TAXATION POLICY
: BENEFITS RECEIVED
THE BROAD OUTLOOK
'■' The Bank of New South Wales in its latest circular deals with taxation and the reasonableness of paying by way of taxation for benefits received. For example, much more benefit is received from a small tax paid towards the cost of a Government Police Force than couldpossibly be gained if the individual were allowed to use the sum paid to provide for his own protec«on- , A, * t. • Social services, a system of free public education, good roads for transport, recreation parks, playgrounds are all communal benefits paid for out of Government revenue. "Taxation, States the circular, "is a means wherebY members of a community are enabled to purchase benefits collectively which none of them could secure sepa-; rsttely. Once these benefits are created they are, by their very nature, enjoyed by.alL" Howa Government collects its revenue is important. A system of taxation ihust be constantly studied to ensure that it does not discourage people from working and saving, and that it does not bear inequitably upon different groups of persons in the community. '3, THE HIGHER INCOMES. With the growth of social justice the principle has-been generally accepted that higher incomes should be taxed at higher rates. By taxing small incomes at -a low raf« and higher incomes at higher rates it is possible to obtain substantial revenue and at the same time secure some levelling of real income without causing undue hardship. ,' ■ . ' .. But, in the opinion of the bank, this argument should not be carried too far. It would be disastrous to tax higher incomes to.the.point where initiative is- discouragedvand. enterprise ; hampered. Anc^Hob,- a level may be reached at:which'.large-tax payments made by the -wealthier classes would press upon them.withsa severity equal to that of the smaller contributions made by the lessVwealthy. "In devising a, scheme of "taxation," states the circular, "it is therefdfe' necessary- to consider the action and interaction of1 its component partis so that a proper balance can*'be preserved among them." •^ A LONG-TERM VIEW. 'iii'conclusion the bank states a case for :a long-term view of taxation and describes the suitable. policy as ; higher taxation -mr times; of prosperity, and lower7taxation in' times of adversity.This iwbuld involve balancing the Budget over the whole period of the trade cycle "rather than; in each individual year..l ■'■;■■;'• - .. '. "There is," continues the circular, "no' J'good reason why Governments shouW' attempt to achieve a balanced Budget over: such an arbitrary period as bheyear. There is good reason, however, for attempting to attain a balance -between revenue; and expenditure t'dveir the "longer period covered by A»*. complete business cycle, even though SiiCh: a-period cannot be exactfy^deteririined in advance."
Permanent link to this item
https://paperspast.natlib.govt.nz/newspapers/EP19371103.2.158.1
Bibliographic details
Evening Post, Volume CXXIV, Issue 108, 3 November 1937, Page 12
Word Count
441TAXATION POLICY Evening Post, Volume CXXIV, Issue 108, 3 November 1937, Page 12
Using This Item
Stuff Ltd is the copyright owner for the Evening Post. You can reproduce in-copyright material from this newspaper for non-commercial use under a Creative Commons BY-NC-SA 3.0 New Zealand licence. This newspaper is not available for commercial use without the consent of Stuff Ltd. For advice on reproduction of out-of-copyright material from this newspaper, please refer to the Copyright guide.