DIRECT LEVY ON WEALTH

Taranaki Daily News, 18 October 1921, Page 4

DIRECT LEVY ON WEALTH

There seems to be- an irresistible attraction for some people to regard a levy on wealth as the means for meeting financial troubles. It is -so easy to advocate, provided the con-sequences are ignored, hence now and again the plea for its adoption is raised. The member for Avon (Mr. Sullivan) recently advocated in the House a levy of ten per cent, on the wealth of the Dominion, which, he estimated, would produce one hundred and ten millions sterling wherewith to pay off the war debt. No doubt he was sincere in making such a proposal, but he evidently cannot realise either the difficulties or the mischievous nature of such a scheme, especially at a time like the present, when the conservation and judicious use of capital is of vital importance. All taxation is a species of levy on wealth, the proper functions of wealth being to assist in the process of production, and to keep industries employed. To speak of making a levy on wealth in the abstract is meaningless, except in the sense that all capital shall be placed under contribution as well as the income resulting from the investments of capital. That would be not only perpetrating an injustice, but would paralyse industry, trade, commerce and banking. A legitimate and proper method of taking toll on wealth is by the operation of .a graduated scale of death duties, and in this direction the Dominion Government has been too lenient in the past. Tn view of the growth of the national debt to such large proportions, it is obvious that the Government will have to face the question of abstaining from further borrowing, as well as of reducing the debt. At present there is a greater need than ever before to stiumlate the circulation of money in the Dominion, but when times are more favorable it will be tha. duty of the Government to evolve a practical scheme whereby the burden of debt will be lightened. Had the excess profits made in war time been taxed on a sufficiently high basis the financial position of the Dominion would to-day have been far more satisfactory than it is. The following table shows the record of estates valued at over £lO,OOO which were certified for duty during the war years:—

Here we have ■ indubitable proof of the existence of increased wealth during the war which has not been subjected to increased taxation, while practically every other form of taxation has been substantially raised. The opportunity waalost, and to resort now to a levy on capital would lead to disaster the extent of which few people realise.

Number of Aggregate Average Year. Estates. Value. Value. £ £ 1916 ... 150 3,845,944 25,639 1917 ... 179 5.007,068 27,972 1918 201 5,880,379 29,255 1919 ... 217 6,871,408 31,666