had been entirely amicable. It had established a reputation for fair-

ness andTconstructive criticism, and only a few months previously the Governor of the State had commissioned the Executive to examine and report upon the affairs of one of the State’s institutions. Mutual respect and confidence could go no further.