DOMINION TAXATION.

Manawatu Standard, Volume LVII, Issue 153, 31 May 1937, Page 6

DOMINION TAXATION.

A striking feature of the national accounts is the amount of taxation that was received by the Treasury in the past financial year from a people already very Heavily taxed. 'The total was £26,941,000, and an examination of the figures under this heading since 1931-32 is arresting, in that financial period the State took from the oeople £16,188,171, and though in the next year there was' a slightly smaller return, ■due to the greatly diminished national income, since then there has been a steady rise, with a steep one in the latest period. In 193 D-36 the figure was £21,554,397, so that the increased taxation now amounts to £5,386,000. It will be recalled that the Minister for Finance budgeted for a surplus of £13,000, and the realised surplus was £472,000 in round figures. The acting-Prime Minister accounted for the increase by certain savings in expenditure, but as we pointed out non-realisation of a sum budgeted for expenditure does not actually constitute a “saving,” for it would be a simple process for any Minister of Finance to create a “surplus” in this way. In strict terms 'the surplus was due to the very heavy return from taxation which in turn arises from its very high incidence. ,In fact, the increased yield was nearly £5,000,000 in excess of the amount of the realised surplus. It must be noted, also, that the figures quoted do not take into consideration the money arising from the wages and income tax payments for the Unemployment Fund, which is a very substantial sum and is not yet disclosed. Last year taxation was increased (though times had considerably improved in comparison with previous years) in spite of the Prime Minister’s statement made during the election that the limit had been reached and that a reduction was necessary. There are fears now that in the next session of Parliament the process will be repeated. The Government must soon learn, however, that there is a limit to this dangerous trend. The greater the taxation the less money there must be for industrial "development, and people of medium menus with money invested will find their Spending power severely curtailed. Once the source of taxation is affected the revenue therefrom must decline. The depression proved that, and a continuance of the present policy must tend to dry up the source.