CAPITAL LEVY.

Manawatu Times, Volume XLIX, Issue 2195, 12 August 1925, Page 3

CAPITAL LEVY.

MR, R. COBRE SPEAKS AGAINST THE PROPOSAL. The weekly meeting of the Palmerston North Lunch Club yesterday was presided over by Mr. C. F Spooner, when an address on the “Capital Levy’’ was given by Mr. R. Cobbo, of Fcilding. Mr. Cobbe introduced his remarks by stating that sometimes amongst business men there was a go-slow policy adopted with regard to burning questions and they gave practically no time to the consideration of new ideas This whs to be regretted, because just at present there were some very great ideas let loose in this country. The effect of the Great War had been to multiply the many problems that beset people everywhere in the world and to clog the machinery or progress. But fortunately the world could always produce men who would rise to power and bring forward new ideas for the annihilation of all setbacks to prosperity. France was a conservative country anr for centuries was the stronghold of those who followed in the footsteps of tradition, but quite recently the Government had tottered because it had advocated the capital levy system of taxation. The scheme was wow flourishing in England and the speaker stated that some day would give forth its fruit. It would not be long before it reached New Zealand and It was his desire that New Zealanders should be prepared to meet it. The scheme had its benefits, but also its limitations and pitfalls. It was proposed under the capital levy scheme to make a direct levy on the capital value of all estates over £SOOO in value. It was further suggested that a portion of the levy would be paid by the surrendering of all Government bonds and that mortgages would be transferred to the State as security for those liable to the levy. This scheme paid the speaker, looked very simple in its operation. It was a scheme that would appeal to any who might be suffering from financial disabilities. When a man’s capital was affected it w'as very important that such schemes should be thoroughly looked into. In the first place, it must be remembered that the interest on the country’s national debt was found through taxing the profits derived from the employment of capital; but if the capital employed was reduced, the profits available for taxation would also be reduced as well as the income tax and death duties. The speaker said he had purposely men- j tioned death' duties, because he could | recall instances where estates hadj been detrimentally affected by this levy. Business men as a rule made provision for death duties by way of insurance and the institution of reserve funds. The strongest advocates of the capital levy admitted, however, that no such provision could be made under their ,scheme. Direct taxation was a relic of the middle ages and ha did not think the ordinary every day reasonable citizen would advocate a return to those days. If the capital lew scheme was adopted, the country.

would be returning to conditions that had been' buried years ago. If they did, they would bo promoting a condition that would result in no end of trouble. The capital levy would result in an army of officials supervising a great variety of business. It would fall on the State to finance new business and strengthen the failing ones. The scheme suggested in England would involve a levy of 25 per cent of the total value of all estates in England over £25,000. It was surely not necessary to elaborate on the confusion that would follow. The State could not manage as efficiently and profitably as a private owner and it was humanly impossible for any one man to become conversant with a multitude of professions and trades. Then, said the speaker, there was another point of view that should not be overlooked. It was the ease of the man who spent all his earnings on luxury. Under the capital levy, ho would escape taxation, while the thrifty man would have to pay. Such a scheme was entirely unfair. The Swiss people had rejected a similar proposal on the ground that it militated agaist business and commerce and would result in unemployment. The capital levy struck at the very root of equitable taxation, because it taxed the means, instead of the fruits, of production. The speaker gave as the reason for tho levy proposal, the discontent that had arisen throughout the world over tho burden of taxation. He said he believed in the destiny of New Zealand and urged thus present to remember that although it had troubles and deficiencies, its prosperity was due to trials it had experitneed and the splendid manner in which they had been met. On the motion of Mr. M. IT. Oram, a hearty vote of thanks was accorded Mr. Cobbe for his address.