The Auckland Star. WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. WEDNESDAY, APRIL 27, 1932. TAXATION LIMITS.

Auckland Star, Volume LXIII, Issue 98, 27 April 1932, Page 6

The Auckland Star. WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun.

WEDNESDAY, APRIL 27, 1932. TAXATION LIMITS.

For the cause that lacks assistance, For the wrong that needs tesistand, For the future in the distance, And the good that vie can do.

The probability of an attempt by the Government to raise more money through income tax is foreshadowed by our Parliamentary reporter. It is a certainty, he reports, that last year's income tax returns will show a heavy decline on those for 1930-31, and in order to ensure approximately the same yield in tax an all-round increase in the rates will be needed, "to say nothing of a further lowering of the statutory exemption and the possible dclibcralisation of other exemption items." This is indeed a cheerful prospect. Surely no one in official circles is surprised that the income tax yield has slumped badly; that the country lacked the necessary income has long been plain. And if the Government thinks it can balance matters by increasing the rates and lowering or abolishing exemptions it is making a profound mistake. It cannot raise more money by this form of taxation, for the simple reason that the money is not there. If it tries to squeeze the taxpayer still more—we are speaking generally; there may be small categories that do not pay enough—it will kill him, and in the process it will kill business and industry. Companies now pay up to six shillings in the pound on their profits, a heavy burden when profits —if they exist at all—are so low. It leaves little or nothing for expansion of business, and l-estricts employment. No country in the world imposes such a tax on industry, and to increase it would be simply intolerable.

If the Government must find additional taxation, let it look elsewhere. There is the sales tax to be explored. There is an increase in the tax on sugai*, which could be most easily collected, and would be spread over the whole community, the rich paying more than the poor. If it is considered that this would raise the cost of living it could be set off by a lowering of the wheat duties, resulting in cheaper bread. But the larger question is again raised whether the Government is not going too far in its policy of deflation, its combined lowering of wages and raising of taxation —whether it is not trying to do too much in too short a period. At any rate, it should not leave the country in doubt about taxation. Parliament should not rise until the full taxation proposals for the year have been finalised. It is not fair either to individuals or corporations to hold them in suspense about their liabilities.