CUSTOMS TAX ROBBERY.

Lyttelton Times, Volume CXV, Issue 16564, 30 May 1914, Page 14

CUSTOMS TAX ROBBERY.

TO THE EDITOR.

Sir,—Mr Miles Verrall, judging bf his letter in to-day's issue, is not only incapable of clear thinking on economic issues, but is even incapable of stating those issues clearly. I have not "repeated over and over again,''indeed, I have never once stated, " that a work« ing man with a wife and three children and £125 a year in wages pays no less than £25 .a year in Customs excise duties." What I have said, and what I shall keep on saying till Customs tax robbery is abolished, is that our Customs tax burden—a very much bigger item than our Customs tax revenue—costs the average breadwinner some £25 a year, or the equivalent of a work-* ing-inan's income tax of at least 3s 94 in the pound. Thero is no need for me to wast* either my time or your space in working out lor Mr Verrall the estimate he desires. Interviewed at Dunedin on May 26, the Minister of Finance stated that the Customs revenue for the past year totalled £3,426,744, or practically £3 10s per head, the figure stated bv Mr Verrall. Every man of any intelligence knows that the great bulk of the earnings of a working man with a wife and three children goes in rent and on the simple necessaries and simpla luxuries of life. Any man can see for himself by looking up tho Customs tax schedule in the Now Zealand Year Book, that the great bulk of our Customs taxes falls on building materials and on tho simple necessaries and simple luxuries of life.

And from these two basic facts my conclusion necessarily follows. That Mr Verrall cannot see this is not'inj fault, any more than it is my faui( that ho should write such utter nofr sense as that, taking the wholesalers' and the retailers' profits on the taxel as totalling 60 per cent " if the merchant and shopkeeper turned overt-heir dutiable stock four times a year it would mean a profit of 200 per cent "between them on one year's duties." If this means anything at all] it means that the merchant sells the same stock four times over, and that the shopkeeper also sells this same stock four times over, which, as Euclid would say s is absurd. Mr Verrall seems to think—or thinkn he thinks—that my estimate of CO per cent for (1) the wholesalers' profit in the taxes, (2) the retailers' profit on the taxes, and (3) the retailers' profit on the wholesalers' profit on the taxes, all three combined, is much too high. But, of course, I am dealing with gross profits, not net profits, and the merchant and the shopkeeper charge their gross profit on the gross cost of tho goods to them, including freight, taxes, and all other charges. 'Whatever the " tradesman or manufacturer in business '' pays in Customs taxes, he charges it on to the consumer in highei prices and with his usual profit added. It is not a question of " importing potatoes or wheat instead of growing them—or of importing flour instead of growing our own wheat." The point is that " protection" robs instead of protecting the worker, and that if we abolished all our Customs taxes and gave all protected employers a State bonus equal to the full amount they pav in wages wo should save at least £2,500,000 a year on the deal. The cost of "dutiable goods" would be much lower than it is now; and, further, that £2,500,000 a year being spent on other goods would mean a correspondingly increased demand for labour, and wages would go up all round. Cheaper goods and higher wages. How poor is Mr Verrall's grip on economics is shown by his question, "Does not 'everything cheap' mean cheap labourf" "Everything cheap" does not mean cheap labour; for, mani« festly, if money wages remaining the same, prices are cut down one-half, the average wage will buy twice as much as before, and therefore the real return to labour will be not less than before but twice as great as before. But, of course, money wages would not remain tho same- The demand for goods would enormously increase, tho demand for labour would therefore increase, and an increased demand for labour means increased wages. It is dear land that means cheap labour, because dear land handicaps every industry, thereby reducing the demand for labour and reducing wages. To have land values untaxed encourages lanrl speculation and land monopoly and makes land dear, .thus discouraging trade and industry and foroing down wages. To tax goods means a double tax on wages—(l) it discourages the production of goods thus re duchisr the demand for labour and reducing money wages, and (2) it forces up prices, which means that wages will buy less, and thus is equal to a further reduction in wages. On the other hand to untax goods will have exactly the opposite effect —(1) it will cheapen goods, which is in itself equivalent to a rise in wages, and (2) it will encourage the production of goods, thus increasing the demand for labour and further increasing wages. And to tax land values will tend to make laud cheaper for every purpose of industry,, thus greatly stimulating every industry, greatly increasing the demand for labour and thereby raising wages still more. The heavier the tax on land values the more idle land will be forced into the market, and the cheaper the land will be. The cheaper tho land the more every industry will be encouraged, the greater will be the demand for labour and tho higher will be the rise in wages. As to that £IOO "put into land,' if. the man has put it into land with tho intention of using the land on earning something from the land he will gain not lose by. the single tax. If he doesn't intend to use the land or earn anything from it, why does he put his money into the land?—l am, etc.,

ARTHUR WITHY, Chrfetcluirch, May 28.