The Dominion WEDNESDAY, SEPTEMBER 27, 1922. A REDUCTION IN TAXATION

Dominion, Volume 16, Issue 2, 27 September 1922, Page 6

The Dominion WEDNESDAY, SEPTEMBER 27, 1922. A REDUCTION IN TAXATION

♦ • The Taxing Bill submitted to Parliament yesterday embodie .. in the circumstances may be described fairly as a >o. p c ® cour . relief to taxpayers. This policy manifestly is calculated to age a revival of industry, and bring it back to more p P tiOn lt the same time it will reduce the cost of living and increase employment. Taxation, in the bulk, is and must be passed on, and correspondingly widespread benefits are to be anticipated horn a duction in taxation. . ore fairly The reductions proposed in land and income taxation are y substantial, though they will leave very high rates still in for _ The reduction in the land super-tax from 33 1-3 to 10 per reduces the amount payable by a fraction less than e * sl * ’ little more than half of this reduction was made last yeai, howe ’ bj- the concession of a rebate of ten per cent, for promp paj • The abolition of the income super-tax of twenty per cent, is bigger concession to taxpayers. The effect is to reduce by one-sixth the amount that otherwise would uavc been payable by i viduals and companies. Here again, however, the reductioni was part anticipated by the rebate of five per cent, granted last year for ProI practically, the income tax is now restored to its wa F In 1920 the maximum rate levied was 7s. 6d. in the £. gis 1 of the same year, taking effect in 1921, established the higher maximum rate of Bs. 9 2-sd. in the £. The rebate of five per “ nt - J edu “ d tho maximum rate actually payable to a fraction over s. . the abolition of the super-tax, the maximum rate becomes is. 4d. in the £—twopence less than the highest war rate. Admittedly, in making concessions to taxpayers which enta:il an estimated loss in revenue of £929,000 per annum, the Minister of Finance is taking some risks. -u-vx „ At the moment the outlook is complicated by the possibility a remote one we hope-that the Dominion may have to incur new liabilities by sending a contingent to the Dardanelles. This apart, and in spite of the substantial reductions now being made in expenditure, it will not be easy to raise all the revenue needed to meet national obligations during the next year or two. . There is no doubt, however, that the policy aaopted is .sound in principle. As Mr. Massey observed yesterday: “If we go on as we are doing, with these enormous rates of land and income tax, we are going to run the country into disaster.” A policy of boldly reducing taxation will be attended by its own special difficulties. At least, however, it is a much more hopeful and promising policy than that of maintaining taxation at its crippling post-war level. , As soon as its contents were known, the Taxing Bill was assailed by members of the extreme Labour group. Most of what these members had to say, however, was based on an actual or pretended misapprehension of the facts, and was plainly designed for electioneering purposes. One of their contentions was that taxation ought not to be lowered when there had been some reduction in wages. The, recent economic history of the Dominion has surely made it plain to all that unduly high taxation not only tends to force down wages and tho purchasing power of wages, but in some cases makes it impossible to pay wages at all. The reduction of the sheep flocks of the Dominion in four years by four million head is an outstanding but net isolated illustration of the way in which high taxation has mopped up capital that otherwise would have been the means of providing continuous employment. 1 The plain answer to the general assertions of the extreme Labour group about favours to the big landowner and big taxpayer is that abnormally high taxation brings bad ..times to all sections of the population, and that wage-earners have os much to gain as any section from the lowering of taxation to a degree that industry is able to bear. At an immediate view the remissions now proposed may not seem to mean much to people of small or moderate incomes. Looking a little deeper into the matter, however, they mean to such people all that is involved in an effective step towards lowering prices, stimulating trade and industry and generally assisting a return to more prosperous conditions.