TAXATION TROUBLES IN U.S.

Hawke's Bay Tribune, Volume XI, Issue 53, 16 February 1921, Page 4

TAXATION TROUBLES IN U.S.

New Zealand is not the only country which is finding difficulty in meeting current taxation. Despite all its great reputed wealth, America seems to be in no better stead, while, of course, her figures are vastly larger. At latest ma IT dates from New York, when the final payment for the year were falling due, there was prospect of widespread default. According to an exchange of that time, a prominent textile manufacturer had declared that

he could not pay the Government tbe £475,000 that he owned it. This answer reflected the financial and industrial situation in the United States which had been created by the paralysis of the export trade ajid the extraordinary shrinkage of values. Similar announcements had been made by more than a score of persons whose in-come-tax assessments based on their 1919 earnings ranged from £25,000 to £700,000. They had all beggeu' for extension of time. This the Government was unable to grant, as its ordinary expenses to January Ist amounted to £485,000,000, and it must have all the money it could collect. According to the authority quoted, under the American income-tax regulations the amounts due may be paid in four quarterly instalments. Most of the small taxpayers paid up in full last March, but the corporations and men with big incomes postponed payments until the last possible moment in order to save interest and make full use of their money in the meantime. The banks had assisted the heads of many businesses of whose solidity they were satisfied, but they had refused thousands of applications for loans to pay taxes. It is of interest to compare tfie penalties for default in payment of income-tax which apply in the United States with those which are imposed in this country. In America default on due date involves a penalty of 5 per cent of the unpaid tax with an addition of 1 per cent per month until actual payment. Here the immediate penalty is 5 per cent, if the tax is in arrear more than the 21 days of grace usually allowed for payment, 7i per cent if not paid within three months from due date, and 10 per cent if n*»t paid within six months. This latter -series of peic *n:agt»s represents reductions made by last session’s legislation, prior to whicn the penalties were 10, 12;’ and 15 per rr t for the respective periods ut d >fault nient .oned.