EXCESSIVE INCOME TAX.

New Zealand Herald, Volume LIX, Issue 18088, 12 May 1922, Page 4

EXCESSIVE INCOME TAX.

Since there is an overwhelming mass of evidence to tho contrary, it is distressing to find the Prime Minister still protesting that the payers of income tax in New Zealand are in a better position than the payers of the combined Federal and State income taxes in Australia. Comparison in respect of a selected figure, such as Mr. Massey used in his Feilding speech, is not instructive, and may be misleading. Thus in the ease of Queensland, to which he referred, the rebate for earned income is very much higher than the New Zealand allowance of 10 per cent-, and the taxation of companies is based upon the excellent principle of graduation according to the rate, not the amount, of profits. But the only reliable guide to the relative positions of taxpayers in the two countries is the actual amount collected in proportion to population. In the year ended June 30, 1921, the Commonwealth and all the State Governments collected in income tax £24,286,498. On the basis of the census, this amount was equivalent to £4 9s Gd per head. But the New Zealand income tax for the year ended March 31, 1921, was £8,248,945, which is equivalent to £6 id per head of the census population, or more than 50 per cent, above the Australian rate. Even the last year's collection, £6,002,957, is at the rate of £4 18s Gd per head. Nor does Australia balance the difference by higher rates of other taxation. The total amount, direct _ and indirect, levied in Australia in 1920-21 was £12 18s Hd per head. New Zealand taxation amounted to £18 9s. The disparity is partly explained by the fact that the Dominion's policy was to obtain the maximum yield of taxation in times of inflated prosperity to create assets against the war debt. But the Government has made the mistake of carrying on this policy long after the country could afford to make contributions on such a. scale toward debt redemption, and in the last year has used a super-war scale of taxation to pay for purely domestic administration.