EXCESSIVE TAXATION.

Auckland Star, Volume LIII, Issue 83, 10 April 1922, Page 4

EXCESSIVE TAXATION.

STRANGLING INDUSTRIAL ENTERPRISE. At the annual meeting of Kempthorne, Prosper and Co.'s New Zealand Drug Co., Ltd., Dunedin, the chairman of directors (Mr. A. Bathgate) said: "One of the most difficult problems that business men had to contend with at present was taxation, especially in regird to large companies' operations. The present heavy and crushing impost of taxation was an effectual bar to large dividends, and there was also a very much worse feature as affecting the general prosperity of this country, in so much that capital was being diverted into other channels of investment -rather than into new industrial concerns, which, in this young country, was certainly a retrograde movement." Mr. J. C. Stephens, in seconding the adoption of the report, said the chairman had referred to the excessive taxation in this country. He (Mr. Stephens) thought if the general public realised to what extent the cost of living was dependent on the amount of taxation, the call for reduction would be more insistent. A shareholder in an industrial concern expected a reasonable return on his capital invested therein. Let them say that 8 per cent was reasonable. In addition to that there must be adequate reserves and provision for losses, etc. But the money to pay the income tax had to be earned in addition (that was an expense of the business), and prices must be fixed accordingly, subject of course to the law of supply and demand. So long, therefore, as a concern was able to carry on, taxation had a direct effect upon the cost of living. Not only was this so. but it must act as a deterrent to the formation of new industries. The man who clamoured for higher and still higher taxation would probably not be so eager if he realised that he would have to help to pay it."