TAXATION BURDEN

Sun (Auckland), Volume III, Issue 908, 27 February 1930, Page 10

TAXATION BURDEN

UNITEDS ASSAILED BY BUSINESS MAN LABOUR AND PRIMAGE DUTY Disappointment that the present Government had placed additional taxation burdens on the community was expressed in a written address by the retiring president of the Auckland Chamber of Commerce. Mr. H. T. Merritt, read at the annual meeting of the chamber today, in his absence abroad. Mr. Merritt referred particularly to the primage duty. JT was apparent to any thoughtful observer engaged in business that the inevitable increase in imports which would take place during the current financial year would provide sufficient increased customs revenue to make the imposition of further duties from a customs revenue point of view quite unnecessary, the retiring president said. This fact w» 6 pointed out to the Government both in the Press and elsewhere, and an appeal was made by the chamber in the closing days of the past session urging the Government to repeal the proposed increase while there was yet time. The Government would not do it, and the tax remained. But it*tnu«t be recorded that, in view of the nature of its operation, it was ona of the most regrettable ways of raising revenue which could be devised, for by the time Us effect was felt by the consumer, the tax, swollen on account of the interest and profits of the wholesalers and retailers, through whose hands it had passed, was taking far more out of the pockets of the consumers than it brought to the treasury. For this reason the effect of the tax upon costs of production, both in primary and secondary industries, was much more severe than was warranted in any consideration, Mr. Merritt said. STUPID AND INEQUITABLE “It must be, therefore, the earnest wish of everyone that the Government will redeem its promise, and take the earliest opportunity of removing this particular imposition,” he proceeded. “In fact, the whole of the primage tax should be abolished. It was introduced purely as a war necessity, and it Is high time it was finished with. If the ethics of taxation demand that those best able to bear the burden should be made to pay, then taxes such as primage duty are both stupid and inequitablestupid because they are primarily a tax upon production, Inequitable because their ultimate burden in the main is imposed \ipon those least able to bear it. “The manner in which it was carried with the support of the Labour Party must also be noted,” Mr. Merritt continued. “For the leader of any party aiming to govern the country to rise in the House and publicly repudiate one of its most cherished principles for the sake of political expediency cannot but be regarded as an indication of a deterioration in our political life.” It Is impossible to ignore the fact that the extra primage tax reflected no credit upon the Government. Dur,ng the days of national affluence, the previous Ministry had the opportunity many times of removing it. It did not do so. The omission must remain a blot upon its records. There was, however, no excuse for any Ministry to accentuate or perpetuate the errors of its predecessors; and, in a Parliamentary session singularly lacking in vision and statesmanship, that tax must surely stand out as a great political and economic blunder, Mr. Merritt said.

In these days, the need for public and private economy was, to the lease observant person, vital not only to promote the settlement of our waste lands and to increase production and encourage industry in all branches, but also to stimulate a return of confidence In the possibilities and opportunities of this country. Such confidence was unfortunately still noticeable by its absence, and increased taxation made the position worse. It would probably be found that private incomes were diminishing, which meant that a part of the heavy taxation would have to be paid out of capital. In this way heary taxation acted like a two-edged sword —by imposing burdens which industry was not able to bear, and at the some time destroying the source from which revenue came.