The Grey River Argus TUESDAY, September 27, 1949. PROFITS AND TAXES

Grey River Argus, 27 September 1949, Page 4

The Grey River Argus TUESDAY, September 27, 1949. PROFITS AND TAXES

JT will be expected that the election policy which the National Party yesterday finalised will have reference, among' other things, to profit sharing and cuts in taxation. The Party leader used to proclaim himself “keen on profit sharing'”,, and during the budget debate he complained that taxation js more than three times what it used to be ten years ago. The question thus arises as to whose profits should be, or actually are, shared. To-day a very large part of what is called taxation is actually being redistributed in money to the community. Contrary to the cry that the Government wants the spending of it, a great deal of this revenue does not enter into Government expenditure at all. Taking as an example the past financial year, there was no less than £55 millions distributed in transfer incomes by way of family benefits, pensions, universal superannuation, subsidies on necessaries of life, and the like. In actual fact the amount retained for State expenditure was only £64 millions, and, allowing for the fact that £2O millions of it was due directly to the war, the amount' was less than the sum directly redistributed to the community. Comparing this with the year Mr Holland quoted, it is found that in 1938-39 there was (directly transferred back to the people in money only some £8 millions, or not much above one seventh of the amount last year. The increase in the total of direct and indirect taxes over the decade, excluding the money directly redistributed, was 121 per cent., or from £29,100,000 to £64,200,000. In the same period, however, there was a huge increase in private income. After excluding the transfer incomes also from the figures, there was 119 per cent, of an increase in private income between 1939 and 1949, or from £lB5 millions to £4o'7 millions, equal to £221,600,000. In fact, excluding the transfer' money from both taxation and incomes, the taxation percentage was practically the same—ls. 7 per cent, in 1939, and 15.8 per eent. in 1949. The Government, moreover, has prevented an increase in the burden of taxation in spite of the years of costly warfare, which is still being paid for, ami despite the additional Government services being provided for the people.. The war cost the Dominion £640 millions, while war pensions rose from £1,600,000 to £5,000,000; defence from £2 millions to £10,400,000; rehabilitation from zero to £23,000,000, and debt interest from £11,500,000 to £16,800,000. Thus the annual expenditure was bv the war raised by £19,500,000, from £15,100,000 to £34.500,000. Since the war national security lax of Is in the £ has been removed; income tax surcharge lowered from 33 1-3 per cent, to 15 per cent., with wife exemption increased to £lOO from £5O; a £lO rebate allowed equal to £7O exemption; the social security fee of £1 eliminated; sales tax reduced in most cases and eliminated from food, clothing and other things of household issue. Along with tariff: cuts through agreements the remissions have totalled £46 millions. The latest concessions for sports, musical and operatic bodies were accompanied by the £lO rebate, so that 123,000 people thereby are completely exempt from income tax who would otherwise have been payors, while half of the remaining people have had their income tax cut 50 per cent. The tax burden does not fall on the

married workers, their residues where income tax is paid being larger on a given amount than ten years ago. The National Party wants to alter the incidence of taxation, because of the fact that last year, for example, salary and wage earners paid 10 per cent, of their income in tax; other income earners paid 22 per cent., and joint stock companies paid 68 per cent, of their income as taxation. Now as to profit sharing in the National Party style, Mr Holland declared that he found it would give rich dividends in return! It is the dividends, then, that are the desideratum. An expert observer who has made careful inquiries, said that the replies in fifty-two cases proved only one true, profit sharing scheme to exist. The schemes, he says, are mostly only the payment of a. bonus on wages at Christmas! The true idea is for the worker to be a partner and draw his share of the profits by right. The Government, at anyrate, is making a far more comprehensive and fairer distribution of profits through taxation than any of those bonus schemes.