EQUALITY IN TAXATION.

Auckland Star, Volume LXII, Issue 245, 16 October 1931, Page 6

EQUALITY IN TAXATION.

The Minister' for Finance, in explaining the reasons for the taxation proposals of the Government and the incidence of income tax, is reported to have said: "As a matter of principle and equity the true basis of taxation should be the capacity and ability of a man to pay according to his income." This is a sound principle of taxation which unfortunately has never obtained in this country, but "which we look to the National Government to enforce. Ih should apply not only to individuals, tut to corporations, and given the will to provide for its' application it should only remain to point out where the Government proposals fall short of achieving the desired object. There are at least two glaring anomalies, to effecting Mr. Stewart's expressed intention in the scheme that he puts forward; there are no doubt others. But for the moment let us confine our attention to the two points in question. An individual may draw an income of £10,000 per annum from. tax-free securities or shares taxed atthe source, but should he have no earned income, or other source of revenue, then he will pay no income tax. On the other hand, should he have an earned income of £2000 per annum, his rate' of taxation will be fixed by including this £10,000, and he will pay on the earned income the maximum rate, or 8/l£ in the pound on the amount 'of his earnings. There is no justice here. Again, the immense revenues of Power Boards, the activities of which are in direct competition with all concerns dealing' in electrical supplies, and gas companies paying the maximum tax, are exempt. This is not right. The reply o£ the Prime Minister on this point to a deputation that waited upon him "yesterday was wholly unsatisfactory. Power Boards have engaged not only in every class of' electrical trading , , but have even become landlords on a big scale. If to tax them, is, as Mr. Forbes suggests, to bring about a. state of affairs under which the public generally will get cheaper electricity, then the sooner the tax is imposed the better.. There is no sound ease for their exemption. If the statements of the-Minister of Finance are to be.accepted on their face value, these failures to distribute the- burden of income tax according to the principles that he enunciates are omissions, and will be rectified before the taxation proposals are finalised. If they are not put into practice, the public will be in a position to judge the degree of sincerity behind the assertion that "the basis of taxation should be the capacity and ability of a man to pay according to his income.* .