LOWER TAXATION.

New Zealand Herald, Volume LX, Issue 18324, 14 February 1923, Page 8

LOWER TAXATION.

In attacking the Government on taxation, the Leader of the Opposition chose a line of argument lending itself readily to his purpose, although it does not necessarily involve the conclusion that, as a party leader, he would have the country infer. There is no doubt that existing taxation operates adversely to the supply of loans for pastoral and agricultural development. In Mr. Wilford's phrase, the farmer is starved, . investments being attracted to other channels because of their relative freedom from a financial impost. Who would lend money on mortgage, for example, at 6$ per cent, with a taxation reduction on the basis of 7s 4d in the £, leaving only £4 2s 4d per cent., when taxfree bonds, bought even at par, yield £4 10s Od'i' Such comparisons, and the problems met in the taxation of joint stock companies, furnish ammunition readily for attacks upon things as they are. But Mr. Wilford's assumption, that these things and the dissatisfaction they engender justify attempts to overthrow the Massey Government, is quite gratuitous. It does not follow because we are passing through a period of heavy taxation that the Government of the day must be driven from the Treasury benches. It is open to sincere supporters of the Government to urge the necessity for modification in taxation: indeed, they have done so. Changes are imperative; the burden of taxation must be reduced, and in the process the maximum of the graduated tax must be lowered. But to achieve this end there is no necessity to transfer the whole legislative and administrative leadership of the country from Mr. Massey, who has shown practical knowledge of the need for relief, to Mr. Wilford, with his negative criticism and idle suggestions. For what does Mr. Wilford propose as an alternative to the present system of taxation? The adoption of a purely "individual" form of tax, an idea that has been examined and found to entail, on present needs, a rate of taxation so high that no Finance Minister, even a Liberal, could venture to impose it. Negative criticism is always easy, but Mr. Wilford's alternative shows how unhelpful and irresponsible it can sometimes be. One benefit may result from it, however. It may hasten the Government's announcement of a reduction of the whole burden of taxation. For that the country is waiting. The present Administration's desire to help the farmer can, and should, be made quite clear. The reduction of the maximum tax to 5s in the £ ought to be promised for next year. In every feasible way encouragement should be given to the saving and lending of capital essential to enterprise and development.