The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun TUESDAY, DECEMBER 21, 1943. PAY AS YOU GO

Auckland Star, Volume LXXIV, Issue 302, 21 December 1943, Page 2

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun TUESDAY, DECEMBER 21, 1943. PAY AS YOU GO

TT is a pity that the Minister in Charge of the Land and Income Tax Department cannot state his case for refusing to adopt the "pay as you go" principle of income tax collection without imputing unworthy motives to those who favour the system. In reply to Mr. Holland's advocacy Mr. Nordmeyer inferentially suggests that the support of the Leader of the Opposition was engendered by a desire to relieve the wealthy taxpayer of a year's taxation. That was a gratuitous aspersion upon both Mr. Holland and the bigger taxpayers, who have made no move to induce acceptance of the plan. The Minister has advanced some effective arguments in support of his attitude, and it is regrettable that he has descended from the high level which should characterise a debate on a matter of national interest. It is curious to read of his concern for the employer's difficulties in the increased burden of collecting income tax. The Government has at no time expressed sympathy with the employer's difficulties; it has demanded return after return, in duplicate and triplicate, the deduction of other taxes, before wages are paid, and has loaded upon the employer such a multiplicity of forms that in most offices the task of filling them in demands up to a third of the attention of the staff. No compunction has hitherto been shown in this direction, and suggestions which would lighten the load without decreasing efficiency have met with a blank rejection. Mr. Ndrdmeyer's concern for the employer seems therefore somewhat unconvincing and insincere. His rhetorical question concerning Mr. Holland's justification for asserting that the majority of taxpayers favour the proposal is fatuous. It does not require a referendum to indicate the current of opinion upon a principle in which issues of national importance are not at stake, but in which cross-sectional reaction is readily accessible. When Mr. Nordme3*er discusses the practical difficulties of the plan he is on sounder ground, and as political head of the Department concerned he is entitled to be heard upon its practical difficulties. He has indicated that men, staff accommodation and the necessary calculating machines are not available, and therefore the plan is beyond the range of practical politics. These are sound arguments, but they are not necessarily final, and what is suggested is that inquiry be made to see if the difficulties are insuperable. Any change inviting more work and staff is a double nightmare to the head of the Department, who some years ago, in commenting upon the suggestion that quarterly instalments be enforced, was compelled to report to Parliament that it could not be done without a one-third increase in the staff, and that neither the men nor the accommodation for them could be found. Since then the Department has moved to better quarters, but it is still understaffed and overcrowded. That, however, does not dispose of the argument. The adoption of the principle met with strong opposition in Canada, Britain and the United States, but in each case it was put in hand, and a thorough inquiry, Avhich the Minister has so far refused, might prove that later economies would more than make up for the heavy initial costs. Practical experience is now readily available from three sources, and it seems desirable that the general inquiry suggested as a first essential should be granted, especially as it is not suggested by Mr. Nordmeyer that the position has been faced in anything but a negative manner. There are clear advantages in the system, but inquiry may show that the disadvantages outweigh these. One of the advantages to the people is that the taxpayer is not called upon to pay large sums on an income spent a year before, that he has not the shadow of another year's tax looming over him as he painfully ■ collects enough to pay for the year that has -gone into history. The State has the advantage that the funds come in regularly instead of all in one quarter, and the further advantage that inflationary tendencies are checked. One of the drawbacks is the fact that the taxpayer's view of what he is paying to the State is very seriously obscured. He looks upon the contents of his pay envelope as his full wages, and fails to realise, as he does in the case of national and social security taxation, that the large sums he contributes to the State are part of his income. Protests against excessive taxation are thus unheard, because the regularity of the deduction tends to make it invisible. The Minister should welcome thi,s taxation while the victim is unconscious, instead of looking for obstacles to it. There is, in spite of his objections, a case for inquiry, even though conditions here may be widely different to those 'of the countries which have tried it. There are differences, of course, but none of them seem basic, and the . Department should be .adaptable enough to meet them if on inquiry the principle is sound. It has certainly proved very adaptable in its collection methods.