TOO HEAVILY TAXED?

Evening Star, Issue 19639, 19 August 1927, Page 9

TOO HEAVILY TAXED?

FINANCE MINISTER DUBIOUS RESPECTIVE MERITS OF LAND AND INCOME TAX [Feom Ouu . -Parliamentary itEPOttTEK.] WELLINGTON, August (S. Observing that he had been particularly struck by the curious contrast uctween the criticism of taxation in the House and the criticism which came Irom outside, the Minister of Finance concluded his speech to-night by making some interesting references to taxation generally, and more especially in its relation to the primary producers. Criticism from outside seemed to centre round the fact that there had been ijo reduction in direct taxation, while that voiced by members of the House was (with the exception of that from Mr idarns, AAhiitemata, who a(hocated a reduction in direct taxation) that there should be a reduction in expenditure. Very lew critics in tlio House bad gone to the trouble of showing where the curtailment of expenditure might take place, and only two of the New Zealand newspapers had bothered to mention items. in the same connection Mr Jones (Lilcsmoie) had certainly made an interesting contribution when be suggested that the two State farms, which were not paying, might bo sold. VVhen members said the i taxpayers were too heavily burdened the speaker could not help being puzzled, in looking over the various classes of taxpayers, as U> which was oo heavily taxed that a would lie *vai ranted. If they thought Customs taxation was high because the Customs revenue was high, it would bo a simple matter to increase the duties so that there would bo fewer imports, and raise the amount of taxation per head. This was the position in Australia, where there wore higher all-round Customs duties; but imports were increasing so enormously that the Customs taxation showed no more per capita than did that of New Zealand. Should the tan ft wall be lowered by 5 or 10 per cent, it would bo lound that revenue would go up per capita.

THE LAND TAX

Dealing with the land tax, Mr Stewart said he had been trying to ascertain which class of the community was overtaxed, and whether it would be better to make a reduction in their taxation rather than to maintain the present revenue and repay the public debt. The position seemed to lie that tho men at the top of the scale, who were the big farmers, were paying very heavily, while those at tho bottom of tho scale were small men, who escaped very lightly, although they had to pay heavily on local rates. Ah Pavrv: Practically all the average small farmer is paying is local rates. . Mr Stewart agreed that some paid very heavily, and instanced the case of a man who found that 07 per cent, of his profits was absorbed. Of rural land owners 59,839 out of 85,000 paid no land tax at all. The Minister quoted figures from the table to show that tho vast bulk of land tax was collected from tho highest grades of farmers. Some 59.QU0 paid neither land nor income tax. AVithont wishing to minimise tho difficulties of fanners, it must he taken into account that some farmers in tho higher scale paid up to 5 per cent, of ths value of their land in taxation. The matter would come up again when the animal Taxation Bill came down. It was unlair to say that the income tax was all in favor of the wealthy, continued Mr Stewart. For instance, the man with an income of £2,000 paid not twice, but three times the amount which the man with £I,OOO had to pay, while the man receiving £IO,OOO did not pay ten times as much, but fifty times, Mr Leo (Auckland East): He should, too. (Laughter.) _ Tho Minister said he had had plenty of evidence of the effect of the land tax in bad times, and know that sinaifanners as a rule preferred tho land tax. while the big 1 armors desired the income tax rather than the land tax.

Air Lysnar: Income tax would bo better in normal times. “ 1 think the bulk of the farmers prefer the land tax,” said the Minister, (if course, most parlies would agree that tho land tax had a certain moral value, in that it prevented aggregation.

As far as company taxation was concerned, tho Minister knew there was a great weight of authority in favor of altering tho system in lavor of the individual tax. AVbile lie would not go into that on tbo present debate, he had no desire to close down on it without consideration, and mn opportunity would conic when tho Taxation Bill came forward. Ho could only say in conclusion that in these iinsatislactory times lie could not see tho opportunity of reducing taxation owing to the loss of revenue which such reduction would involve.