A PAT AND A KICK

Evening Post, Volume CXXXVIII, Issue 147, 19 December 1944, Page 4

A PAT AND A KICK

In contrasting Parliament's decision to increase the salaries of members with its failure to remedy other obvious injustices, the chairman of the Wellington Stock Exchange (Mr. Hamilton) gave expression to an opinion that is widespread n the community. Mr. Hamilton made reference to the consistent failure of the Government to recognise the justice of requests for removal of the special tax on so-called unearned income and to the deferment of claims by the lower-paid workers for adjustment of wage irregularities. Responsibility for the increases in Parliamentary salaries must be Hccepled by the members of both •>oli1ic?l parties, but-responsibility for :!v> il'fhu'e to-em-rcct the anomalies to '■.v'r.ch Mr. Hamilton has drawn atten-i'.i-:m belongs to the Government. Wheu- ' .vcr a case has been made out for an

■'Ijuslri'.enl. of Uixa'.ion anomalies, the Minister of Finance has' used the

excuse that New Zealand's war and post-war commitments are so heavy that it is not possible to do anything that would reduce revenue. That the country's commitments, present and future, are heavy is not denied, but the very fact that taxation must remain at a high level is in itself one of the soundest reasons why its incidence should be just to all sections. The duty of paying for the war belongs to everybody and, so far as is possible, the burden should be spread evenly. That is a first principle of taxation, and when the system cannot stand up to that test it cannot be said to be equitable.

It is extremely difficult to understand the grounds on which the Government justifies—or, if it does not justify, continues—a system under which a special tax burden is placed on those who have been old-fashioned enough to see some virtue in the practice of thrift. There are many people who, instead of being willing to lean on the State. hi.ye made provision for their future in one way or another There was a time when such action brought its own reward, but as the law stands at" present reward has been replaced by penalty. The Government regards the interest from savings as unearned income and imposes a penalty of 33 1-3 additional taxation. When this penal tax was first applied it was intended to take the place of a compulsory reduction in interest, but since its imposition interest has been compulsorily reduced and there have been other reductions as the result of conversion operations. What justification, therefore, can there be for retaining the penal tax? The case made out for its abolition is unanswerable, but yet the Government turns a deaf ear and perpetuates a glaring injustice on the ground that reductions of taxation are not possible at present. The chairman of the National War Savings Committee (Mr. Small wood) yesterday paid a well-deserved tribute to the many thousands of New Zealanders who have voluntarily placed their surplus money at the disposal of the State. To many this has represented a real sacrifice. But what does the Government do? If any of the thrifty people happen to come within the income tax-paying classes it exacts from them an additional and penal tax on the ground that the small sum of interest received is unearned! This praise for thrift has knobs on it.