TAXATION BURDEN

Evening Post, Volume CX, Issue 100, 24 October 1925, Page 7

TAXATION BURDEN

TO TUB EDITOR. Sir,—Not content with disseminating their dishonest statements, auent the Reform Government's alleged proposal to reduce the workers' wages by 7s 6d per week, certain Labour candidates in .this city are circulating handbills in ,wlnch highly misleading representations pre made.

The candidates' comments on taxation and the comparison drawn between. Custom and Excise taxation and income .tax revenue make it appear (as ono candidate puts it) that "the Keform Government has transferred nnich of the load of taxation from the shoulders of those best able to bear it to those of the general community who pay through the Customs duty."

The comparison is grossly unfair. It is .not one between direct and indirect taxation, but simply between indirect and one class only of direct taxation. Income taxpayers are in a- great many cases land taxpayers also; their estates at death are subject to death duties, and tln;y also contribute , more heavily to other forms of direct taxation and to Customs and Excise- duties than the general run of the community.

In the very one-sided table put before thj-electors, Labour gives what purports to be the Customs und income tii.-: collections for the years 1922, 1923, 1924, and 1925 (financial years ended 31st March in euch case), and on the strength of the figures arrives at the conclusion that £52 8s out of every £100 of taxation revenue is raised at the Customs. Adding together the Customs increase and tiie income tax decrease ovei^ the three years, the electors arc asked to believe "the load transferred" (whatever that may mean) by such increases and deductions amounts to £13,425,605. By that it can only be assumed Labour means to imply (as the party's representatives ask us. to remember that "Customs takes a much larger proportion from the pockets of people with small income than from the wealthy"—a fallacious statement that ■will not bear analysis) that "the wealthy" people of the Dominion have been relieved, of taxation to the amount of £13,425,605 since 1922. That is, of course, an absurdity, but it is »n 'absurdity of the Labour Party's Making, not mine. And it conveys an absolute uutruth.

All along iv the history of our Dominion the largest proportion of tho taxation revenue required for the purpose of the General Government has been raised at the Customs by means of Customs mid Excise duties. Thus in 1904, 73.93 per cent.'of the total taxation was raised in that way; 72.77 per cent.-in 1906 ? 6U.26 per cent, iv 1908, 65.63 per cent, in 1910, and 64.16 per cent, in 1912, the year the Reform Government took office. On Labour's own showing it is now only 5:2.40 per cent., so that, proportionately, less revenue is by way of taxation at thu Customs to-day than was raided in 1912. ... . : ' .

Anyone who knows anything'at all on tli v subject is aware that Customs collections are dependent upon trade, and that it is upon the trade of the Dominion (export and import) that the wealth 01 Iho country depends. The present tariff gives the people of New Zealand what is- practically a free breakfast table. Of the Customs and Exuiso revenue, considerably more than a third is derived from alcoholic drinks and tobacco, and less than 6 per cent, from Sudds and non-alcoholic drinks.' Roughly, these items account for 42 per cent, of the total collections. It is only the vsurs of such drinks and foodstuffs who contribute to the taxation levied upon them. Thesame thing is true of all imported goods and stuffs which pay duty at the Customs—the users only pay, A buoyant Customs revenue reflects the prosperity<of the country. A declining .Customs revenue, to the extent that it indicates a falling off in trade, betokens and unemployment. The tariff revision of 1921 resulted in remissions of duty ' (based on the average of the importations • for the two years 1923 and 1924) to the amount of £429,750 per annum. Increased rates of duty were levied-only on alcoholic spirits, tobaccos, and motor vehicles,/although in certain cases, where it was considered" necessary for the protection, of New Zealand industries, increased Unties were imposed. ■ Income tax remissions, especially on ilia larger incomes upon which taxation is levied, were very necessary because the greater number of payers were trading and co-operative companies and business firms, etc. The tax on wealth has been very great during the.last ten years. Between 1916-16 and , 1924-25, '£74,111,843 has been received from the State from its taxpayers in respect oE land and income tax and death and succession duties alone; whereas during tlm same period Customs and Excise collections only totalled £57,510,905. The land and income taxpayers are by iar the largest contributors to the Customs collections; but, assuming they only count for 50 per cent, of the total— a. very conservative estimate of the pay-' niunts, etc., so-called "wealthy" people iniike in their expenditure upon luxuries and comforts that tho ordinary man goes without—they have contributed £102,867,295 in the shape of. land and income , tax, Customs and death duties, 'etc, during the last ten years, against.i £28,755,452 contributed by people with j small incomes;, whom Labour would have the unsophisticated electors believo have been taxed, so heavily by the Reform Government, in order that tho latter ; might takes tho burden off "tho ■wealthy." I think I can claim to have, shown that the figures are untenable, as was the suggestion the other day that the Reform Government had endeavoured to embroil tho waterinders in the shipping strike so as to make the position easier for' themselves at the elections.—l am, etc., . ERNEST ■A. -JAMES. 22nd October. ■• ;