CORRESPONDENCE.

Taranaki Daily News, 1 June 1922, Page 2

CORRESPONDENCE.

THE BURDEN OF TAXATION. (To the Editor.) . Sir,—ln his recent speech at Feilding the Prime Minister, while deploring the necessity for a heavy income tax in New Zealand, offered the bearers of the burden the somewhat cold comfort of an assurance that if they were living in Australia they would be paying a still higher rate. This was not necessarily correct. Much would depend upon the State they selected for their place of residence, and Mr. Massey consigned them all to Queensland, which did not quite fit in with his contention. There are two income taxes levied in Australia, one by the Commonwealth and one by the State, and they vary in aunount. The tax (Commonwealth and State combined) is lowest in Victoria and highest in Western Australia, and the charges in these States upon taxable incomes derived from personal exertion may be compared with the charges in New Zealand upon the same basis at a percentage rate :

It will be seen, that the New Zealand rates are substantially higher than the Victorian rates, and that In the higher graduations they approximate not very distantly to the West Australian rates.

Another comparison, including all the Australian States, may be made Dy taking the totals of the amounts paid on the six incomes specified above, which, by the way, are the incomes employed by Mr. Massey in his illustration. Placing New Zealand and the Australian States in the order of merit, as the taxpayers would regard them, Victoria comes first with £4632, and is followed by South Australia £5798, New South Wales £6OOl, Queensland £65’82, New Zealand £65*98, and Western Australia £7522. The figures do not place the Dominion in any very enviable light, and look at them as I will, I cannot see how they are to be made to bear out Mr. Massey's contention in its en-

In the matter of company taxation, the figures are all against New Zealand. Taking again the States of Victoria and Western Australia for comparison with New Zealand, we have the following results: —

The totals of company tax payments on the six incomes, compared as in the instance of individual incoone, show Victoria with the lowest payment, £3739, followed by South Australia £5lOB, Queensland £5552, New South Wales £5552, Western Australia ££6372, and New Zealand £6822. The significance of these figures scarcely needs emphasising. They show, first of all, that the considered opinion of the five Australian States is diametrically opposed to the unjust and arbitrary system of taxation enforced in "this country with the object of relieving the taxing department of some of the trouble of assessment and collection, and with the result of gravely crippling industry and commerce. They also explain why the Australian companies are so unuch better able during the Ittejsent crisis to help the producer and give good service to the public at large than are the New Zealand companies. The company here that makes a profit of 5 per cent, upon a capital of £200,000 is at once pounced upon by the tax gatherer and compelled to hand over one-half of its year’s earnings, in Victoria, including both Commonwealth and State taxation, its payment would be, only £ 1633, and in Queensland, . often quoted as the rapacious State of the Commonwealth in this respect, it would be left with threefourths of its scanty earnings, available for distribution among its shareholders or for any other purpose It anight determine upon. Of course all this has been said beforp, but the time seems opportune for its reiteration, and Mr. Massey has provided me with an excuse for trespassing upon the hospitality of your correspondence columns.—l am, TAXPAYER.

West New Income. - Victoria. Australia. Zealand. £ per cent. per cent. per cent. 500 5.4 C.O 5.8 1,000 7.2 8.3 8.1 2,000 10.7 13.8 12.6 3,000 13.3 19.3 17.7 5,000 18.3 30.5 27.8 10,000 30.2 50.2 43.1

West New Income. Victoria. Australia. Zealand. £ percent. percent. percent. 500 18.3 15.8 5.8 1,000 18.3 16.8 8.1 2.000 18.3 19.7 12.6 3,000 18.3 23.G 17.7 5,000 18.3 28.4 27.8 10,000 18.3 36.3 43.1