EXCESSIVE TAXATION.

Auckland Star, Volume LII, Issue 190, 11 August 1921, Page 4

EXCESSIVE TAXATION.

DISASTROUS EFFECT ON BUSINESS. LOANS ON MORTGAGE PENALISED. VIEWS OF A PROMIXEXT BUSINESS MAN. There is a widespread and rapidly growing feeling in the commercial community that the presenl excessive taxation in New Zealand will destroy commercial and industrial enterprise, and seriously interfere with the development of the cou»try. In the course of a conversation with Mr. H. E. Vailc, senior member of the firm of Samuel Vaile and Sons, Mr. Vailc incidentally mentioned that a business friend writing from Sydney had commented on the enormous taxation levied upon companies in Xew Zealand, and said: "It vould appear that the taxation authorities are the largest shareholders in your business. Taxation is bad enough here, but in a company like yours it would not exceed 4/6 in the pound." This led to a discussion of the effect of the income tax on business generally, and the reporter asked Mr. Vaile's opinion regarding the special pressure of the tax on-transactions in property.

Mr. Vaile: "The enormous rate of income tax practically precludes anyone from borrowing money on mortgage, as no one is jioing to lend at 6* per cent and present about half of the interest to the tax department. This will have a serious effect, as there will be no money to develop the country." With regard to the assessment of the tax on land transactions, Mr. Vaile added: "One of the latest methods is to try to prove that anyone who sells a property 13 'a dealer in land' within the meaning of the Act, and to tax his profit if any. In fact, the whole business community will soon be working for the Xew Zealand Government."

Reporter: Have you any other remark to make regarding the incidence of the income tax ?

Mr. Vaile: "One other point which might be mentioned is the iniquity of disallowing tax paid to be deducted from one's return, as this really means compound taxation. It would be .just as reasonable to disallow rates and insurance."

"Do you think there is much evasion?" the reporter queried. Mr. Vaile (most emphatically): "Yes. Tt must be admitted that theoretically income tax is the fairest tax if it can be properly applied, but as everyone knows —and none better than the Commissioner himself—there are thousands of people in New Zealand with large incomes who pay no taxation whatever, and thousands more who evade most of it. The higher the tax the more evasion, and the more evasion the higher the tax to make up the deficiency. Business people who keep proper books however, not only have the last penny screwed out of them, but are constantly worried for more by the Commissioner, whose rulings and powers are almost autocratic."

Reporter: You have ."I believe, always been a keen supporter of the Reform Government.

Mr. Vaile: "I have, but I believe their policy in regard to finance and trade sadly needs reformation. It appears to mc that New Zealand is no longer governed by Parliament, but by the Commissioner of Taxes, backed 'by politicians, not two per cent, of whom have any commercial experience. In fact, they look upon the business man much as the aristocracy of the Middle Ages looked upon the peasant—a class without rights, and quite useless; except as a means of raising money. And the taxes thus squeezed out are not used on reproductive public works, or fostering trade and industry, but maintaining an army of Civil Servants and Government hangers-on, who seem to imagine that the public business can be conducted in direct opposition to all the rules that govern every other business. Instead of encouraging and assisting the business man bhey hamper and obstruct him ■by means of clumsy legislation and silly war regulations, such as are endured by no other civilised country in the world to-day. But what Mr. Beauehamp or anybody else says will probably make no difference, and they will go on as at present until sheer lack of funds reminds them that they must come to their senses.''