The Sun MONDAY, FEBRUARY 13, 1928. THE GROWTH OF TAXATION

Sun (Auckland), Volume I, Issue 277, 13 February 1928, Page 8

The Sun MONDAY, FEBRUARY 13, 1928. THE GROWTH OF TAXATION

ARB New Zealand taxpayers overtaxed, and is a great deal of the money taken by the State’s official highwayman spent to the best advantage or wasted on departmental extravagances? These questions need to be asked; for implied answers to them involve the cause and effect of trade depression and record unemployment for this season of the year. It so happens that, in order to synchronise with the payment of taxes throughout' the Dominion this month, the Economics Department of Canterbury College has issued a bulletin (No. 36, January) on “The Growth of Taxation.” Its contents of cold facts and logical arguments together form a dispassionate indictment of the Government, and leaves it in a miserable plight.

The economists, who compiled the deplorable record of the growth of taxation in this country during the past quarter of a century generally, but particularly since the pre-war year, have made generous allowance for war charges and other abnormal conditions. Even then, and entirely without political prejudice, the story of increased taxation is a grotesque dossier of imposition and squandermania. State taxation in 1900 totalled £2,891,000 (in even thousands) ; in 1913 the total was £5,607,000; hut in 1926 the sum had swollen to £16,978,000. In the same period local body rates jumped from the modest aggregate of £714,000 in 1900 to a total of £5,040,000 in 1926. Thus, together, State taxation and local body rates have increased in 28 years from £3,605,000 to £22,018,000 a year. It is not surprising that industry is crippled, unemployment rife, and that the Government, after devoting twelve months’ attention to the subject, is not yet able to solve the problem of unemployment.

To those who do not care to swallow financial statistics in great gulps, let the taxation record be simplified to easy terms of enumeration, though not, unfortunately, to easy terms of payment. State taxation and local rates per head of the population have increased from £4 14s 6d in 1900 to £ls 19s 3d in 1926. If comparison is made by reducing all the figures to index numbers, the growth of taxation and rates combined has increased from 485 to 2,970. Thus, since 1900, while population and prices together have increased 274 per cent., taxation and rates combined have increased 513 per cent., or nearly twice as much.

It is pointed out by the Canterbury economists that the expansion of taxation has involved, both the greater use of old sources and the exploitation of new means of taxation. In other words, which are our own, war conditions gave finance Ministers their opportunity to beeome administrative highwaymen, and they have never missed a chance to exploit it. Though national economy has been preached, it seldom has been practised. There lias been a three-fold increase in indirect taxation through the Customs since 1913. Income tax exactions have increased from £463,000 in that year to £3,369,000 in 1926. Local rates have nearly trebled since the last year before the war, hut have increased more than seven-fold since 1900.

The plea that war has been the cause of all the trouble is shattered by these professors of economies. For 1925-26 war charges totalled a little more than £5,000,000, including interest, sinking funds and war pensions. The total State taxation yielded nearly £17,000,000 —an increase of about 112 per cent, above the 1913 taxation. It has been shown, further, that the argument as to borrowing heavily for. reproductive, self-support-ing works, is grossly overworked. As a matter of fact, such services and investments provided less than £5,000,000 of the £10,500,000 required for the payment of debt charges, excluding sinking fund payments; the remainder came from the taxpayer.

It is clear that too much of the rank growth of taxation has been due to the expansion of public services. The time has come for a halt; the time has also come for a national stocktaking and more effective administration.