'Who Pays Taxes?" Mr Kent Asks

Greymouth Evening Star, 9 November 1949, Page 4

'Who Pays Taxes? " Mr Kent Asks

’THERE is nothing so deceptive as the Government’s taxation policy. Mr Kent referred to it in his Cobden address, but his explanation did not tell the full story. The £lO exemption, ho said, freed 125,000 people from the payment of income tax, the total relief being £3,250,000. But who pays the remaining £46,000,000 in income tax being levied by the Government this year? It was at this stage that Mr Kent * chose to halt—and' wisely so, from his point of view. “They ask, ‘Who pays the income tax?’ ” Mr Kent said in another part of his address, himself suggesting the answer: “Salary and wage earners pay 10 per cent., others 22 per cent., and companies 68 per cent. These are the facts, simply, and clearly.” But, despite Mr Kent’s assurance, they are not the facts, “simply and clearly.”' It is true that 68 per cent, of income tax comes from the companies, but what Mr Kent neglected to say is that a company must recover taxation in the prices of its products and services. The Price Tribunal, in fixing prices of goods, takes company taxation into account, and the net result is that the consumers pay. And the consumers are not only the taxpayers, but everyone. The old story about the Government “soaking the rich” in order io distribute wealth among the poor was, of course, proved to be sheer nonsense long ago. The Government, “simply and clearly,’’ taxes the people. The total taxation bill this year is, /roughly, £132,000,000. Of this sum, about £49,000,000 will come from income tax. leaving about £80,000.000 to be raised from other tax sources. The majority of these are hidden taxes, but eventually they, all come to bear on the people as a whole. They are largely the indirect taxes that help materially to boost the prices of goods and services and thus raise the cost of living. Indirect taxes, as distinct from .the direct levies of income tax and wages tax, reduce the purchasing power of the pound note by about 4s. The total taxation revenue in 1935-36, when the present Government came to office, was £25,479,000. By 1938-39 it had risen to £37,798,000, and today it has .reached the enormous sum of £132,000.000, far exceeding the war-time peak, when half the revenue was devoted to fighting the enemy. These are the facts about taxation, “simply and clearly.”