WHO, PAYS INCOME TAX?

Lyttelton Times, Volume CXVII, Issue 18116, 5 June 1919, Page 4

WHO, PAYS INCOME TAX?

Election speeches as a rule are speedily forgotten, alike by tho public and by tho politicians who utter them, but they occasionally enshrine great truths from unexpected sources. Such a truth was enunciated by Mr Massey as long ago ns July, 1911, b when in the course of an address at Wellington Town Hall he said:

In regard to taxation, who is tho man who pays? Take the income tax. The man who pays that tax is not tho big man. He draws the cheque in tho first instance, but what happens? Ho writes the cheque, hut ultimately the payment of the money goes back to the working people of tho country and to the producers. You may tax any individual or section of the community, but any particular tax finds its way back to tho rank and file of the people.

It may bo unkind to mention it, but Mr Massey’s very candid and truthful statement of the position as Leader of the Opposition seems to have been overlooked when at a later stage of tho country’s history Mr, Massey as Prime Minister had an opportunity to translate his convictions into legislation. The “big man” has l continued ever since to transfer his burden of taxation to other shoulders, undeterred by 'any efforts to render the process less delightfully easy. It has become such a commonplace of business that the pretences which used to shield it from the vulgar gaze are now being abandoned as useless camouflage. Hence, we find Mr N. A. Nathan, chairman of directors of the Northern Steamship Company, while addressing the annual meeting of shareholders at Auckland a few days ago, touching upon the subject with quite brutal frankness. After discussing increases in the cost of operations in divers directions, he went on to say:—

Ip. addition to** these factors we have to reckon with our payment for income tax, which is now a formidable item in our annual expenditure, the last assessment exceeding £SOOO. It must bo. clear, therefore, that under these conditions we have no option but to maintain existing rates of freight and .passages. We hope further additions will not be necessary ; wo shall certainly not take action in that direction unless compelled by force of circumstances.

The unfortunate position of the common people having been thus disclosed by authorities who cannot be convicted of any too tender solicitude for the welfare of the toilers, it is pertinent to inquire whether certain favoured classes of the community are to be allowed to flout in perpetuity tho intention of the laws of the Dominion, which is avowedly to place 'the burden of taxation on the shoulders best able to bear it, or whether wealthy,corporations and individuals are to bo allowed to say, in effect: 1 “We do not intend to pay our taxes, for wo have the means at our disposal to make other people pay them.” The vicious effects of the system of “passing it on” are intensified by the commercial custom of regarding all expenses iilburrcd in connection with a business as a capital outlay on which interest, must be,/ earned. Tho .steamship company ■ whose taxation is increased very largely to pay for the prosecution of wjar in which victory is essential to the security of its assets, raises its freight rates sufficiently to pay the increased taxation plus the usual percentage of profit on- the increase in expenditure. The importer adds to the price of the goods carried by the steamship company the extra freight, and hi 3 usual profit on tlie gross charges of shipment. Tho retailor 'adds to the wholesale price of the goods, when. he receives them, his usual percentage of profit, and so it happens that the unfortunate consumers pay a profit on a profit on a profit on a war tax, together with the war tax itself. Theoretically the exigencies of free competition should supply a safeguard against such a process, but in these days of shipping combines and price-maintenance associations tho safeguard is badly worm-eaten. We should conceive it to be one of the first duties of an Income Tax Commission, such as we urge should be set up in this Dominion, to investigate this very important aspect of the incidence of taxation and to devise measures to ensure that' the passing-on process with its manifold temptations to price-inflation shall be rendered impossible. The 'task is a difficult one, and perhaps a rather unpleasant one, but until it is accomplished our income tax laws will in some respects-be merely a machine for facilitating exploitation. Whatever the ultimate outcome of remedial measures, we feel sure that the earliest symptom of their application would be a marked degree of relief to the pockets of that large class of taxpayers which has no possible chance of employing the passing-on process to evade the claims made upon it by the Commissioner of Taxes.

The cabled announcement, published yesterday, that the Olympio and other vessels now the property of the International Mercantile Marine syndicate are to be sold to a British syndicate, recalls many stirring incidents associated with the war-time career of the huge White Star liner. A few of these aro summarised in the following brief extracts from a circular issued by the White Star- Line Borne time ago dealing with the war services of its fleet: — •• The largest British steamer, it may, without presumption, bo claimed that the Olympic’s career throughout the war was one of such conspicuous merit as to entitle her,, amongst many gallant rivals, to the honour of the first place in the esteem and admiration of the British people for its mercantile marine. Who now has not heard of the Audacious and of tho rescue of her crew by the Olympic—a stirring deed, and one that earned a letter of appreciation and thanks from Admiral Jellicoe to our directors.”

Tho services of the Olympic in the Gallipoli campaign are then recounted, tho great ship having carried as many as 8000 troops on one occasion. She made many voyages across tho Atlantic, as a transport for Canadian troops, and later of the United States forces. •' Much more might be written of tile Olympic,” concludes the narrative, “but here will suffices brief allusion to one of her encounters with submarines. In the darkness of an 'early morning in May, 1918, when the good ship with her precious freight was nearing the entrance to the English, Channel, the mail on the lookout detected a submarine on the surface. At once one of the forward guns blazed out, and, with her helm hard over, the mighty Olympic swung round and crashed full speed into the enemy, then pursued her way contentedly, whilst a destroyer in the escort remained to rescue some thirty-one survivors of the submarine’s crew of sixty.”

At various times and at divers places during the last few years proposals have been made for tlie institution of University courses in journalism. In some ot the American colleges such courses have been established for some time, but in Britain and her dominions the movement has made slower headway. .Proposals, however, aro shortly to be submitted to the Senate of the University of London for starting next session within the University a special two years’ course of comprehensive study for intending journalists and for tlie institution of a University diploma in journalism to be awarded after examination to students who havo taken the course. The proposals, which, are primarily intended to benefit demobilised officers' and men, and released war workers, were drafted by a committee consisting of leading members of the University, under the chairmanship of Professor Sir Sidney Lee, Dean of the Faculty of Arts, in conference with the chief officers of the British Institute of Journalists and representatives of the Appointments Department of the Ministry of Labour and of the Board of Education. Sir Sidney Lee in a circular recently issued to tho Press invites persons interested in the matter to communicate with him.

Tlie project, as outlined by Sir Sidney Lee, appears to have within it all the elements of usefulness and success. Tho course proposed is a preparatory and not a qualifying one, and does not trench upon the highly debatable question as to whether journalism can be taught anywhere outside of an actual newspaper office- Tho function of all good journalism being to inform the public mind and to educate public opinion, even the- bitterest opponents of

• degree courses” in journalism are prepared to concede that a carefully selected course of preparatory study, which should seek to confer a firm understanding of fundamental principles in history, civics, economics, political philosophy and so forth, rather than 'a grasp of, the minutiro of these vast subjects', would prove of advantage to any aspirant for journalistic laurels, and in the end assist in no small measure to raise the status of journalism as a profession. At the same time it has to be remembered that the first and roost essential business of journalism is to get neyjs, and that is a process in wjych no course of training can take the place of • inherent and almost instinctive faculties.