"VIEWED WITH ALARM"

Evening Post, Volume CXXII, Issue 32, 6 August 1936, Page 10

"VIEWED WITH ALARM"

BY CHAMBERS OF COMMERCE

FIGURES EXAMINED

'The association views with the greatest alarm the increased and staggering taxation proposed in the Budi get.- The proposed taxation is, both in total amount and in the amount per head of population, greatly in excess of the taxation during any previous year—war years included," says the Associated Chambers of Commerce of New Zealand, in a- statement made today. "The total amount which the Government proposes to extract by means of taxation for the current year is £30,227,000, representing approximately £19 4s per head of the country's population. This is an increase of £4,750,000 over the yield from taxation for the last financial year—an increase of 15.6 per cent. On a per capita basis the increase amounts to more than £3 per head of population. The present Government claims to be following in the footsteps of Seddon, )ut on a per capita basis, the position is that a citizen today will be called upon to pay in taxation nearly five times the amount which he was called upon to pay during any year of the Seddon Government. ENTERPRISE HAMPERED. "The rates of income tax proposed will seriously handicap and may indeed cripple industrial and commercial activity and expansion. The association deplores the fact that the Government not only proposes to adhere to the present inequitable system of company taxation, but also proposes to increase the rates of company income tax. Companies earning £8950 will be called upon to pay tax at the rate of 7s 6d in the £—an increase of over 25 per cent, on last year's rate. The Government seems blind to the fact that income tax as imposed on companies is a tax on paper profits—not dividends paid. The tax takes no account of the fact that the profits may not be distributed but may be required in the business. . "Further, the Government seems to have completely lost sight of the fact that the majority of the shareholders in the trading companies carrying on business in this country are persons with small individual incomes. In effect, they are to be compelled to pay 7s 6d in the £ on their share of. their companies' profits, regardless altogether of the rate of tax (if any) applicable in their own personal cases. The association also considers that the removal of the existing exemption from income tax of the amount of unemployment tax paid by the taxpayer is harsh and unconscionable. The effect of the removal of this exemption is to tax taxpayers upon money which they have not received. MINISTER'S TABLE QUESTIONED. "The association-notes that the Budget contains what purports to be a comparative statement of tax payable by English and New Zealand taxpayers, published with an apparent attempt to show that New Zealand taxpayers are, so far as income, tax is concerned, practically on a parity with the taxpayers of England. This table leaves out of account altogether the unemployment tax which is levied in New Zealand, but not in England. If unemployment tax were taken, into, account, by the Minister in his table the result would show clearly that New Zealand taxation is considerably in excess of. taxation in England. • "The Government's proposals as to land tax seem to have, no regard to the distinction which prevails between rural and urban land. Large holdings of rural land are one thing, large holdings of urban land another. Of the latter it cannot be said, as the Minister implies, that they are held in many cases : for speculative profits rather than production. The large holdings of urban lands are those of actively trading companies—banks, insurance companies, stock and station agents, general merchants, drapers—holding land for the purpose of their branch businesses, in different towns of the Dominion. All of this land is put to full commercial use. To impose upon such companies the burden of a graduated land tax in addition to increased income tax will seriously handicap present business and stifle expansion and extension. In some cases it may be that the land tax will indirectly be passed on to the general public and thus swell the rising tide of the cost of .living; in other cases it will turn reasonable commercial profits into losses."