NO SOLUTION

Waikato Times, Volume 127, Issue 21187, 9 August 1940, Page 6

NO SOLUTION

TAX ON CAPITAL “CONSCRIPTION OF WEALTH” ONLY THREE METHODS “No known method of conscripting wealth will take more from the wealthy than the method of taxation as it is now being applied,” says the Hon. Walter Nash, Minister of Finance, in a specially written article in the current issue of the Standard. “Some people are apparently of the opinion that the Government is failing to give full effect to its ‘all in’ policy, insofar as the conscription of wealth is concerned,” states Mr Nash. “There is an unfortunate tendency to use the term “conscription of

wealth” in a very loose manner without any attempt to consider just what it involves. “Capital cannot be conscripted for the purpose of meeting current war expenses. Even if production in the Dominion is maintained to the maximum, the reduction of imports means that only to the extent that \ the ordinary current consumption of the community is reduced can the resources available for war be augmented. “There are three ways, and only three ways, in which this reduction can be brought about, by rationing (including import restrictions), by taxation, and by savings out of current income. No Release of Resources “It follows, therefore, that, whatever other advantages may be claimed for such a policy, the conscription of past accumulations of capital will not solve in any way the problem of financing current war costs. It will not release for war purposes any more men or materials or industrial resources than are already so engaged. Nor will it in any way lessen the economic burden of war as reflected in the lower consumption standards which the community as a whole will still have to beaf. “It is recognised that a strong case can be made for a capital tax of some description, but it must also be recognised that to serve its maximum useful purpose such a tax would have to be met out of current income. Our institutions at the present time are more valuable than property, but property as well as institutions is being defended by the men at the front, and property should pay for the protection of property. In the meantime, the only criterion by which all policy must be determined is the development of the maximum possible war effort.”