The Dominion WEDNESDAY, SEPTEMBER 22, 1920. THE KEY TO TAXING PROBLEMS

Dominion, Volume 13, Issue 308, 22 September 1920, Page 6

The Dominion WEDNESDAY, SEPTEMBER 22, 1920. THE KEY TO TAXING PROBLEMS

The rcccption given to its latest Taxing Bill ought to convince the Government that in spite of the admirable features the measure possesses, it will, as a whole, bear icvision. It is generally agreed that tho appreciable relief given to the family man as compared with the. single taxpayer is a in the right direction. In view of the country's need of population, as well as from the standpoint of simple justice. it is evidently advisable to limit as far as possible the handicap imposed on parents ot families, and in this aspect' of its taxing policy the Government has shown itself fully alive to popular needs and well abreast of the times. Although it has been freely criticised, the proposal to tax the income of | local body trading enterprises -is also equitable and soundly progressive in character. Other considerations apart, this innovation will ; establish a fair basis—at present non-existent —on which to estimate the efficiency and results of municipal as compared with private enterprise. Our present purpose, however, is not to go into those- or other debateable details, but to urge that the Government would show sound judgment and take tho right course if it agreed to postpone its taxing legislation for a few months, and set up a Royal Commission to inquire into the whole incidence of taxation and formulate the basis of an equitable adjustment. The idea of instituting an inquiry on these lines was entertained by the Prime Minister somo time ago, and the merits of the ease, apart from the representations that are being made on the subject, ought to satisfy him that he would be wise to carry out his former purpose. Tt is, of course, the incidence and not the volume of taxation that is in question. In view "of present and prospective revenue requirements, it is evident that heavy taxation is inevitable; not only at present and in the immediate future, but for some years at least to come, The outlook in this respect supplies one of the strongest arguments for reviewing and so adjusting the incidence of taxation that it will interfere as little as possible with productive industry and enterprise. It would be inexcusably rash and shortsighted to assume that simply because a big revenue is necessary it must be raised by. the readiest and most obvious methods, without any attempt to distribute burdens equitably, and regardless of the ultimate consequences. The idea of methodically reviewing tho incidence of taxation spccislly commends itself at this time, partly for the reason that with taxation at its present level the illeffects oi errors 'in adjustment are magnified, but still more because the initifrests of the \vhole population imperatively demand that free play should be given t.o develop-, mcnt and business arid industrial enterprise. In its most essential aspcct, the case for such a review does not rest upon regard or concern for the interests of any par-

ticular class, nor even upon the manifest justice of removing the unfair burdens now imposed upon some sections of the community, including many company shareholders and other people of limited meaiiH. It is the strongest point of all that an ill-devised and anomalous system of taxation, by. hampering and penalising legitimate enterprise, militates seriously against the interests of tho whole population. The future prosperity of the Dominion largely depends upon this fact, being duly weighed and taken into account. In many directions- thcr# is great and promising scope for development and the extension of productive enterprise, and if opportunities of this kind are turned wisely to account much will he done to ensure rapid headway in social progress and betterment, If the' Dominion is to profit by its opportunities, however, it must make the most of its human and

material resources, and taxation i* one of tjie factors which will potently influence the outcome. Taxation which imposes needless handicaps on useful enterprise would not of necessity; bring tho country to disaster, but it would tend undoubtedly to substitute stagnation for prosperous expansion and to introduce bad times for the whole toommunity. Apart from such sound criticism _ as has b«en levelled against existing and proposed methods of taxation, the Government and Parliament ought to be more than willing, in the interests of continued progress and prosperity, to ftreiituto tho proposed inquiry. Tho commission advocated ought to include in it* membership men possessing a practical knowledge of banking and other'aspects of finance, industry, commerce, and rural production, together with a professor of economics well versed in the scicnce and canons of taxation, and, of course, responsible officials of the Taxing Department. Looking only at undisputed facts, there is no doubt that such a commission would be able to outline an jinoideiice of taxation sounder and more equitable than that at present in force or that embodied in the Bill now_ before Parliament. Since the Taxing Bill is not intended to come into operation until April next year, the inquiry might be instituted without interfering with the Government's plans for raising revenue. If legislation based on the evidence and findings of tho commission were passed early next session, it would be quite practicable to raise taxation on the new basis at- the period to which the present ■ Bill is intended to apply—that is to say, the taxation of the financial year 192021, payable for the most part early in 1922.' With the way thus open in all respects to a much-needed reform of taxation, the Government and Parliament should welcome the assistance which such a commission as is asked for would afford in finding a nractiea.l solution of this most difficult problem.