TAXATION PROPOSALS.

Taranaki Daily News, 28 August 1917, Page 7

TAXATION PROPOSALS.

SOME INTERESTING FACTS AMD FIGURES. Speaking in the House on Friday, Sir Joseph Ward said at present they were imposing on the people abo"t six millions sterling in land fax. income tax, and special war tax. There had never been ax .-thing like it in New Zealand before, and it was an enormous sum for their population. He had made provision for everything that was likely to be required during the financial year; and if they had any luck, they "might be a1)le to add another two or three millions to their reserve accumulated in London. That would make the country financially strong within and give it financial st .bility in the world outside. (Hear, hear). Among the oversea countries New Zealand was the only country that was making such a provision to meet the altered conditions after the war. When that time came they might have to repay the ten millions that would by then have been advanced by the Post Office; and, if tho money Avas not noeded for that purpose, wiat a great opportunity it would be to reduce the amount of the. war debt! (Hear, hear.) They had made provision for the dependents of soldiers and everything else, and had tafcen up to the present at least four millions more than was actually required. They were surely, therefore, taking enough from the pet) pie in 'way of land and income tax. As a matter of fact, in some cases the combined land and income taxes and the special war tax amounted to 8s in the £. There were indeed cases where they amounted to over 10s in the £, and even to as much as 13s in the £. (Hear, Viear.) EXCESS PROFITS TAX. j The Minister then quoted some typical cases of great anomalies existing under the excess profits tax. One farmer with an assessable income of £6O, 000 paid nothing at ail under the tax; while another farmer with an assessable income of £;">o93 paid £2204 pre fits tax; and another with an increase of £I!H4 paid £.l«i> profits tax. Mr. Wilford; "It is the same with professional men."

A member: Why didn't he pay any tax?" Mr. Wilford: '<Eecause he made no «xtra profits." (Hear, hear.)

A business man with an assessable income of £398,000, said Sir Joseph Ward, paid no excess profits tax; another with an income of £92118 paid nothing; but a man with an assessable income of £2400 paid £B4O. A member: "You ought to have given it back." (Laughter.)

Sir Joseph Ward: "No, we can't givo anything back." (Laughter.)

A member: "What about the Gutter tax?"

Sir Joseph WaTd: "We haven't had :>< in the Treasury, which shows that is not a tax." (Hear, hear, and laughter). A professional man vitb. an income uf £1950, continued the Minister, paid nothing under the profits tax; one with £3H3O paid £707 tax, and one with £lOls paid £132. He thought that in view of such anomalies and in view of the Tax Commissicwr's report as to t;ie very probable poor yield of the tax every member would agree with him that He was wise to repeal the tax. (Hoar, hear). TAXATION OF MORTGAGES.

Dealing 'with the taxation of mortgages, Sir Joseph Ward said that when the Taxing Bill came down it would isontain proposals to give some relief to small men with mortgages. (Hear, hear.) On the general principle, he wanted to say that, objectionable as the idea might be of taxing a man on hij mortgage, when they came down to hard facts and they had got to produce a certain amount of revenue from the land—country lands and town lands on the same basis — they must have a mortgage tax. Up to now no hon. member on any side of the House had suggested any proposal that could take the place cf the tax on mortgages that wa3 not going to allow the whole of the land revenue of the country to slip away. (Her, hear.) He, would show them what had occuritd when the mortgage tax was abolished last year, and they would then see the need for that form of taxation being put on tlhe statute book. What he was going to state was legitimate, though it might be called "smart." arid Uvc Tax Department had tried to stop it but could not. A business firm towards the end of the financial year, having a mortgage to the bank over its premises to secure its overdraft, on the day before the end of the financial year increased its overdraft to such an e.\tent that when they deducted the mortgage interest from the the tax they ought to pay they had no taxation to pay whatever. Mr W. Nosworthy (Ashburton): '•That is a shirker's dodge. li, is not done by the farmers." ("Oh!" and laughter.) i Sir Joseph Ward said that it had been submitted to the law officers of the Crowa and proved to bo quite legal. There had been case 'n the country in which a man, who:, .o mortgage tax was in existence last year, had increased his mortgage in that short period to such an amount that he had no taxation to pay at all. A member: "What did he do with the money?" Sir Joseph Ward: He could lend it to the Government or to my frieud, the hon. member for Plalmerston North (Mr. D. Buick)." Mr. Buiek: "Hear, hear," and laughter. In tho interests of "settlement, more settlement, still more settlement," in the interests of the peoplo who were to go into the country and of soldier-settle-ment they must have a land tax. (Hear, hear.) But if they were going to have a system that allowed such leakages, if they 'were going to leave such a door open, it was what people could do with' the assistance of skilful lawyers—(shame)—to avoid paying the land tax that Parliament intended them to pay. (Hear, hear). '" Mr. rPavno: "Make the 'penalty imprisonment. That's the way to get over .the difficulty." (Hear, hear). Sir Joseph Ward: "But one of the great difficulties is to prove it; and you <;an't prevent a man mortgaging his land to invest the money in anything else." Sir Joseph Ward: "No, and that is the sort of thing we have to meet." , (Hear, hear.) His answer to those who proposed that inheritance tax should be increased was: Let us to see what we re--4wx& to d« in this country later on."