INCOME TAXATION

Hokitika Guardian, 18 September 1929, Page 7

INCOME TAXATION

fairer than land tax

DOMINION’S FAVOURABLE POSITION.

WELLINGTON, Sept. 14,

Mr H. D. Vickery, who presided at the annual meeting on Thursday of the Wellington branch of the New Zealand Society of Accountants, stated that the New Zealand system of income taxation, because of its simplicity and economical collection, had obvious benefits when compared with the systems of other countries.

New Zealand, said Mr Vickery, was not peculiar in regard to increased taxation, income and other forms, since 1914, but the world had gone through processes of change never conceived, and the next decade of economsits would look back on this period and find it a very fruitful one for research. The original conception of taxation, of course, was the principal that the individual of the State should contribute something to the protection they enjoyed under it. At first it was taxation oil property as ability to pay. Income tax was a direct tax, one which in its primary conception should not be passed on very often with a profit, and in some instances with a large profit. The speaker proceeded to deal with the presumptive tax as applied to goidmining companies and to banks which found, it difficult to ascertain exactly what the income was from where it was derived. In England the presumptive tax was applied to farmers, whose income before the war was presumed as about half the rent. It was difficult to ascertain what the farmer’s profits were, and this applied to Australia and New Zenland as well as England. There was the question of the value of stock and relative periods, what were capital improvements and what were revenue improvements. FARMERS AND INCOME TAX. Mr Vickery expressed the view that it was a- pity New Zealand dropped the income tax on the farmer, a remark which was greeted with'applause. Income tax was better than the land tax, which was nothing more than an 'uneconomic rent, and they had to pay it whether they earned it or not. Some farmers objected to income tax on the ground tlxvfc ‘the more you earned the more you had to pay,” and that it was directed. against the man who worked hard. Despite the minor objections, income tax was the better tax, and following the trend, of recent events in Parliament, lie thought it would be the best tiling for the farmer. For nearly a century income tax was only thought of as a matter of pence in the £1 and he wondered what some of the taxpayers of 1815-1840 would have said had they been asked to pay as much as 8s in the £l. Tfie speaker dealt with the manner in which the graduated tax was introduced. He likened the higher scale of graduated income tax as something like painless dentistry. Company and municipal (taxation were • also dealt with. He drew attention to the great disturbances caused by any changes in the incidence of taxation, and referred to the effect of the changes made by Hon W. D. Stewart about two years ago. They had to be very careful in making changes in a system, which had been stabilised for so many years.

In conclusion Mr Vickery summarised the benefits of New Zealand’s system as compared with those o£_ Australia and Great Britain, and pointed out that among its benefits were simplicity and economical collection, developed and systematised in a highly specialised way. Many Ministers had been reluctant to make changes, for they realised now they, disturbed the financial equilibrium and were not sure of getting the same amount of revenue if a change was made. Thanks wore accorded to Mr Vickery for bis address.