The Auckland Star WITH WHICH AND INCORPORATED The Evening News, Morning News, The Echo and The Sun. TUESDAY, DECEMBER 1, 1936. TAXATION RISING.

Auckland Star, Volume LXVII, Issue 285, 1 December 1936, Page 6

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

TUESDAY, DECEMBER 1, 1936. TAXATION RISING.

For the cause that lacks assistance, For the icrong that needs resistance, For the future in the distance, And the good that ice can do.

Mr. Nasli in August estimated tliat Customs revenue for the financial year would amount to £9,100,000, the highest total in the history of the Dominion. ( There seems no reason to doubt that his estimate, which was £939,000 higher than the total receipts last year, will he realised and exceeded. In Auckland last month the Customs collections

were greater than m any one month since before 1930; in Wellington they broke all records; and at Lyttelton and Dunedin they were substantially greater than the receipts in November of last year. • Sales tax revenue, and the subsidiary streams from petrol a.ud beer duties also are flowing strongly. The sales tax, which the Government pledged itself to abolish, is expected to yield £2,900,000 to the Treasury this year. month, in Wellington alone, it yielded £105,912, and in Auckland £84,042. , It is difficult to imagine that the Government will voluntarily cut off so lucrative a source of revenue.

It is customary and right to regard increasing returns from Customs and other duties as good signs of returning prosperity. They should also be regarded from another angle. They are universal and inescapable taxes, paid not once a year, but every day of the year, and to them are attributable in large part the high and increasing cost of living. If the people are told that the Dominion is returning, or has returned, to the prosperity of, say, 1929-30, when Customs revenue was £8,897,046, they are entitled to point out that this year, in addition 'to Customs revenue of £9,100,000, they aie expected to pay £2,900,000 in sales tax. There was no sales tax in 1929-30. In direct taxation the contrast is no less striking- Land tax in 1929-30 yielded £1,506,911, income tax £3,533,764, and stamp and death duties £3,405,292 —a total of £8,445,967. This year from the same sources the Government expects £10,510,000. In addition there' was in 1929-30 no wages tax, which this year is expected to yield £4,616,711.

Reductions in taxation are not expected of Labour Governments —which is one of the reasons why Labour Governments usually have not lasted long —but New Zealand's Government has not hesitated to break precedents in other" fields, and it should consider breaking this one, If the steady accretions of tax revenue are regarded as so much extra money to spend, sum of Government expenditure must reach a level that will, if there should be a recurrence of."bad times," immediately become insupportable. This Government is in office partly as a consequence of the unpopularity of its predecessors, and that unpopularity was largely due to the reductions it was forced to make in the expenditure o? the State. If, on the other hand, "the Government regards the general increase in tax revenues as it properly should be regarded—as so much money extracted from the pockets of the people which need not have been extracted —it will reduce the rates of taxation. The certain result would be that the people would have more money to spend upon objects of their choice; the further probable result —as experience in Australia since the depression tends to show —would be that the Government itself would not have less money to spend, but more.