THE LIMITS OF TAXATION

Nelson Evening Mail, Volume LXIV, 31 May 1930, Page 2

THE LIMITS OF TAXATION

MUST BE SOME FINALITY

Concluding its reviewing'of the British Budget, the "Economist" said: Mr Snowden's raising of the standard rate of income tax has the considerable merit of having brought home.clearly and forcefully to the nation that it has moved on to a higher basis of expenditure, for this tax has universally and quite reasonably come to be regarded as the barometer of .the public finances of the country. His action in this matter must be read in conjunction with the very important remarks with which he closed his speech. If business enterprise, the life force of national progress and well-being, is to grow and increase, there must be some respite from increasing burdeus, some finality in taxation. The Chancellor declared himself alive £0 this need and endeavoured to allay apprehension by declaring that though ''no man cari" speak of the future with certainty ... the steps which I have proposed for balancing this year's Budget will be "sufficient to ensure, in the absence of unforeseeable calamities or of heavy increases of expenditure, that ho further increases of taxation will need to be imposed next year." Read in conjunction with his recognition that there are limits to taxation, his statement means! in effeot, that the burdens on the direct payer have reached a point beyond which it would be inexpedient to go. When taxation becomes a deterrent to .enterprise, affects savings, creates K a feeling of "defeatism," or drives investors to invest all their resources abroad, _or leads to widespread evasion, it is time to put on the brake and to examine proposals, hot on the basis ,of whether they are desirable in themselves, but from the point of view of relative, urgency and advantage, and to decide that before new claims can be considered less essential items must be pruned from the Budget.