Taxation

Horowhenua Chronicle, 7 October 1931, Page 7

Taxation

These proposals leave about £470,000 to be provided for by additional taxation over and above the amount proposed in the main Budget. The first question is to where tnis can be imposed with the least hardship. As regards Customs taxation the tariff rates are already so high that the law of diminishing returns is operating over many of the itpms. I propose, however, to move a resolution to-night with regard to two classes of imports which X think will provide about. £240,000 towards the amount required. For the rest I am driven to review the position and the spossibilities of further direct taxation through the income tax. Income tax is always less palatable to the taxpayer than direct taxation, but in the present emergency we have no option. The payers of income tax will view with strong disfavour further burdens being imposed upon them. It take it, however, that these taxpayers would prefer to shoulder further burdens rather than see reductions made in the old age pensions, soldiers’'pensions and pensions for the blind. They would equally resent any suggestion that the State should default in its interest payments. A reduction in pensions may at any time become an imperative necessity if the world’s price levels remain low, but for purposes of my present computations I have laid this on, one side. Dealing now with the income tax,- it is well known that the company tax in New Zealand is the heaviest in the British Empire, if not in the world, while the individual income , tax is the lowest in the British Empire. I do not therefore .consider it expedient or just to add anything more to the company tax than was imposed by the main Budget. More particularly is this the case in view of the fact that a large proportion of the companies engaged in

business in New Zealand are engaged in financing or assisting the primary producer, and any- further tax burdens imposed upon companies is liable to reflect itself in a restriction of advances to farmers or withdrawals of other forms of, assistance. I therefore exclude the companies from consideration in reviewing the prospect of further revenue from direct taxation.