INVISIBLE TAXES

Dominion, Volume 30, Issue 143, 13 March 1937, Page 12

INVISIBLE TAXES

Average Family Bill

INDIRECT BURDENS “The quickening interest Of the general community in the fact that, although they may not be numbered among this year’s payers of income tax, they cannot avoid a heavy bill iu indirect taxation, raises tho question of the size of that bill (says the Associated Chambers of Commerce of New Zealand in a statement issued yesterday). The following table shows the average amount paid in taxes (other than income tax) by a family of four:—

£ s. d. £ s. d. £ s. d. Indirect taxes 39 6 3 43 8 3 50 17 5 Unemployment taxes — ,10 0 7 10 13 11

39 6 3 53 8 10 x6l 11 4 xEstimated.

“Then there is the matter of taxation on companies. The individual payer of income tax or of indirect taxes, or of both, is wrong if he thinks that taxation on companies does not affect him. The recent increase in the rate of income taxation on companies (rising in graduations up to 7/6 in the £ on companies of moderate size) affects him very closely, because a company, in estimating costs, takes income tax into account just as much as it does wages and rents —it must do if it is to pay dividends, hold and attract the capital necessary for its operations, and continue to provide employment for workers. Consequently, most of the taxation on companies is paid by the public in higher prices for goods and services. The consuming public therefore swells Government revenues by this substantial invisible addition to the family taxation bill.

No Costless Senices.

“Information now available from the Census and Statistics Department shows that of the £4,288,618 revenue from income-tax in 1935-36, 0n1yf1,445,316 (or 33.8 per cent.) was paid by individuals, while £2,806,823 (or 65.4 per cent.) was paid by companies —the small balance being paid by nonresident traders, and agents for deben-ture-holders. (In passing, it is to be noted that-the Government Statistician’s figures show the average amount paid in income-tax in 1935-36 by individuals—-not companies—was £2l/14/9 per taxpayer.) ‘Therefore, the average industrial, commercial or agricultural employee, who pays little or nothing in direct taxes, is nevertheless a substantial contributor to the cost of government. If workers in general realised this truth, they would be less complacent iu the face of the rising tide of taxation and public debt. “The lesson to be learned from the present excessive taxation is that the taxpayer cannot expect to have his taxes reduced, and at the same time have more money spent by the Government. Public services cannot be given unless they are paid for. There is no beating the tax bill. The difficulty is that highly organised minorities demand public service—at the expense of the great body of taxpayers.”