MEN AND MACHINES

Wairarapa Times-Age, 29 May 1940, Page 6

MEN AND MACHINES

LABOUR DIFFERENTIAL TAX. UNITED STATES PROPOSAL. “To balance men and machines” is the purpose Senator Joseph C. O’Mahoney,' of Wyoming, announces for a bill sponsored by him in the United States Senate to place a “labour differential tax” on all products. This would be a tax on gross income less the disbursements for wages and materials, and is described as levying upon employers who make “more than average” use of machines while benefiting those who use “more than average” manpower. The proposition evokes, of course, a rehearsal of all the familiar arguments about men being displaced by machines, notes the Christian Science Monitor. That the spur of progress in this respect is uncomfortable, there is no doubt. But the plain record of history is that labour-saving processes have in the long run made more jobs than they have removed, and that standards of living for those employed at the new jobs are higher than before because machine-made products arc cheaper. Mechanisation does, it is true, involve a retraining period or problem of new replacement for workers. But modern industry seems disposed to work out its human problems as well as its production problems in moves of this sort. Manufacturers do pay property taxes on machines, which must be taken into account in calculating whether machine production will pay in comparison with hand production. Intelligent management and intelligent labour leadership can solve these problems much better than can any added income tax. It may be that the employment-deterring effect of pay roll taxes for social security, as compared with some other kinds of taxes, should be re-appraised. But excess profits taxes and other special kinds of business taxes have proved unbelievably complex and deceptive. The United States income tax system needs simplification rather than further complication.