“Taxes Increase Costs Of Production, Living

Press, Volume XCVIII, Issue 28983, 26 August 1959, Page 11

“Taxes Increase Costs Of Production, Living

It is probable that most of the company tax and social security tax paid by companies is recouped out of the prices they charge their customers. “Looked at in this way, the conclusion is inescapable that at least half, probably nearly three-quarters, of present taxes are indirect; they are passed on in higher prices, and serve to swell the cost of production and the cost of living.” This is quoted from an article on the Canterbury Chamber of Commerce from 1859 to 1959 by Professor A. H. Tocker, written for the chamber’s economic bulletin.

“It follows that a very large part of the benefits conferred by governments in the welfare state have to be. and are, paid directly or indirectly by the very people who are supposed to benefit from

them. But the beneficiaries see the glamour of cash receipts and supposed free gifts, and do not realise what they pay for them in taxes and tax inflated prices for what they buy“The net result generally boils down to the story told by a popular American cartoon, in which a candidate is shown giving an address. The caption reads: ‘I invite you all to a duck dinner. Your bring the duck.’ Tax Collectors “Such matters concern the chamber closely. For the chamber represents the business community and it is business, in its widest sense, that pays the taxes, and has to collect them from its customers, since it has normally no other source of current revenue. . . Businesses pay, and collect from their customers, practically all the customs duties, beer duties, sales taxes, duties on instruments, and large parts of the income tax and social security taxes. Of the total State taxation collected (£286.1 million for 1958-59) it seems probable that business will have to collect about £2OO million, or 70 per cent. All of this must come from their customers and employees, and the greater part through prices swollen by the demands of the tax collector. “This burden raises costs of living and, more important, costs of production, and brings closer the point where we may price ourselves out of our markets abroad. New Zealand exports and imports much more heavily than most countries, and must trade in competition with them. It is therefore essential that her costs and prices should be competitive,” Professor Tocker says-