A COMPARISON OF TAXATION.

Auckland Star, Volume LIII, Issue 72, 25 March 1922, Page 6

A COMPARISON OF TAXATION.

We have received from Mr. W. A. VeitcJi, M.P. for Wanganui, a series oi interesting tables that he has compiled showing the difference between New Zealand and Australian taxation, *nd setting out the increases in the revenue and expenditure of these two countries. Mr. Veitch says these figures—AA-e pre-

sume he refers especially to those on taxation —astonished him. We aTe not surprised. They ought to astonish anybody avlio looks into the sulbject. As a matter of fact they are not neAv, for this paper dicAv attention to theau some time ago, but we suspect they arc still neAv to most members of Parliament, especially those on the Reform side. We need make no apology for returning to so important a subject. Mr. Veitch's tables show that CommonAA'ealth and

State taxation combined rose from £4 13/9 in 191.1 to £13 0/7 in 1021. In 1913 Ncav Zealand taxation was higher than Australian by £5 2/3 per head, inchiding Maoris, and £5 7/2 for Europeans only. In 19115, in the middle of the AA-ar, the two figures Avere almost the same—£o 8/5 for Australia and £6 12/1 for New Zealand. Then our taxation spurted and simply sailed away from that of our neighbour. It was £11 3/9 (Europeans only) in 1918, £12 7/8 in 1919, £14 2/9 in 1920, and £18 11/1 in 1921—£18 11/1 against Australia's £13 0/7. We Avi.-h tlicsc two totals could be posted in conspicuous places in the precincts of Parliament, so that this striking proof of the over-taxation of New Zealand would constantly be before the eyes of meurbers. No serious attempt has ever ibeen made to explain why Australia has been alble to carry on-with so much less taxation per head; no one. would suggest that Australian (lovemir-i nt were models of thrift and wise administration. The Prime Minister seems to us to be unable to grasp the seriousness of this taxation level. He talks vague generalities, 'but he never gives tbe impression of really grappling witli his subject. Reform papers admonish him in A - ain. The "Otago Daily Times,"' for example, is unable to accept Mr. Massey's statement that taxation is "adjusting itself.'' On the contrary, it says, "the hi'gb rate of taxation is becoming more and more embarrassing as incomes and profits recede.' - It certainly is. for as Aye have repeatedly pointed out. the system of levy take; no account of the relation of capital to profit. A concern may have made £50,000 profit last year on a capita) so large that the percentage of profit i< not more than moderate. This year its protit may have receded to £25,000, which would i.ot 'be sufficient t.> pay a respectable dividend. It will, however, still have to pay income tax on the highest scale. Mr. Massey must understand that a fall in the volume of taxation is not sufficient. That comes from reduced profits. Taxation requires revision on h scientific basis. The present haphazard methods are purely of departmental concoction for the single object of raising revenue, and display no regard for the injury that may be done to industry and commerce, or the injustice inflicted on individuals. They need to be entirely scrapped.