DISCUSSED IN PARLIAMENT

Evening Post, Volume XCIV, Issue 57, 5 September 1917, Page 3

DISCUSSED IN PARLIAMENT

£80,000 FROM CIGARETTES.

Sir Joseph, referring to the suggestion that a stamp should be placed on every ! packet of cigarettes, said the scheme was not practicable, as it would ■ mean the employment of a ,number of inspectors. The increase in the taxatiorf on cigarettes would mean an increased revenue of £80,000. ;As far as the loan was. concerned, the amendment dealing with it was inserted with a.view to ensure complete ..confidence between the borrower and the lender. Mr. J. M'Combs said.he thought that the matter ot, the compulsory clauses wanted reconsideration. The loan proposition should be levied on capital and not on income. j Dr. A. K. Newman urged that theije should be a differentiation between unearned and earned income, and that there should be a reduction of 20 percent on earned income, as. was the system in England. ■ . <' . Mr. J. Anstey advocated that exemption allowances should be increased on small estates. '. .' A point made by tho Hon. D. Buddo was that under' the proposals contained in the Bill small shareholders would be compelled to invest too much in the War ' TAXATION OF BANKS. Mr. T. M. Wilford said that as far as the'banks were concerned, if there was any intention of doing away with the gold reserve as against bonds— ■ Sir Joseph Ward : There is no intention of doing that. ■Mr. Wilford continued that it seemed to him that a new system of taxation of I banks would liave to be devised. T3y an extraordinary system, the liabilities and the assets were added "together and the taxation assessed on the total. He questioned whether any company had aasete, contending that such assets belonged to the individual shareholders. FINANCE MINISTER ANSWERS POINTS RAISED. . Sir Joseph Ward, replying to certain points raised, said that about £16,000,000

had been collected for the loan, and 'he was. quite satisfied that there would be no serious trouble regarding the compulsory clauses of the Act. ' He was not going into the question of whether' taxation should be on earned or unearned income, but thought the.matter should be dealt with in connection with life insurance. At present he did not feel disposed to do away with any taxation at all. The question of taxation on companies could not be met in, a general way. If the "flat" tax was adopted, then it was going to benefit the large companies to the detriment of the small companies.. The only ,way to give relief to shareholders was by exemption up to £300,' and there was a proposal before the House to make the amount £400. As long as there was war taxation in this country there would be people who were not used to such taxation who would object, and it would be necessary to put taxation on them in some.other way. As to the method of adding the liabilities and assets together in regard to the. taxation of banks, he wished to point out that under the present system the banks were paying £100,000 more than under the income tax system. As to the. gold reserve, there was no proposal to reduce it. It had to be remembered that arrangements had to be made for flic gold reserve to go side by side with the provisions for war purposes. With a war loan of £22,000,000 the Dominion required to have stock that was equal in value to gold. RATES ON SPORTS GROUNDS. Referring to rates on sports grounds, Sir Joseph Ward stated that it would be improper to abolish them altogether. He thought the proposal contained in the Bill in this direction was a fair one. Mr. D. Buiok: Does this apply to agricultural show grounds ? Sir Joseph Ward: They are already exempt. Do you want to have them charged the same rates? (Laughter). Mr. L. M. Isitfc said that he understood the compulsory clauses were not for the purpose of raising money; but for getting at the financial shirker. (Hear, hear). . Mr. J. Payne. advocated that shareholders in a company should be placed on the same footing as other individuals, and if they ( received £400 a year in, income they should pay income tax on £1100. . EVERY TAX MUST HURT SOMEBODY. Sir Joseph Ward said that if th«y had to get the land tax they had to adhere to the system proposed in the Bill. He did not propose the taxing of debts. There was an effort being made to meet tlie case of men with small debts, to extend the exemption. The- taxation was on the unimproved 1 value, and he proposed to move an amendment under which the exemption. would disappear at £6000 instead of £5000. In practice it could not be arranged that the tax should be divided between the mortgagee and the mortgagor. In no country had any solution of the difficulty been presented co as to get the tax and get .thfi revenue. Every tax . must hurt somebody. He could not alter the fact- that the country required a million and a-quarter from this particular source. Mr. J. A. Young .suggested that'the sellers of New Zealand, meat who had sold their output to the:lmperial Government, and part '-of which was sold by agents in England, had made a profit which was legally taxable. Mr. HI put in a plea for the sports bodies which had the control of grounds and .which were in some cases in a very awkward position. , '■•■■. Mr. G. V. Pearce thought that the country should know what 'income tux was being paid on mortgages. He stated that.such a ,tax should be done away with. He hoped the Minister of Finance would look into the matter and see whether tho taxation cojuld:not be raised in some other. w*y. ' . r - : Mr. M'Combs thought that, taxation should bo on individual income. He expressed opposition to the tea tax, and spoke in favour of the reimposition of the excess profits tax.. ■ Mr. Pearce said he thought there was an inclination' towards too much taxation. A member: Tax 'the wealthy! v Mr. Pearce retorted that if all the oapital .of the country was drained it would be tlie working man and not the wealthy man who would puffer. TOWN v. COUNTRY. "The farmer has had the very best time he has had in this country," declared Mr. A. H. Hindmarsh. He said the farmers should pay tax on their mortgages, because they had in many instances entered into their mortgages in normal times before the war. A defence of the farmers was made by Mr. W. H. Field, who said that in many cases they were only hoping to pul] through and keep their heads above water. The farmers were being unduly taxed, and the Bill would have the effect of making them " stick up for their rights." . Mr. Payne urged that if a tax was placed upon the film people it would relieve the picture-show proprietors, who were losing money. FINANCIAL SHIRKERS. At clause 37, providing for the compulsory subscription to the war purposes loan, Sir Joseph Ward, in answer to criticism, said the Board proposed was to be set up for the purpose of making reasonable adjustment. These proposals had been circulated all over the country, and no responsible body of people had protested against them. On the other hand, he had received a very large measure of support. Mr. Lee: And you have £16,000,000 already. ' Sir Joseph Ward: Exactly. The clause, he said, was only intended to deal with the financial shirker, and he did not see how any exception could be taken to it. . .

Dr. Newman expressed the belief that' this was the most popular clause in the Bill. ■.'.-■

Mr. D. Buick agreed. What he wanted was to see the financial shirker hit hard. .

The Hon. Arthur M. Myers exoressed the hope that other parts of the Empire woujd copy the provision. Under it there .would be a great difficulty for any financial shirker to get rid of his responsibility. It meant, in effect, the adoption of a system of national economy. The Hon. D. Buddo.said that if the full obligation of the clause were put' into operation they could not carry out the functions for which they had been brought into being. The clause was passed,, with the amendment setting up an Appeal Board. Progress was then reported, and the House rose at 11.40 p.m.