FORCING ECONOMY

Evening Post, Volume XCIV, Issue 66, 15 September 1917, Page 3

FORCING ECONOMY

A PAPER ON WAR TAXATION,

"Taxation and the Finance Bill, 1917," was the subject of a, paper read at the Accountants' Chambers last night by Mr. H. A. Gold. Mr. R. Wilberfoss presided, and there was a fair attendance. Mr. Gold dealt exhaustively with the economic aspect of taxation, and in an interesting manner treated his subject from various viewpoints. • "Taking the nation as a nation," he said, "it has gone, on very much as hitherto. This, however, will have to be changed, and is changing, by virtue of the necessities of !the Government for providing for the expenses incidental to, and arising from, the part which New Zealand is proud to take as her share of the conflict. We are faced with the demand from the Government to pay more for our tea, our smokas, and our beer, and if we have the goJd fortune to have an income of over £300 a year the 'other partner' conies'in .to take an increasing share of our earnings. The question of taxation, a subject that has not hitherto been as carefully, studied as it-deserves, has become the centre around which opinions many and varied have been expressed, all oy reason of the very high impositions which the ' Minister _of Fnanee has deemed it not only expedient but necessary to levy on the people of the country." ■.-■•*■.■ Referring more definitely to the income tax, Mr. Gold said:—"lncome tax.has always been payable by the company, dividends being paid free of all tax, and shareholders have not had to return their income from'"such sources in their personal returns. It isurged by some that no exception could be taken so long as the tax was within' reasonable < limits ; but that as war conditions compel the [levying of a heavy tax why should the shareholder whose income does not exceed £400 be entitled to a refun,d ? Why not a refund to the shareholder whose income is £500 or £600? Greater hardships may occur in individual cases in either of these latter than to those -with £400 a year income. The principle must, however, be conceded that there is a point below which you cannot with safety tax the individual. The minimum income for taxing is £300. and to avoid hardship as fa-r as possible the rise to £400 for the purpose of this section is,, when looked at broadly, probably as fair as is practicable. The further provision limiting tile refund to an amount that shall not exceed 6 per cent, on the paid-up capital of his shares will probably vitiate any semblance of relief. Would it not be fair to allow, say, 6 per cent, on the average market price? The bone o£ contention on the whole section is that small investors .will, or may be, penalised up to the maximum graduated tax, and companies qua companies (temporarily it may be) hard put to maintain their'usual rate of dividend. But bear in mind the equilibrium must be restored, and Ihis is achieved by the simple but effective expedient of passing it on. A tax of 7s. 6d in the £ is somewhat staggering : the cost of war is staggering. Such a tax should have the effect of enforcing economy, which in turn will steady prices to the advantage of ■the whole community."