The Daily News. FRIDAY, AUGUST 10, 1917. THE NEW INCOME TAX.

Taranaki Daily News, 10 August 1917, Page 4

The Daily News. FRIDAY, AUGUST 10, 1917. THE NEW INCOME TAX.

I Dealing with tlio Finance. Minister's new taxation proposals in their order of importance the land and income tax imposts naturally take precedence, for they are tho mainstay of the JJudget. The I Treasurer claims that those revenue pros ducers taken with the Customs duties, 1 estate and succession duties, and other 1 taxes, "will give a system which comI bines as nearly as possible ability to [ pay, equality of sacrifice, and universality of taxation; it avoids all unnecessary complexities, is sufficiently simple to be readily understood by all taxpayers, and is comparatively inexpensive in collection." It is now universally admitted that the incomo tax is the best, the cheapest to collect and the most equitable of all means devised to provide revenue for the State, provided, of course, It is framed on sound lines. There are some who prefer indirect taxation, but that method has many obvious disadvantages. Logically, the income tax stands

out as the most satisfactory of all methods, for it is based on a man's ability to contribute according to his means. The only disturbing factor in 'war time is the imposition of a tax on war profits, and though our Government has tried to extract an adequate shave of such profits, it has failed in the attempt and lias discontinued the effort. It might have been expected that during his visit to 'Britain Sir Joseph Ward would have completely mastered the system of direct taxation there, although several expedients have been made use of for the purpose. For instance, a distinction is made in the. Motherland between earned and unearned incomes, the latter being rightly taxed on a higher scale than the former, the difference being one shilling and twopence in the £ on incomes of £SOO. Extra war profits cannot possibly be deemed to bo earned income, yet our National Government has failed to devise a satisfactory means for getting a grip on these profits and has given up trying. If there is one part of the Empire where the war has greatly enhanced profits it is New Zealand, but political pressure has proved a greater power than patriotism. Well fiiay the wool kings rejoice over their easy victor;'. Tho Minister has avowed that bis new system of taxation will ensure everyone contributing according to his means. Theoretically such a result would be perfection, but the means for securing such a paragon of incidence do not scorn to bear out the admirable sentiment expressed by the Minister. The income tax starts at sixpence in the £ on incomes of ,£3OO and rises to three shillings in the £ on those of £O4OO, and thereto is added a special war tax of ninepenco to four shillings and sixpence, while the exemption of £JOO from the assessment gradually dwindles until it disappears on reaching incomes of £POO. This new taxation ranging from one shilling and two ponce to seven shilling and six pence replaces taxation from one shilling and two pence to tiirce shillings and eight-pence with the maximum rate on incomes of £SOOO, and is expected to produco £4,000,000, or £MS,OOO more than last year's receipts. It is therefore evident that although the wealth of the Dominion is increasing, the Wealthy are contributing little, if any, more this year than last, and yet there has been a persistent demand to make the wealthy bear their just share or the war burden. Why the graduated scale should stop at incomes of £O4OO is a mystery that requires unravelling for those who enjoy more than that sum are assuredly able to bear a far heavier ta.v. but as in the case of the graduated land tax, a halt is made just at the point wlvcre the screw should be applied with greater force and at a much increased ratio. Here, again, is courage lacking 'when it is most needed and tho burden on the less fortunate class made out of all proportion to that of the extremely wealthy. In Britain the scale increases up to incomes of £IOO,OOO, but it is not likely such a high figure would bo reached in the Dominion. Probably tho greatest anomaly of th'o Budget is the imposition of a graduated income tax with one band, and sweeping it away with the other 'by allowing the capitalists to invest all thc*ir wealth in the war loan free of taxation. There are many of the miserly rich 'who would not hesitate a second to escape a thirtyseven and a half per cent, impost by the means alluded to, but this calls for an efficacious remedy. The only other point that calls for attention in regard to the income tax is that no account is taken of a man's family, so that a bachelor and the father of a numerous family are placed on all fours, and this does not seem either right or just.