ABOUT TAXATION.

Taranaki Daily News, 15 November 1919, Page 5

ABOUT TAXATION.

THE GOVERNMENT'S POLICY. NO MORE LOANS FREE OF INCOME TAX. Waiuku, November 13. A statement of his policy in regard to taxation was made by the Prime Minister speaking at Waiuku to-night. Mr. Massey said that the taxing system urgently needed revising, but there had Ueen no possibility of dealing with it during the session tliat had. just come to an end. He said that in taxation we had departed from the principle that every man in the community should contribute to the taxing of the country in proportion to his ability to pay, and that this was especially so in oonnecion with the taxes on land. By the present system a man was very often taxed on moneys that he owed and the evil was accentuated in districts where the land was high-priced as in some part 9 of the, Auckland district, in Taranaki, and in parts of Canterbury. The graduated land tax had been intended to burst up large estates, but now with the increased values of land it applied to some comparatively ■small farmers who were heavily mortgaged. A remedy should be found for this, for such a state of things should not be allowed to continue. The taxes on land were first of all the ordinary land tax which had bwm increased by fifty per cent at the beginning of the war; then the farmers' income tax, which meant that every man on the land making more than £3OO per annum net contributed income tax .accordingly, and on top of these taxes there was graduated land tax whifh, as lie had said, applied to quite small men. Something more should be done with regard to the exemption of married men with families from income tax. This principle was already affirmed in the law, but the exemption was of very little Value. He referred also to the accumulated surpluses. These surpluses, lie said, were the result of heavv_taxation during the first four years of the war, and when the taxation was imposed it was intended that the surplus revenue should go towards paying the cost of the war. Local loans, however, had been successful, and there had been no diffieultv in raising them. The surpluses had been separated in consequence for later use, perhaps in case a loan might not be successful. These surpluses had mounted to over fifteen million sterling, and during last session the Covernment decided to use the money for purposes of soldier settlement and advances to soldiers. This proposal had been verv stronsly nnposed bv the Leader of the Opnosition (Sir Joseph Ward!. He insisted that the surpluses should be set a partus sinking funds. This would have meant that for the purpose of soldiers' land settlement we should have had to increase taxation, which was unthinkable, or make an attempt to raise another loan. The last loan had not been a grjat success. Tt had indicated that we had about reached the limit in local borrowing, and it was hardly possible to borrow in England at present. Mr. Massev concluded with the important announcement that after this there would be no more loans free of income tax and no more forced loans.