TAX-REVISION PITFALLS

Evening Post, Volume CXXI, Issue 68, 20 March 1936, Page 8

TAX-REVISION PITFALLS

The New Zealand taxation system is called a system for convenience of reference. Actually there is little that is systematic about it., We can endorse without hesitation, therefore, the Prime Minister's plea to the New Zealand Land Values League, that "they had such complicated things to do that their task would puzzle a Philadelphia lawyer, to say nothing of a Wellington lawyer." The complexity of the problem is further shown by one statement of the Minister of Finance. "Before the Government could throw off one form of taxation, it would have to see that the revenue that was necessary to run the country was available from other sources." This really sums up the Government's difficulty. Any revision of taxation it may propose must be in the form of a transfer of burdens from one class of taxpayer to another. There is little prospect at present, with the1 Government's commitments, of making a reduction in one tax without a compensating increase in another tax. This being so, the question at once arises: Can the increase be imposed without undue disturbance of industry or commerce? Justice may demand that a certain tax should be lighter on one man and heavier on another; but the man who is to bear the heavier burden may point out that he himself has claims for relief. For example, the big city businesses which are said to be escaping taxation in one form arc subject to very heavy imposts in another way —through the income-tax law which treats companies as individuals and taxes banks upon an arbitrary assessment. The revision that is necessary cannot be undertaken in a one-sided way, and unless the Government has' revenue to spare the many-sided task may be beyond its capacity. Revision without reduction is difficult at any lime, and doubly difficult when the temporary taxes imposed by an old Government arc disapproved by the new Government in principle, but tolerated as a necessary evil, because the revenue is . necessary though the method of securing it is evil.