TAX INCREASES.

Auckland Star, Volume LXX, Issue 192, 16 August 1939, Page 11

TAX INCREASES.

COMPANY DIVIDENDS.

EXEMPTION CRITICISED.

views of dr. McMillan. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. Supporting the Budget taxation increases in respect to income tax and death duties. Dr. D. (.!. McMillan (Government, Dunedin West) said in the House of Representatives yesterday that there had been Opposition criticism to the increase in death duties on account of the heavy penalty they would impose on widows. He reminded the House that widows paid p*> more than 1/ in the £ 011 estates , ilued up to £-">OOO. A review of the estates on which death duties were paid would -show that 1 per cent of the people owned 32 per cent of the wealth. That might be expected in England, but not in New Zealand. It made one realise the urgent need for an increase in death duties.

Referring to income tax, Dr. McMillan said there was every reason why increases shouH be made 011 the higher incomes. As far as taxation on dividends was concerned, he was of the opinion that those receiving the dividends should pay tax on them. To-day they were exempted.

Mr. S. (;. Holland (National, Christchurch North) : It is deducted before tiiev receive it.

Dr. McMillan said that that was right theoretically, but in reality the tax was passed on to the purchasers of the products of companies, and in the end the community paid. The ordinary shareholder to-day took no part in the affairs of the companies in which he held stock, but if he derived £2(1.00(1 a year from the shares the income did not pay taxation.

The Leader of the Opposition, Mr. Hamilton: Why not take it off the companies and put it on the individuals?

Dr. McMillan replied that the purchasers of the commodities would still lie called upon to pay, as the price of the {roods would not be lowered.

The taxation to be imposed 011 small farmers was also supported by Dr. McMillan, who quoted the case of a dairy farmer, the unimproved value of whose land last year was under £3000. His income was between £1200 and £1500.

Mr. W. .T. Poison (Xational. Strat ford) : There are some like that.

Mr. Hamilton: About 10 per cent of the total.

Dr. McMillan: T mn sure they will be lad to pay their share.

"T think we coul'l follow Germanv wiMi advantage and have a more ri;;id control ■>f prices,'" sa ! d Dr. D. fi. McMillan (Government. Dunedm We<t) in t'n> House of Representatives y?«t "rd;: v. "If commodities are scarce in the Dnninion that i* not a sufficient ronton to put up the price." he added. He advocated tho introduction of a "just" price with no increase when there was a shortage of the goods. By such a system there wouid be no danger of the real value of wa«es decreasing. It would make for better control of tha country's economic system.