TAXING FARMERS.

Taranaki Daily News, 19 March 1921, Page 8

TAXING FARMERS.

PLIGHT OF WOOL PRODUCERS. “SYSTEM MUST BE ADJUSTED.” The effect of the incidence of taxation on the present depression was made the subject of comment by a high commercial authority in the course of an interview with a Dominion reporter. “As far as the wool producer is concerned,” he remarked, “he is now saddledzwith the effects of Ipw prices, and he has to cut down his expenses. He can cut down his regular expenses, but there are two items which are causing him grave concern. One is that the interest on his loans has gone up and the other is his taxation.

“The Government will have to adjust its taxation, especially the income tax. Everyone will admit that the backbone of this country is the farming community. Now. the farming industry is supported and served by a number of large companies in the shape of the stock and ’Station agents, co-operative companies and freezing companies; and further the farmers have depended in the past, for the money they have to borrow on rportgage largely on investment concerns, such as fire insurance companies and concerns of that sort. Now, all these concerns are up against practically 10s in the £ income tax, and thay have gofc to pass that on to their customers The stock and statiqn agents, co-opera-tive companies, and financial institutions that lend to farmers have got to get a higher rate of interest or else they cannot lend. They can buy taxfree war loan stock at a price to-day that will return them 6J per cent, net, but to get 6A per cent, net bn a loan to a farmer, on which they have to pay income tax, means that they have got t 6 charge the farmer about 12 per cent. Even then.

no one would say that the farmer’s security was as good as that which they would hold on an investment in war loan stock.

“The trading part of the companies’ concerns, when they pay 10s in the £ income tax, has to get a bigger volume of profit from its farmer customers. The freezing companies, too, in order to .pay taxes have to make a. bigger charge. The taxation paid bymjig companies in New Zealand is the highest in the British Empire, if not in the world. In every other part of the Empire the tax is on the individual and graduated in proportion to his means. That is, the wealthy man pays the high graduated rate and the smaller and moderate investor pays a smaller rate in proportion to his means. In this country, the small investor in a company is taxed as if *he is a millionaire. I do* not think there is any other country in the world that adopts this system ’*