INCOME TAX

Evening Post, Volume CIII, Issue 76, 31 March 1922, Page 7

INCOME TAX

Sir, —Your correspondent, "B. Alert," returns to the attack in" your issue of yesterday, the 29th/instant. Your correspondent says that my letter contains fallacies and side-tracks the main issues, and is an untenable defence. He does not, however, give any reasons for this statement. A bare assertion, unbacked by reasons from ail anonymous writer, carries no weight. Your correspondent says it is most desirable that we should all pull together to try and get the removal of the 20 per cent, super-tax next session and several other improvements in the present income tax law. In this l statement I feel sure most company managers would agree with him, and would not push s their own special grievances if it were not such a very serious matter for them.. It ie, however, a matter of life and death to many large, companies and their customers to have the present penalty taxation on large companies altered. I was talking to the manager of a large, frozen meat company a few. days ago. He stated his position; he said farmers were complaining, and rightly complaining^ about the present high freezing charges. "But," he said, "look at my position; my shareholders expect me to pay them a dividend, and I can hardly- expect them to be satisfied with anything less than 7 per cent. If I fail to obtain this I will probably be relieved of my.posi-j tion and someone else appointed in my place. A 7 per cent, dividend, however, on the large amount of capital that is employed in my company means £20,000 a year. In addition to this, financial critics and my shareholders will expect me to provide something to add every year to reserves; they will not be content with much less than half the dividend; this would be, say, another £10,000 a year, which means that I must. earn £30,000 f year. If I do this I must earn another £30,000 a year to give to the Governmsnt, making £60,000 a year in all, and my charges to farmers must be adjusted to enable me to do this. But this is not all; one of the largest items of expense in connection with freezing works is the coal bill. The coal is supplied by large companies, and the. cost is weighted with; the heavy income tax that they have to bear; the coal is carried by shipping companies, and, the freight is again weighted by the heavy income tax that they have to bear." There is only one fair way-of settling the income tax question, and that is that every individual should pay income tax in proportion to his means; and that result is not obtained by the present system.—l am, etc., JUSTICE. 30th'March. to ins isitor. . Sir, —I notice there is a. plea by "B. Alert" for further space in your issue of 2Sth instant. I am sorry to have to ask for any, but cannot apologise for what ia an apparent duty to prevent-the public from being / misled as to the point at issue. "B. Alert's" charge of "fallacies on the part of Justice" remains to be proved, and empty statements of that nature can be taken for what they are worth. He is meandering, and now dwells on "relief,". while tho real subject is "Company or Individual Taxation." Wo must assume at this stage that the country, requires the revenue, and I must bring "B. Alert" back to the point, viz., the most fair way of allocating tho responsibility. He talks about sympathy for the company manager. That is absurd. It is a matter affecting shareholders and the general public. I We do not desire any half-measures to obtain temporary relief, even if tho end does justify the means. The present system of company taxation is cither right or it is wrong, Something intellectual on tho subject by yourself, I am sure, would be wolcomed to prov3.it misunderstanding on 'he part of the uninformed. —I am, etc., B. SENSIBLE. 30th March.