TAKEN TO TASK.

Auckland Star, Volume LXIX, Issue 101, 2 May 1938, Page 11

TAKEN TO TASK.

TAXATION COMPARISONS.

ECONOMIST'S FIGURES.

"Mr. Colin Clark, M.A., has replied through the Press to our public statement wherein we questioned the accuracy of the statement made by him that the proportion of tho national income taken bv taxation in New Zealand is among the lowest in the world," says a statement by the Associated Chambers of Commerce of Xew Zealand. "Mr. Clark, in his original statement, said that 'taxation in New Zealand took 18 per cent of the national income, , and he quoted comparative figures as relating to eleven of the principal countries of the world, showing New Zealand to be in a highly favourable position," the statement continues. "Mr. Clark now makes the surprising admission that he was speaking of the year 1933-34. That is four financial years ago. The taxpayers are much more concerned with the position as it exists to-day. On Same Basis? "Mr. Clark attempts, in his reply, to bring his figures up to date in the case of New Zealand, by stating that taxation in this country, as a percentage of national income, was 'about , 18.4 per cent in 1930-37, and 'will probably be below 18 per cent in 19.'?7-3S.' "As to Mr. Clark's method of arriving at a figure for New Zealand's national income, as far as he has explained it, it appears that, whore he found no satistics available, he used unsupported guesswork. Intelligent estimating, subject to tests, is understandable, but Mr. Clark chose, for instance, to assume that there is a large-scale tax evasion in New Zealand, and he made a broad guese of £5,000,000 as the amount of income represented by that evasion (if it exists). "Then there is Mr. Clark's blatant error, in his original statement, that 'heavy increases in taxation revenue (in New Zealand) in recent years were eimplydue to increasing national income., Mr. Clark quite overlooked the fact that the New Zealand Government, under the 1930 Budget, increased income tax rates on individuals and companies, and imposed a graduated tax on land. Another Economist's View. "The only further comment we would make is to quote Sir Josiah Stamp (the eminent British economist who -was recently in New Zealand), who says that 'it is a good estimate (of national income) which can claim to have a possible error of less than 10 per cent.' This is an appreciable margin; an error of 10 per cent in Mr. Clark's named estimate of New Zealand's national income would make a difference of £20,000.000. We are much more inclined to reply on the officially published, tangible and indisputable figures of taxation per head of population, which show New Zealand to be more highly taxed than either the United Kingdom or Australia, at least," the statement concludes.