TAXING PHILANTHROPY.

Manawatu Standard, Volume XLV, Issue 217, 18 August 1925, Page 6

TAXING PHILANTHROPY.

The State is in some respects a hard taskmaster, especially in matters of taxation. Shy lock-like it insists on its pound of flesh. If, out of his income or capital, any citizen donates any large, or even a small amount, for charitable, philanthropic, or public spirited purposes, he is compelled by law to show the amount m his income tax return and to pay taxation on the total, or, alternately, to pay gift duty to the State. It is bad business to tax philanthropy, especially when such philanthropy serves a double purpose —that of not merely assisting people who are in need of assistance or training, thus directly relieving the State, but also of laying the foundations of good citizenship. The sums donated for war relief purposes by many of our leading citizens involved the givers in what can only be described as a penal tax levied by the State. It will be argued that the law, as it stood and still stands,, left the taxation authorities no alternative, and it must be admitted that such is the case. But it seems scarcely fair, and is certainly not generous, on the part of the State, to insist, as in the case of the Trustees of the Acknowledgment of Debt to British Seamen Fund, that, of the total of £211,791 18s lOd surplus profits, made on the re-sale of New Zealand wool by the British Government, which were to have been distributed to the 2700 sheepowners in all parts of New Zealand, but who agreed that the amount should be handed over to the fund, the State should have appropriated £34,998 9s 7d by way of taxation. As stated in our yesterday’s issue, a petition now before Parliament reviews the facts, and asks for a refund of that amount to the fund. The Hon. E. Newman, M.L.C., who was the prime mover in establishing tlxe( Debt to Seamen Fund, and whose interest in the Flock House estate, and the boys in training there, is well known, was at great pains to get the farmers to agree that their share of the surplus profits should be donated to the fund, and it must have come as a severe shock to them to be notified by the Land and Income Tax Department that they must include, in their income tax returns, the moneys they had thus agreed should be made over to the fund, not a penny of which they had handled. As the outcome of their protests, the tax was paid by the trustees from the fund itself, which thus suffered to the extent of something over 16 per cent. —the “rake off” secured by the Taxation Department. That was bad enough but when through the philanthropic action of these 2700 farmers the Flock House Estate was purchased, and the place equipped for the reception and training of the sons of British seamen who had lost their lives in the war, the Taxation Department assessed the property for taxation, as from March, 1924, at the rate of close upon £9OO per annum. If the estate were being worked for profit there would be no .cause for complaint; but it is worked purely on philanthropic lines f or the training of specially selected sons ' of British _ sailors in farming pursuits. In its way Flock House is rendering more valuable service to the community, on distinctly helpful lines, than any of our State institutions. It should be as free from the attentions of the Taxation Department as the State experimental farms and stations. But the State, through the taxation office, has not only reduced the Flock House capital fund from £211,791 to £176,798, thus relieving the trustees of some £34,998; but it is now penalising its philanthropic efforts to the extent (approxi-

mately) of £9OO per annum. The case is clearly one calling for the relief asked for by the trustees of the Elock House Fund, not only in the return of the levy on its capital, but also in respect of the annual taxation charge on the property.