REDUCING TAXATION.

Hawera & Normanby Star, Volume XLII, Issue XLII, 12 October 1922, Page 5

REDUCING TAXATION.

LAND AND INCOME TAX

BILL BEFORE THE HOUSE

tBY TEJjJSGKAPH PKKSB ASSOCIATION..' WELLINGTON, Oct. 11. The second reading of the Land and Income _Tax Amendment Bill was moved in tiie Bou^e to-night by the Premier. Mr. Massey traversed the report of the Taxation Committee and its recommendations regarding company tax&tion. He stressed the point made by a minority of the committee that if company taxation was reduced it would be necessary to double income tax on incomes between £300 and £2000. The exemption of income tax (£300) was now, higher in New Zea.land. than in any other part of the Empire. It was not proposed to alter this, which in itself was of greater advantage to the small man. Substantial ' reductions of taxation had already been made, and he hoped |by ne*xt year it, would' be possible to make a further reduction. ' The high rate, of taxation due to the war was, he felt sure, largely the cause of the 1 high cost of living from which we had been suffering. A large proportion of the unemployment prevalent during the winter just, past was due to the heavy taxation ,dii land and industry. The high taxation had resulted in a reduced output of, agricultural and pastoral products. He instanced the case of sheep farmers, who were unable to increase their flocks because they had to sell to meet taxation payments. .The relief given under this Bill, which would make the maximum tax 7s 4d in the pound, would be of great assistance to the producing and other industries. He referred "to the fact that £900,000 income tax and £300,000 land tax were outstanding^ b.ut he believed nearly all would be --recovered in. time.' while. ne hoped before long that all-round reductions would be possible. He could not agree to a reduction of company taxation at present, as that could only be'done at the expense of the individual taxpayer. The estimate of the income tax revenue _next year was £3,333.400. The maximum iiicome tax would be 7s 4d in the pound, and the'maximum land tax 8 3-5 din the pound. With an anticipated fall of £2,000,000 in income tax during the current year it would be difficult to make accounts balance in March, but he believed it would be povssible. Free of income tax debenture's issued, by the Government totalled £51,733/405, and already this had been reduced by purchase and conversion to £47.618,905. ■■i.MivT." K. Sidey (Dunedin South) complained tfyat the Government had not been fralik in telling* the House what was proposed to be done in' the matter of granting a rebate in taxation. He pointed out that the remission of land tax did not seem to have helped very, much in view of the amount outstanding. Mrjl Sidey charged the Government witn having, by (relieving taxation, encouraged speculation in land. He asked why nothing was proposed to be done to reform company taxation, which a majority of the [Taxation Committee had considered necessary. The Hon. W. Noswortny expressed surprise at the acting-Leader of the Opposition criticising the Government's land taxation, in view of the fact : that the; system .was introduced by the Liberal Party thirty years ago. Mr. J. MeCombs (Lyttelton) complained of the Government's refusal to give land-owners in his district revaluation. Some; of them were paying on valuations made- at the r>eak of the boom time, while, others paid on much lower valuations. The Government should be just before it was generous. Instead of making remissions of taxation, it would be better for the Government to f collect the full amount of land tax. It would then be able to lessen unemployment by' putting men on public works. A reduction of the Customs Itaxjition was the best means of giving relief to those most in need of it. • Mr. H. E. Holland (Leoder of the Labour, Party) said the Premier had told the House; how the income tax had increasecL but he had not told the House by how much assessable incomes had increased. A reduction in taxation, accompainied by a reduction in wages, was evidently an attempt to distribute, the cost of interest, "especially on the war debt, over the community. The relief which was being given in land tax was not going to benefit the small man on the land, but would assist the man who did not need assistance. That was the experience of last year's rebate, and it would be the same in connection with the present .proposed reduction. Small men would get a rebate of from 19s 3d to £14, but the man who did not need relief would get from £37 upwards. Much the same proportions applied 'to income tax reductions. It was not a reduction in taxation that was most' required, but a reduction in interest charges on mortgages. If the Premier could devise some means of doing this the Labour Party would join with him in doing it. At 12:55 the Premier rose to reply, denying that the .Bill was electioneering, but was a legitimate attempt to help small men. He also denied that he had ever reduced wages. What he had done was to /ask the House to withdraw the bonuses. I The Bill was read a second time and referred to the Native Affairs Committee for the purnose of considering clause 4.