EXCESSIVE TAXATION.

Taranaki Daily News, 24 August 1921, Page 7

EXCESSIVE TAXATION.

ITS DISASTROUS EFFECT. INDUSTRIAL AND COMMERCIAL ENTERPRISE HANDICAPPED. Auckland, August 19. There is a widespread and rapidlygrowing feeling in the commercial community of Auckland that the excessive taxation at present imposed in New Zealand wk* have the effect of destroying industrial and commercial enterprise, and thus seriously interfere with the development of the country. Indeed, it is held that the disastrous effect of the heavy burden of taxation placed upon various sections of the community is already making iteelf manifest.

In the course of a conversation with Mr. H. E. Vaile, senior member of a well-known Auckland commercial firm, it was incidentallv mentioned to a pressman that a business friend, writing from Sydney, had commented on the enormous taxation levied upon companies in New Zealand, and aaid: “It would appear that the taxation authorities are the largest shareholders in your business. Taxation is bad enough here, but in a company like yours it would not exceed 4s fid in the pound.”

This led to a discussion of the effect of the income tax of business generally, and the reporter asked Mr. Vaile’s opinion regarding the special pressure of the tax on transactions in property. THE BURDEN OU TAXATION.

Mr. Vaile: “The enormous rate of income tax practically precludes anyone from borrowing money on mortgage, as no one is going to lend at 61 per cent, and present about half of the interest to the tax department. This will have a serious effect, as there will be no money to develop the country.” With regard to the assessment of the tax on land transactions. Mr. Vaile add ed: “One of the latest methods is to try to prove that anyone who sells a property is ‘a dealer in land’ within the i meaning of the Act, and to tax his profit, if any. .Tn fact, the whole business community will soon be working for the New Zealand Government.”

Reporter: Have you any other remark to make regarding the incidence of the income tax?

Mr. Vaile; “One other point which might be mentioned is the iniquity of disallowing tax paid to be deducted from one’s return, as this really mean? compound taxation. It would be just as reasonable to disallow rates and insurance.”

“Do you think there is much evasion?” the reporter queried. Mr. Vaile (most emphatically): “Yps. It must be admitted that theoretically income tax is the fairest tax if it can be properly applied, but as everyone knows—and, I venture to say, none better than the Commissioner himself—there are thousands of people in New Zealand with large incomes who pay no taxation whatever, and thousand? more, who evade most of it. The higher the tax the more evasion, and the more evasion the higher the tax to make up the deficiency. Business people who keep proper books, however, not only have the last penny screwed out of them, bur are constantly worried for more by the Commissioner, whose rulings and powers are almost autocratic.”

THE REFORM POLICY NEEDS REFORMING.

Reporter: You have, I believe, always been a keen supporter of the Reform Government?

Mr. Vaile: “I have, but I believe their policy in regard to finance and trade sadly needs reformation. It appears to me that New Zealand is no longer governed by Parliament, but by the Commissioner of Taxes, backed by politicians. not two per cent, of whom have any commercial experience. In fact, they look upon the business man mutfh as the aristocracy of the Middle Ages looked upon the peasant —a class without rights, and quite useless except as a means of raising money. And the taxes thus squeezed out are not, used on reproductive public works, or fostering trade and industry, but maintaining an army of Civil Servants and Govern ment hangers-on, who seem to imagine that the public business can be conducted in direct opposition to all. the rules that govern every other business. “Insteau of encouraging and assisting the business man they hamper and obstruct him by means of clumsy legislation and silly war regulations, such ns are endured by no other civilised country in the world to-day. But what Mr. Harold Beauchamp (president of the board of rectors of the Bank of New Zealand) or anybody else says probably make no difference, and they will go on as at present until sheer lack of funds reminds them that they must come to their senses.”