Manawatu Evening Standard. TUESDAY, JULY 14, 1925. TAXATION REDUCTIONS AND EXEMPTIONS.

Manawatu Standard, Volume XLV, Issue 188, 14 July 1925, Page 6

Manawatu Evening Standard. TUESDAY, JULY 14, 1925. TAXATION REDUCTIONS AND EXEMPTIONS.

The Budget may be expected to make its appearance shortly after the Address-in-lteply debate finishes. So farf we have no indication of the Government's policy in regard to taxation, beyond the Prime Minister’s pronouncement, on assuming his new responsibilities, that '‘the policy which his late distinguished predecessor laid down in general, and which a large number of members were elected to support, is to be maintained.” It was the late Mr Massey's policy to reduce taxation as far as possible, and it may not unreasonably be hoped, therefore, that further reductions of taxation may find their place in the 1925 Budget, and that Mr Nosworthy, who retains the Finance portfolio, for the time being, will make some definite statement on the matter. The Government has done well to reduce taxation by approxiihately three millions during the last three years, but there are anomalies in both the levies it makes and the methods by which' they are applied. In levying the. income tax, for instance, certain exemptions are made —perfectly justifiable and desirable it is at once admitted —which might and, , in our view, should be extended, more particularly in the case of elderly people who may have retired from active business life, and be living on the means they have accumulated during the long years of their working lives. There are scores, possibly hundreds of such people, scattered up and down the Dominion, who are living on incomes which represent the savings of their lifetime, such incomes being possibly limited to £4OO or £SOO per annum at the outside. In the returns they make to the Commissioner of Taxes, they are unable, to claim that the income they tints receive is what • is technically termed “earned” income, and, consequently, the 10 per cent, reduction made on incomes derived from the personal exertion of taxpayers is not deducted in their case, although actually they are taxed on savings derived from the personally earned income of their more vigorous years of life. Surely they should be entitled to

class tlie income derived from the savings of years as “earned,” and thus secure the 10 per cent, reduction allowed to 'other taxpayers. Another matter which the Minister of Finance might well take in hand is the abolition of the gift and death duties on amounts contributed, or bequeathed, to charitable institutions, or on behalf of patriotic and public purposes. Why should gifts or bequests, made by public spirited citizens, for such purposes, carry what is actually a penalty in the shape of taxation? Take the case of a man who devotes a sum ct, say, £SOOO or £IO,OOO to educational purposes. On the former amount either the institution’ receiving the gift, or the donor, would have to hand over a sum of £250 to the State. In the latter case, the State would take £750. Yet the gift would, in itself, be a help to the State, by increasing the amount available for educational purposes. The Commonwealth Government exempted from income tax all gifts made during the war to patriotic funds and contributions to the Repatriation Department. It also exempts gifts exceeding £5 to charities. The Victorian Government exempts from income tax all gifts over £2O each to Victorian public institutions. Queensland has gone one better, by exempting all cash contributions of £2 and over to its patriotic funds, and any . contributions to Queensland charitable institutions. Western Australia, exempts all “payments made to trustees of charitable institutions, parks, reserves, university, public schools, libraries, art galleries, museums, or other institutions for public education, recreation, or enjoyment.” Should not New Zealand do the same, and thus encourage public benefactions? The gift duty, however desirable in the case of private benefactions, should have no place in those of a public character.