LIVING STANDARDS

Evening Post, Volume CXXVI, Issue 63, 12 September 1938, Page 7

LIVING STANDARDS

THREATENED BY TAXES

BRAKE ON DEVELOPMENT

From taxing wages for the purpose of its social security scheme, the Government, by its decision to levy on company profits at the rate of Is in the £ ior the same purpose, has moved on to taxing assets, says a statement by the Associated Chambers of Commerce of New Zealand. ■ : > An important and prosperous company is quite obviously an asset to the-State, and to the community. Companies are responsible for the greater part of the industrial and commercial activities of the: people. They, hayei been closely identified with ,;the" growth in the standard of, living.; They consist not of a few, rich .men, ■■; but of thousands of citizens, men and women, who. have, practised thrift arid invested their savings by pooling tl^ejtniin companies. The political ' vie\/: seems curiously to be that these; con-; ceriis. are legitimate.subjects for prey; that the more efficient they are, the more they expand their operations, providing commodities and services for the people/ securing rewards for the thrift of their shareholders, multiplying employment and the distribution of wages, the stiffer must be the taxation. , i CAPITAL DRIVEN ABROAD. | Taxation on company operations ia - New Zealand has, by this latest addition, soared to a point never previously contemplated. It means, a heavy penalisation of enterprise, of business capacity, and of good management. It means that as earnings rise through incentive and efficiency the Government demands—and takes—a major part of additional profits instead of allowing the company to accumulate reserves, and to use their resources for further development, further production, further employ-, ment, further distribution of wages and salaries, and further diffusion of benefits among the whole population. The system is plainly at fault' that deliberately inflicts ; such a serious disability on progress, and . imposes such crushing burdens on co-opera-tive effort and joint enterprise. The investment and employment of capital for industrial and commercial development is discouraged, or actually repelled. With taxation on companies at this abnormal level, in comparison with Australian rates, for example, it is hopeless to think that capital will be attracted for the exploitation. of the resources of this country, present and potential; the tendency will be for capital to ba driven to seek avenues abroad, where* » it is not subjected to such punishing penalties. Prospective overseas investors, contemplating the putting of capital into productive enterprise in the country; are faced not with welcome and encouragement, but with a/barbed-wire fence and the certainty that the State, which shares none of the risbs of enterprise, will step in and .take, the; largest portion of any profits that are made; hence overseas capital goes elsewhere. Consequently, it becomes less than ever likely that the value. of the Dominion's national production will grow to the extent that will be necessary to support the growing costs of the social security scheme of the Government as. at present drawn. Courage and energy cannot overcome the evil effects of excessive taxation, which are shared by all, inescapably^ ATTACK AT BOTH ENDS. At the same time as this exorbitant . tribute is being levied upon co-opera-tive enterprise, the Government : is; also stepping up, by means of the increased wages tax (which must be increased still further in due course) the taxation on the individual incomes of the people to record levels, - diminishing those resources of the people that would otherwise have been free for investment in commercial enterprise. Thus the co-operative development of the resources of the country is; attacked at both ends—at the point of investment and at the ; point of reward. Companies, which are performing a service; to society, a are. being treated as if ' they have / committed an offence against society. Nothing could be more absurd, or more detrimental ,to public well* being. The. Government, in its desperate efforts to -find ways and '• means bt ' raising money for that social insurance' schenie by which it hopes to im- \;- proye the standard of living, is, by; its ; taxing methods, following the path > that leads most quickly to a reduced . standard of living.