TAXING THE TAXES

Nelson Evening Mail, Volume LXXII, 8 September 1938, Page 9

TAXING THE TAXES

ANOTHER INJUSTICE The tax which is to be imposed on company profits for the benefit of social security finances includes a further instance of a practice that has grown up in the past few years, taxing fanes v/hich are paid out as other forms of taxation (says the “New Zealand Herald”). If company dividends were taxed in the hands of the shareholders, this would not obtain. If land and income tax were paid in the ordinary way by companies and the remaining profits distributed in dividends, which the - shareholders would return as income for the social security tax, obviously the tax appropriation would escape. Now it is to be brought into the net. Companies already pay income tax on the amount charged against them as land tax. Presently they will pay social security tax on it too, as well as on the amount paid in income tax. They will also pay income tax on the sum represented by the shilling in the pound social security tax. The law requires it at present, and there has been no suggestion that it should be altered. Another annual taxing bill has just appeared in exactly the same form as that of last year. Obviously there is to be no amendment of the law governing these taxes, so that the social security levy will begin next year with the legal authority for taxing the taxes in full force. The effect of the charge as a whole on companies in restricting enterprise and eventually reducing the field of employment has already been emphasised. The double taxation is merely an added feature, but the resort to such means for raising revenue indicates how desperate the search for funds to finance the social security scheme has become. It is likely to grow more desperate still. The future may quite likely see nothing taxable left untaxed, with the requirements of this unwieldy social security scheme still not fully met.