TAXATION

Hokitika Guardian, 25 October 1929, Page 2

TAXATION

HON. T. S. WESTON’S VIEWS. WELLINGTON, October 23. “Taxation now is so heavy that additions to its amount, or alteration in its incidence, have more far-reach-ing effects than in pre-war years, when- it was comparatively light,” the Hon. T. Shailer' Weston, M.L.C., said in his presidential address to the New Zealand Employers’ Federation to-day. ‘‘Apprehension of changes weighs Upon those responsible for the development of our trade and industry. The worst effect of the recent debates upon the increased Land Tax Bill ip the impression left upon the men who have, by hard work and economy, built up businesses and accumulated capital, of the apparent indifference of Parliament towards the question of the fairness of the incidence of any taxation it may impose upon a class of men thought to be wealthy.

“It is men like these who provide avenues of employment for a number of their fellow citizens, yet it would almost appear as if the fact that these men have made a success of their lives makes them outlaws from society, to he knocked on the head by any means, whether humane or otherwise. ■

PRINCIPLE OF TAXATION. “The graduated land tax, as it does not take account of the mortgages upon the land, is undoubtedly unequal in its incidence upon the turners of land. The farmer who has to pay interest upon a substantial mortgage derives a much smaller net income from his property than the owner of a similar properly without a mortgage. Yet he has, with less income, to pay the same graduated land tax “This is a violation of one of the most important carons of taxation—that a tax must be equal in its operation as between the members of the class it affects. This position has been made abundantly clear, and no man, unless he is prepared to convict himself of gross economic ignorance, can dispute it. “Yet tins form of taxation is to be heavily increased, and the only Preventive suggested to remedy the admitted evil is a hardship clause which any 'lawyer of experience would condemn as totally inadequate, dangerous in principle, and imposing an unfair strain upon the officials administering it. What makes this matter worse is that the men whose proper-

ties are mortgaged, and on whom the burden is thus the heavier, are generally young men with energy, industry, and initiative, anxious to find the v.Adest possible scope, for the use of all their, talents. , .

DOUBLE ’PURPOSE TAX, “Again, the tax is intended to effect a double purpose—to break up estates suitable for, and capable of, subdivision, and to provide increased revenue, Taxation having a double purpose is always dangerous, and likely to cause injustice. What makes it worse in the present case is that Parliament has not insisted upon a detailed consideration of the question as to how many of the so-called large estates are really capable of and suitable for subdivision. The information on this point has been so sparse as to be really valueless. Protests as toftthis injustice are swept aside with a halfcontemptuous observation—‘the men affected can pay.’ “I am not contending that landowners capable of contributing more to the revenue should not lie further taxed, not that lands capable of subdivision should not -bo further subdivided. My point is that the methods chosen are unfair and unjust in their effect, and that the legitimate objects aimed at, namely, a greater revenue from the wealthier landowner, and increased subdivision could have been effected by other methods easily thought out and just as effective and at the same time fair. BRITISHERS LIKE JUSTICE. “Britishers, whether rich or poor, like to be treated justly as between themselves individually. Those able to hear heavy taxation will bear 'it with greater .equanimity if it is, imposed fairly as between those liable to pay. The supporters of this increase bravely assert, ‘Wliat docs it matter if it is not strictly just—it only affects a few, but the unfair treatment meted out to-day to the landowner may be the fate to-morrow of any man or corporation which has built Up a Substantial business or institution in this country.

“As was observed-, during the debates by one speaker his objection was that the proposed tax on landowners was only one step forward. It is rather strange to contrast tens indifference of Ministers and members of Parliament towards the qiitruion of the justice of their impositions with the appeals made almost at the same time to those engaged in industry and manufactures io oruicuvour, by the expansion of their businesses, to employ more men. Yet if they do so and succeed, they row have the uneasy feeling that tlieir success means that there is a possibility of subjection to harassing and

punitive taxation which may cripple or even drive them out of business, or, alternatively, to competition with State undertakings.

NATURE HAS SAFEGUARDS. “The truth is, we all do not recog-, nise the function Nature creates men, of material means to fulfil in the. economic world, and • the safeguards she imposes to ensure 'its due performances. As pointed out by Sir Josiah, Stamp, this class are necessary , in order to accumulalje capital for reproductive investment. Having more than is necessary for their subsistence they must save, and their savings, unless burled in the ground, are used either by themselves or by those to or with whom they are lent or deposited for the further development ot reproductive enterprises. “The misuse by an owner of Urnse savings is quickly cheeked. If be spends too much on food or drink • if, in place of walking, he uses motorcairs, ill-health and the impairment of those faculties on ovhich his ontinued success in business depends inevitably follow—sometimes death. Further, lest the descendants of these men should become too powerful, their children have not that spur of necessity which 'is the greatest . incentive to success. When these men have passed beyond Nature’s control, death duties still remain.”