The Daily News. WEDNESDAY, AUGUST 23, 1922. TAXATION COMMITTEE’S PROPOSALS.

Taranaki Daily News, 23 August 1922, Page 4

The Daily News. WEDNESDAY, AUGUST 23, 1922. TAXATION COMMITTEE’S PROPOSALS.

The brief discussion which took place at the recent meeting of the New Plymouth Harbor Board, relative to the effect of certain recommendations made by the Taxation Committee, in the direction of abolishing the exemptions from taxes now enjoyed by local bodies and Government trading concerns, drew attention to the general principles governing equitable taxation. Like all other questions the proposal to place local bodies and the Government on the same basis as private companies is capable of being discussed from two points of view, although there is only a single fundamental principle involved, for no matter what may be the extent of taxation levied, so far as all trading concerns are affected, it is the public that eventually has to bear the burden—directly or indirectly. The only point in the proposals of the Committee that need be kept in view is whether, as a matter of principle, taxation should be general or partial. In theory, and partially in practice, taxation should be borne by the whole community according to the ability to pay. Getting down to bedrock, it would seem that while the question as to whether harbor boards and other local bodies should be exempt from the payment of land tax on their reserves may possibly be open to academical debate, yet as a matter of equity it admits of no logical contention, inasmuch as although these bodies are performing public services and there are no profits to be paid over to individuals, yet all the gains from endowments are so much relief to the community who would otherwise have to contribute by way of rates to maV up any deficit in working expen ses. Mr. Wilkinson went to the crux of the matter when he upheld the principle that all the community should be put on the same footing. In the case of reserves held by public bodies, the community practically makes a profit from the endowments, and it would seem only equitable that these profits and endowments should bear their fair share of taxation, even though it means increased taxation, for it is, only by spreading taxation over the whole community that its object is attained. To educe reasons why these bodies should not pay land and income taxes would be to argue in favor of a negative, while to contend that they should pay would be merely stating the obvious. The case of taxing fully the interest on debentures is on exactly the same footing. We may not like the process, but its soundness admits of no denial. It seems equally clear that the average rate lof tax paid by companies should be imposed upon all public bodies , yrpll as the Government in re-

spect of all trading concerns, but whether the levy should be based on a fixed percentage of the capital employed or on some other fair basis is open for discussion. It is certainly time that an intelligent effort should be made to remove the numerous anomalies that exist in relation to the present system of taxation, and it is quite possible that if v a thoroughly equitable system is evolved the community in general may have their burdens lightened instead of increased, always provided that the utmost possible economy in administration becomes the rule. At present public bodies and the Government, unlike private companies, can be as extravagant and wasteful as they please without having to pay the penalty for maladministration, but if the public finds it has to pay the piper it may have the effect of stimulating a much keener interest in affairs than is now exhibited. After all, the Government and public bodies are trustees for the people, and there appears no logical reason why in that capacity they should not carry the responsibilities imposed on private trustees. The Taxation Committee was evidently actuated by a businesslike spirit when formulating their proposals, and it is only right that their recommendations should receive a full and fair examination, not in the restricted sense of their bearing on harbor boards or other public bodies, but from a comprehensive national viewpoint. Present financial conditions render an equitable principle imperative, and although the public will have to pay—sooner or later—the question is one whether certain bodies and localities favored in the past should now be brought into line in order that the whole community be placed on the same footing.