TOO HEAVILY TAXED?

Auckland Star, Volume LVIII, Issue 195, 19 August 1927, Page 8

TOO HEAVILY TAXED?

FINANCE MINISTER DUBIOUS. CANNOT FIND THE CLASS. RESPECTIVE MERITS OF TAXES. (By Telegraph.—Parliamentary Reporter.) AN ELLIXGTOX, Thursday.

Observing that lie had been partictilaiiv struck by the curious contrast between the criticism of taxation in the House and the criticism which came from outside, the Minister of Finance, the Hon. W. Downie Stewart, concluded his speech to-night by making fcoiue interesting references to taxation gcneTally, and more especially in its relation to primary producers. Criticism from outside, said the Minister, seemed to centre round the fact that there had been no reduction in direct taxation, while that voiced by members of the House was (with tho exception of that from Mr. A Harris, Waiteniata, who advocated a reduction in direct taxation) that there should be a reduction in expenditure, so that the revenue might be curtailed. Very few critics in the House had gone to the trouble of showing where a curtailment of expenditure might take place, and only two of the New Zealand newspapers had bothered to mention items in the same connection. Mr. D. Jones (liliesmere) had certainly made an interesting contribution when he suggested that the two State farms which were not paying might be sold. Customs Duties. When members said taxpayers were too heavily burdened, he (the Minister) could not help being puzzled, in looking over various classes of taxpayers, as to which were so heavily taxed that a reduction would be warranted. If they thought Customs taxation was high because Customs revenue was high it would be a simple matter to increase the duties so that there would be fewer imports, and to raise the amount of taxation per head. This was the position in Australia, where there were higher all-round Customs duties, but the imports were increasing so enormously that Customs taxation showed no more per capita than did that of New Zealand. Should the tariff wall be lowered by 5 or 10 per cent it would be found that revenue would go up per capita. The Land Tax. Dealing with the land tax, M«\ Stewart said he had been trying to ascertain which class of the community was overtaxed, and whether it would be better to make a reduction in their taxation rather than to maintain the present revenue and repay the Public Debt. The position seemed to be that the men at the top of tho scale, who were big farmers, were paving very heavily, while those at the bottom of the scale were small men who escaped very lightly, although they had to pay heavily on local rates. Mi". W. E. Parry: Practically all the average small farmer is paying is local rates. . j Mr. Stewart agreed that some paid very heavily, and instanced the case of a man who found that 67 per cent of his profits were absorbed. Of rural landowners, 59,839 out of 85,000 paid no land tax at all. The Minister quoted figures from a tabl& to show that the vast bulk of the land tax was collected from the highest grades of fanners. Some 59,000 paid neither land nor income tax Without wishing to minimise the difficulties of the farmers it must be taken into account that some fanners in the higher scale paid up to 5 per cent of the value of their land in taxation. The matter would come up again when the annual Taxation Bill came down. Not in Favour of Wealthy. It was unfair to say that income.tax was all in favour of the wealthy, continued Mr. Stewart. For instance, a man with an income of £2000 paid not twice, but three times the amount which the man with £1000 had to pay, while the man receiving £10,000 did not pay ten times as much, but 50 times. Mr. J. A. Lee (Auckland East): He should, too! (Laughter.) The Minister said he had had plenty of evidence of the effect of the land tax in bad times, and he knew that small farmers as a rule preferred the land tax, while big farmers desired the income v rather than the land y Mr. W. D. Lysnar (Gisborne): Income tax would be better in normal times. "I think the bulk of farmers prefer land tax," said the Minister. Of course, most parties would agree that land tax had a certain moral value in that it prevented aggregation. Company Taxation. As far as company taxation was concerned, the Minister knew there was great weight of authority in favour of altering the system in favour of an individual tax. While he would not go into that in the present debate, he had no desire to close down on it without consideration, and an opportunity would come when the Taxation BUI came forward. He could only say, in conclusion, that in these unsatisfactory times he could not see an opportunity of reducing taxation owing to the loss of revenue which such a reduction would involve.