Taxation.

Press, Volume LX, Issue 18151, 14 August 1924, Page 8

Taxation.

Tii<* rather surprising rumour is current that thero will be moro opposition than anyone had "expected to the Government's proposals to reduce taxation. Everyone is well aware, of course, that the Labour Party, in accordance -with its theory that the population—we do hot use the word community here, because Labour's policy is a denial that there is anything that can accurately be called a community—that the population consists of two mutually antagonistic sections, those, with taxable incomes and those without, will oppose any reduction in the income tax. A considerable number of Liberals also may be expected to approach the question with the objeet of dividing with \ Labour what they think will be the credit of having refused to lessen tho burden borne by. those who "are able "to bear it." But it is rumoured that there may bo other opposition than this. The case for the reduction of taxation is admitted by nearly everybody outside the ranks of the labour Party—even by some of those who for political reasons deem it expedient to' oppose any lessening of the amount taken by the State from the pockets of the taxpayer. Indeed, it is almost everywhere received as an axiom that the object of government ought to be to keep the rates of taxation and the total amount levied at the lowest possible figure, since capital in private hands is much more fruitful than it can poßsibry-bo-in the hands of the State.

In the hands of the State capital is comparatively sterile. Where the State is employing its revenues in Tendering productive services such as private enterprise must render in order to continue its existei.ee, the services ought to pay for themselves. And where the revenue is not used for the rendering of productive services, it is obviously an abstraction from the publie's store of productive capital. On general grounds, therefore, the less a Government collects in taxation tho better it is for the community. In the case of New Zealand at the present time the taxation, although not so high as it became during the war, is still so high as to be a burden upon industrial and commercial development. Nobody expects that the pre-war standard of taxation shall be restored; the liabilities created by the war will long remain an effective obstacle to that. But tho extra burden now borne by the taxpayer? is much heavier than those liabilities require. Mr Massey recognises this, and has repeatedly declared his strong opinion that lower taxation is necessary to tho nation's recovery of its economic health. Taxation is always an evil, and high taxation a great evil. Sometimes it is a necessary evil, but to-day it is not ever, necessary. The only rational ground, so far as we have seen, upon which tho maintenance of the existing burden has been defended is that tukon by Mr F. J. Rolleston, who wishes the Government to provide substantial surpluses for the purpose of reducing the public debt. This, wo say, is a rational reason. It is not, that is to say, absurd in itself. But it is a very unsound reason, oil the same. For at the best the _ amount tho Government could extract .for the purpose of redeeming debt—apart from and in supplement of the oxisting arrangements for sinking funds—could not balance the current loan needs of the Dominion without crippling industry and production and bringing about, in a very short space of time, a very serious situation indeed.