The Northern Advocate Daily “NORTHLAND FIRST” THURSDAY, NOVEMBER 17, 1938. Turning The Screw On The Taxpayer

Northern Advocate, 17 November 1938, Page 6

The Northern Advocate Daily “NORTHLAND FIRST”

THURSDAY, NOVEMBER 17, 1938. Turning The Screw On The Taxpayer

Registered for transmission through the post as a Newspaper

THE Council of the Wellington Chamber of Commerce has expressed gratification at the Government’s intentions to overhaul the taxation legislation of New Zealand, so that taxes will be levied on a more rational basis. New Zealand’s taxation system is undeniably the result of years of haphazard growth, and there is some ease for an overhaul. The average taxpayer, however, would view the proposal with more enthusiasm if he could be sure that as a result of it his own particular burden would be lightened. This, however, is unlikely to be the case. Free spending is still a keynote of the Government’s policy, and that policy was so emphatically endorsed by the public at the elections that no reduction in expenditure can be anticipated. So long as the Government continues to spend freely, so long must the people of New Zealand endure heavy taxation. To aggravate matters, they will, from April 1 next, have to pay even more in taxes than they do now, for the levy to finance the social security scheme is a tax on all classes of the community, and it is only in the event of personiul misfortune that taxpayers will receive a share of it back. Just what the Government has in mind in planning an overhaul of the taxation system is not quite clear as yet. It may have some idea of altering the incidence of taxation, so as to relieve the poorer classes and take more from the rich. Actually, we have few really wealthy people in New Zealand, and they are already heavily taxed. Nevertheless, the masses of the people would undoubtedly view with equanimity any adjustments which altered the taxation burden so that others had to bear a heavier share of it. It is possible, again, that Mr. Nash may wish to collect taxes through fewer channels, even though the aggregate volume collected will be no less. At present, taxation is paid in many forms, some of them extremely irksome. The quarterly pilgrimage to the post offices to pay the unemployment levy (or registration levy, as it is now called) is a recurring nuisance, and there should surely be a simpler method of collecting this revenue. But it seems, from the outline so far given of the social security proposals, that no alteration is proposed in respect to this tax. Deduction, of the wage tax causes a great deal of extra work to employers. Housewives who employ domestic help will have experience of this after the end of next March, for the wages of domestic servants will be liable to wage tax. In addition, wage tax will have to be paid on the amount equivalent to the “keep” of those girls who live in the residences of their employers. This seems incredibly petty, but it is no more so than the insistence of the Taxation Department that bakers should deduct tax on the value of loaves given to drivers. The sales tax is another irritant to business men, and imposes a severe burden on clerical staffs. Such taxes as these not only compel citizens to pay taxes, but also make them virtually assistants to the Taxation Department in collecting them. But the yield from the sales tax is now so substantial that the possibility of its abolition seems remote, even though a promise to abolish it was given by the Prime Minister himself in a pamphlet in 1935. These and many similar small taxes, from the Government’s point of view, have the advantage that to the general public they are comparatively painless. People pay them unconsciously. Perhaps the most disturbing feature of all in recent months has been a growing tendency to harass taxpayers in order to extract as much as possible from them. Lawyers and trustee firms are well aware of the grow'th of a new spirit of “grab” in the department. It now enforces every legal claim for taxation, seemingly without regard to the moral justice of many such claims. The screw is being turned with a vengeance, and cries for mercy, even from those who think they have a good cause for some relief, usually fall on deaf ears. All this is part of Mr. Nash’s plan to harvest every penny that the taxpayers can be made to yield. Consequently, when he proposes to overhaul the taxation legislation, no one but a sublime optimist will expect any substantial remissions.