TAXATION

Evening Post, Volume CVI, Issue 30, 4 August 1923, Page 3

TAXATION

HOW THE BURDEN IS DISTRIBUTED

*'THE PRESENT UNJUST SYSTEM"

(Contributed by Mr. G. Mitchell.)

There is every indication that the Government intends to make a considerable reduction in taxation, including company tax, but what is wanted is a review of the whole system and incidence ol taxation with a view to each individual in the country being called upon to pay to his income. It was expected that the burden which has been imposed on the poor people for so long would be removed by the Government when taxation was under review; but it is only proposed to lighten the burden where it should be removed altogether and placed on the right shoulders. . . .' '

People do not yet seem to realise that about two-thirds of our income tax is paid by poor people who should not pay income tax at all; that the poor are taxed while the rich, who hold shares in companies, go tax free. They do not realise that the banks, gas companies, coal campa-nies, shipping companies, mercantile companies; in fact,'all such companies, do not pay the income tax —they are merely Government agents to collect it from the people.they serve, no matter how poor those people may be.

That the money necessary to maintain th 3 services of State should be collected from each individual in accordance with his income is a golden principle followed in every country in the world except New Zealand. ' ■■

In our country, if the rich choose' to put their money in company shares, they may go tax free by unloading their tax on to the people the companies do business with.

The writer knows of. a citizen drawing between £6000 and £7000 a year, and the people using coal and gas and shipping pay' his income tax for him. That man has no dependants, yet Williams, "with six children under ten years of age, earning £4 Is 6d per week, is called upon to help pay the former's income tax. Although the exemption from' direct taxation is higher here than anywhere in the Empire, yet, by this system of passing it on, they are undoubtedly the heaviest taxed.

It has been argued that if the income tax is considerably reduced, or removed altogether from companies, the companies would put the amount in their pockets and not reduce the charges to the people, which has been the case in the past. Competition in most cases ■will assure that the people get the reduction. But where 'this fails, it should not be beyond the power of Parliament, when reducing the company tax, to see that remission.. is passed on to the people by a reduction in charges. But Ep long as -the present unjust system obtains the tax will b s passed on to the poor, while the rich will go comparatively free. We will continue to taxthe poor,to save the rich.

For instance, Mr. Rich could draw annually free of all income tax:

£5000 from bank shares, and the bank would collect the tax from its customers for him. .'■""'.'.""" ; -, £5000 from' gas company shares, and the gas" company would add the tax to the price of gas, and all the gas consumers, no matter how poor, would pay. ■ , . : £5000 from shipping company shares, and the company would add the tax to the fares and freights. £5000 from coal company shares, and the company would add the tax to the price of coal. £5000 from freezing company shares, and the company would " add the tax to the farmer in killing and freezing charges.

He could draw this amount from each and all of them, and not' be called upon to pay any income tax whatever. In fact, our taxation is one which allows the rich, who can and should pay tax. to unload their burden on to the poor, who are helpless to evade it. When the House is considering the question of taxation, is it too much to ask that the whole incident shall be reviewed and that, according to each individual's income, so shall be he called upon to contribute directly to the needs of the State, that we shall no longer make companies collecting agents from the poor that the rich may go free? This is a big problem which cannot now be tackled during this session, but w-9 are apparently to have a welcome reduction, of company taxation to 5s before the session ends, a nd will then see if .such reduction is passed on to the people by the companies. Let us trust that next session the whole system and incidence of taxation is revised and the tax placed on the individual shoulders of those who can and should bear it.