DESTRUCTIVE FINANCE

Evening Post, Volume CIV, Issue 7, 8 July 1922, Page 7

DESTRUCTIVE FINANCE

FALACY OF. INCREASED TAXATION

The Welfare League writes:—

-In the House, during the debate on the Imprest Supplies, Mr. Holland, M.P., advocated the increase of taxation rather than reduction of public expenditure as the proper way' to meet the financial problems this country has to face. This proposal shows such utter disregard for the welfare of the country and its prosperity that we feel it our duty to expose the rottenness Of a policy which Mr. Holland himself must know to be contrary to the best interests of the whole population, more especially to the section which Mr. Holland and hisparty pretend to represent—the wageearners. _ The Reds talk very glibly of squeezing the 'capitalist,' by. using as the basis of their campaign the class warfare they have so actively preached for years past. To anyone who thinks over this carefully the-ruinous results are obvious, Aut unfortunately the Red propaganda is too often uncontradicted, and their fallacies by repetition are apt to be believed in. •

"Think this over for yourselves! Prosperity of any country is essential for the welfare of its people—prosperity depends on expansion and growth. Before you can have expansion in industry you must put back into business a large part of each _ year's profits, with which to increase its plant and production. Heavy taxation takes away annually large sums which would normally go to expand the industry, business, and production. _ It is a fallacy to suppose that the 'capitalist' spends his income on consumption, if all income was expended in that way industry and enterprise would, become stagnant. It is only by consuming part of his income and applying the balance to expand his business that progress is possible. Thus progress depends on the conversion of part of the earnings or income into capital for extending operations. Now taxation, on the scale existing in.this country at present, takes from tho trader nearly all his surplus income and applies it to the unproductive activities of the State; in other words it takes from the trader that portion which he would not spend on consr^nption and converts it to consumption by the State. "The average wage-earner in this country is a thoughtful man who very often studies economic questions far more closely than many employers and business men, and who is as capable of drawing sound conclusions as any other section of the community. To the wage-earner we say: 'Think out carefully the effect of liigh taxation on the lines roughly outlined above, and you will then realise that this burden on our industries and production is affecting you as much as any other class.' Taxation does not only come out of the 'capitalist'; taxation is ' nearly always passed on, and, therefore, is reflected in the prices paid for every necessary of life. It is also felt as keenly in the labour market, where it causes unemployment. For these reasons the wage-earner, as well as every other man in this country, is vitally concerned in this question, and should realise that it is imperative that the present high taxation be reduced if this Dominion is to prosper and-develop its resources. Thero is only one way in which relief can be gained, and that is by the reduction of, expenditure on our Public services, which has .increased some £5,000,000 in the last three year*."