TAXATION OF FARMERS.

Taranaki Daily News, 14 April 1917, Page 2

TAXATION OF FARMERS.

MR. PEARCE'S VIEWS.

In conversation with a representative of tl:« llawera Start, Mr. Pcarce, M.P. for I'atea, made the following statement:—

I Imve seen a report of Mr. Wilkinson's address re farmers' income tax and excess profits, also letters to Ministers. 1 am rather sorry that I did' not see a statement from him, as representing so many farmers, that next session he would endeavor to have these taxes repealed, and more equitable taxation put on the farmers to whatever extent required by the exigencies of the war. During last session I protested against this taxation, foreseeing the difficulty and unfairness that must occur collecting such taxes from farmers, one in fifty of whom does not keep books. The position, now is that, if the farmer is not able to fill up the return correctly from memory, having no records, the Commissioner of Taxes assesses his taxable income, and I have been shown some most extraordinary assessments. The fanner then has to prove that that assessment is not .correct, and having no records he is unable to do so. So you will see the farmer is in a most unfortunate position. The Commissioner of Taxes, under section 14 of the Land and Income Tax, 1910, is in the position of an autocrat, -who can levy almost what tax ho likes on the farmer who keeps no books. I am strongly opposed to an income tax on farmers. A medium farmer ; n average years (not war period) will make a net profit of about 5 per cent, on his capital. He will pay no income tax, as2he is allowed to deduct ;5 per cent, on his valuation. A good farmer who keeps first-class -stock!, and makes two blades of grass grow where one used to grow, will make 10 per cent, on his capital. Ho will at once have to pay income tax, a penalty on the man the country should encourage, because he is increasing the productivity of the country. In my opinion, taxntion required should be obtained from an increase in land tax, a heavy import tax on American motor cars, ' a tax on amusements, increased tax on beer, and also on tea, and a war profit levy of 5 or 10 per cent, on all produce exported. Ten per cent, would produce three millions. Then the farmer who got the advantage of war prices would pay. This also would keep down' the cost of living in this couiitry by 10 per cent, on nearly all food, products, doing away with .the* need for the unfair tax of %d per lb on butter-fat. I don't think it is any use to apply to Ministers to alter the present position. Parliament passed the land and income tax and the excess profits tax last session. This is now law, and Parliament only (not the Ministers) has the power to alter the law. But I hope every member representing fanners in the House next session will see that the present very unequal and unfair system of collecting taxation is abolished.

Mrl. WILKINSON EXPLAINS.

.Mr. C. A..Wilkinson writes:-

Mr. Astbury disagrees with Sir Joseph Ward's income tax system, arid in lieu fcnereof advances a method of bis own, and I propose to show that, whatever may he wrong with the Finance' Mincer's proposals, that Mr. Astburv's system would-be much more unjust, and even cruel in its incidence. My objections to increased land taxation is that farmers would be compelled to pay even though losses were made on the'year's operations. In the south manv fairlv I well-to-do farmers have been almost ruined by droughts, and a temporary stoppage of exports through any cause would dislocate farmers' finance through the length nnd breadth of the land The abolition of the £SOO exemption advocated by Mr. Astbury would -hit all small farmers, and;, worse Btill, would include within the scope of the land taxation every working man's home in the. Dominion. The export tax has th» same fatal defect, that it would have to oe paid even when the losses were incurred. Further, the percentage would be just the same on the small butterfat man as on the richest squatter, (the income tax varies from Is 2d to 3s ftl). It is also claimed that an export tax would cheapen foodstuffs on the local market, because in the main prices in New Zealand are fixed on the not London basis. Well, lam sure even Mr Astbury will not attempt to justify the present export tax on but-ter-fat, imposed in this ease to provide, the New Zealand public with cheap butter. My friend claims that his two methods are "infinitely more just" whereas I claim that they are infinitely worse—that thousands of workers who are worse off as a result of the war would have to pay land tax, that thousands of small farmers who do not pay income tax would have to pav not only more land tax, but pay heavily under the export tax. The present system was not of my making, and it does not work out fairly in pll eases, yet it imposes absolutely'no tav at all on net incomes below £3OO per annum, nor can any excess profits tax be charged whew an income is below £3OO. Further,'a taxpayer is allowed 7J per cent, nct'on his capital, and an allowance of anything tip to £UOO per year for personal exertion. Nor is he charged under tr..s head at all in 1910 unless his income was greater than before the war. AM this safeguards the small farmer ard landowner, who under Mr. Astbury"? system would both come in find ass'is* by their contributions their larger and more wealthy brother. The main trouble in this district is that farmers do not understand the somewhat complicated system of returns required by the. Te.x Office, and in scores of instances are paying on more assessments. In conclusion, Sir, can we take Mr. Astbury seriously when he talks about those with incomes of abouti £IOOO escaping with payments of £25 to £SO. The iiv.ome tax alone on an income of that size is but just under £IOO.