BURDEN OF TAXATION.

Manawatu Herald, Volume XLVI, Issue 2699, 23 February 1924, Page 4

BURDEN OF TAXATION.

IS IT EQUITABLE? All economists agree that excessive taxation impedes industry and is bad for all sections of the community, and for this reason the Finance Minister is to be congratulated on his general policy of relieving the country of the heavy burden of taxation imposed during the war. We fear that however good such a. policy may be in principle, the actual reductions made last Session are open to serious criticism and it is to be hoped that Parliament, when it meets, will review the position and thoroughly investigate the whole question and place our taxation on sound lines, and any further relief should be carefully adjusted according to the general principles applicable to equitable taxation. Before the war people deriving their income from land paid no income tax, bnt in place thereof they paid land tax —with this exception, that owners of pastoral leases and small grazing runs, as a general rule, paid no land tax, but were liable to the usual income tax. As a war measure, every income, whether from land or otherwise, paid tax and there is no doubt that this unduly penalised many farmers and the demand for relief was justified. Last Session legislation was passed to remedy this burden, and the tax on income derived from land was abolished. We assume that in dealing with this matter the House looked at it in too general a way, because by that legislation not only is the farmer who pays land tax relieved from income tax but the farmer of leasehold, who pays no land tax, is also i-elieved, and now pays no taxation at all — This is, of course, entirely inequitable for there are many citizens receiving all the benefits of our public services and in receipt of, in some cases, very large Incomes who, we believe much to their surprise, are not called on to contribute in any way to the general fund. It ean only be supposed that it was an oversight due to the members of Parliament not giving proper attention to the legislation and its effects, but it is an oversight which is not creditable to the Government in office and should be remedied at once. Another apparent anomaly should be looked into and remedied —namely—that while a farmer only pays land tax, a business firm pays both land and income tax. Is this equitable? It does not appear to be so. In mentioning this last matter we do not desire to raise the Town v. Country cry —and we are sorry this aspect was recently mentioned at a public meeting. The political cry of Town v. Country is bad, and if it is once seriously raised our prosperity will be in danger. The one cannot do without the other and must pull together, and especially in the case of taxation must we see that the matter is dealt with on national and not sectional lines. The basic principles of taxation of the individual should be in proportion to the protection and advantages he receives as a member of the State, his ability to pay, and the general effect of the system on the productive, trading, and social advancement of the community. For this reason the entire exemption of incomes from leasehold land, which were taxed befoi’e the war, is inequitable and requires review, also careful enquiry and consideration should be given to the vexed question of company taxation.

(Contributed by the N.Z. Welfare League).