THAT CAPITAL LEVI
Sir Josiah Stamp, at one time an Inland Revenue official, writing on the capital levy in the ’Spectator,’ says;— “ The capital levy is ‘ impracticable ’ in the ordinary sense of the word. It Is ‘ practicable ’ upon an altogether lower level of equity, yield, and efficiency than lias hitherto contented ns, and it is practicable even on that level only if certain essential political conditions are present. These conditions are not- present in any proposals now actually before us.” " The peculiar difficulties of the capital levy fall mainly under two heads: valuation and collection. The valuation of wealth looks simple, but often involves some of the most difficult matters the human mind can attempt. (1) IE a tax of 1 or 2 per coni, (on the Continental models) is being based upon capital values, £IOO on £IO,OOO is not altered to any material extent if the valuation of £IO,OOO proves to ’be too much or too little by 5 per cent., but if the tax is heavy, say 50 per cent., then, of course, every error in a valuation carries an enormous burden of error in the duty that is payable. (2) The difficulty is not avoided if the valuation is correct when it is made, for if the duty can bo paid only over a period of time, the valuation has to remain correct over a period also, unless injustice is to ensue. (3) Directly a tax exceeds in amount the annual income that can be drawn from the wealth under taxation and such a tax has to be paid the question at once arises of the necessity for realising a portion of the wealth itself in order to discharge the duty, and ip the process of realisation the valuation itself may be jeopardised.
“ (4) Tho case is often compared with that of death duties, but there are many important differences. In the first place, even if the amount of death duty should ho incorrectly computed, or not quite just in comparison with another similar case, the duty is paid by the estate, the estate is divided up amongst the various beneficiaries. , . “ I have formed tho conclusion that any scheme which must rely upon capital valuation of highly uncertain annual yields as its main feature is a third-rate taxing expedient only to ho resorted to when all tdso fails.”
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Bibliographic details
Evening Star, Issue 18533, 16 January 1924, Page 3
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391THAT CAPITAL LEVI Evening Star, Issue 18533, 16 January 1924, Page 3
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