THE TRUTH ABOUT TAXATION.

Marlborough Express, Volume XLIII, Issue 184, 3 August 1909, Page 6

THE TRUTH ABOUT TAXATION.

v (Lyttelton Times.) " Everybody, we suppose, wants _to know the truth about taxation. We ' -credit even the-Leader of the OPPO? 1" tion and his lieutenants, and the president of the Farmers' Union and other dealers inyfcaxation fictions with the desire to know what the facts are. Mr Massey and Mr Wilson and their friends may not like the truth when they see it, and as politicians they may refuse to recognise it, but as individuals they must accept it. We have had it hurled at us for months past that the burden of taxation has .been advancing by leaps and bounds. The habit of the Opposition critics is to take the figures showing the amount of direct and indirect taxation per head of the population in 1890 and the amount in 1907, and. to declare that the increase represents the additional burden laid upon the ■shoulders of the community. They take no account of the ability of the •community tp bear the additional burden, and they take no account of the •distribution of the burden. They are fond of talking as though the landowner carried the whole load, and they always suggest that the rate of taxation has been increased by the Liberal Government. For our part, if we are required to.pay a tax of a penny in |he pound on our landed property, we would rather have to pay on £1000 than on £100, and if the value5 of the property increased to £2000 we should expect to pay taxation on the increase. If we could -take Mr Massey at his word, however, we should have to believe that most of his friends' would rather be without an increase on their possessions because an increase in wealth involves an increase in taxation. The modern xule of taxation is an extension of Adam Smith's famous doctrine that taxes should be proportionate to the ability to pay. Nowadays we demand taxation in proportion to the services rendered by the State. In a remarkable speech deliveredat Timaru, the Attorney-General showed how that rule was being applied in Zealand, and incidentally he told the community some very impressive "truths* about taxation in the counrtry, truths -that we commend to the •earnest, consideration of every citizen. Last year the country paid in direct and indirect taxation a total of £4,317,761. Of that sum, £2,917,462 came from indirect taxation. Now, it is true that there was a \ steady increase in both the gross amount of Customs revenue and in the amount per head up to 1907. . But this increase was due not to any increase in the rates, but to';the progress of the country's prosperity, to the greater spending power of the people and to the demand for luxuries. If any proof of this contention is required it will be found in the fact that as soOn as" the spending power of the people was curtailed the amount of Customs revenue per head of the population declined. The truth about Customs taxation, of course, is that the Liberal Government has made enormous concessions upon articles of food and clothing in common use. In a series of tables Dr. Findlay showed that the increase in the gross Customs revenue has been very largely due to the increased consumption of alcoholic drinks" and tobacco. The rate of duty levied on fo6dstuffs has/declined from 27.74 per cent, to 7.07 per cent, since the Liberal Government came into office in 1891. The rate on' drinks jsuch as tea and coffee has declined from 50.08 per cent, to 3.81 per cent. ■There has been a small decrease in the rate levied on tobacco and a small increase in the rate on alcoholic drinks. Keeping these facts in mind, the comparison of the total amount of duty collected on these various • classes of articles in 1891 with the amount collected in 1908 is particularly interesting:— Food Tea, etc. Alcohol Tobacco £ £ £ £ 1891 201,717 111,092 294,902-257,778 1908 116;309 13,807 672,998 560,299 While the food imported has risen from £1 3s, Id to £1 14s 9d per head in the seventeen years, the duty collected, thanks to the Liberal Government's concessions^.. has fallen from - ;$s 5d to 2s s|d per head. On nonalcoholic drinks, while the value of importations per head has remained almost stationary, the duty collected has fallen from 3s 6d to 3£d. The last concessions made by Parliament in Customs taxation involved a substantial sacrifice of revenue, and the indirect taxation per head of ,the population was actually 8s 3d less in 1908 than in 1907. That is the important fact in regard to indirect taxation. Next we come to the direct taxation, which in ten years has grown from £665,818 to £1,460,299. Here again the explanation is found in the wonderful increase in prosperity and private wealth. The number of persons paying income tax has increased

from 5000 to 11,000, and the number of those paying land tax from 15,000 to 30,000. 'There are thus twice as many' people paying direct taxation now as there were ten years ago. Remembering that a man must have: an 'income of more thani£3oo aryear, of-, land worthy without im.pro y®ments, £500 before- he- ipays'!: taxationy Dr.., Findlay may reasonably ' claim thatr this direct taxation falls on those best able to bear it. In fact, between 1891 and 1908 the value of landed property, increased by over £131,000,000, and the total increase in the value of private property in those seventeen years of Liberal Government is estimated to have been over £250,000,000. The Opposition is fond of telling us that the Government valuations' of land have been wantonly raised in order to increase the revenue from taxation. The Attorney-General meets that contention by quoting the sale prices and Government • valuations of properties actually sold in various provinces in the second half of 1908. We need make no apology for repeating these impressive figures:—

The prices quoted are those actually registered, and the figures show clearly enough that the Government valuations are from 25 to 30 per cent, lower than the market values _of the properties. We suppose this is /why some of the delegates to the Farmers' Union Conference professed to have no confidence in the Valuation Department ! ' It would be amazing if the private wealth of the community had not enormously increased during the" past seventeen or eighteen years. From the very moment when it entered office, the Liberal Government set itself to develop the country on the best lines. It constructed roads and railways to open up the backblocks, it organised special departments to advise and assist the farmers, it undertook the grading of produce, it collected information concerning foreign markets, it acquired huge estates arid cut them up for closer settlement, it lent money to settlers ;and local bodies at-low rates of interest y in fact, it took every step, that experience suggested to promote the rapid development of the country's resources. The people who have reaped most benefits from this remarkable demonstration of State activity are, very often, the very people who attack the Liberal Government most bitterly. But Dr. Findlay has given them facts and figures to think about. He has once more laid the public under a debt of gratitude by his careful, clear and logical analysis of the position in regard to taxation, and the public, having common-sense to guide them, will know in the light of his figures just how to regard the silly and pernicious fictions retailed from Opposition platforms and by Opposition journals.

■ Sale price '•i ■ £ louthland ... ... 160,434 Canterbury ... ... 351,815 iiickland ... ... 242,987 Wellington and Haivke's Bay ... 380,279 >tago .'. 585,422 V aluation. £ 128,829 266,171" 151,119 311,678 475,702