INCIDENCE OF TAXATION.

New Zealand Herald, Volume LXI, Issue 18680, 9 April 1924, Page 7

INCIDENCE OF TAXATION.

Sir, —Just a few words in answer to C.H.N.'s statements in the Herai.« of the sth inst. He states the Prime Minister's comparison between land and in come taxes is worthless, because they are different. Nothing of the sort, they are one and the same.- Both are income taxes, never mind what name you call them, and are collected from the returns he (the farmer) gets for his produce. Therefore, if he pays both he is paying double income tax, while the town dealeij passes all his taxation on. The land man's rates are also a direct tax on his income, produced from the land. I may state, that at a meeting in February, 1 tried to make the chairman of the Mannkau County Council see, when I complained of excessive rates, that values, a3 he stated, were not the cause of high rates* and never will be. But lam sorry to say he did not want to see it. The county wants, say, ten thousand pounds. Then a one penny rate at £90 value per acre will meet it, but if the value is only £45, then strike a two penny rate, and so on. This is simple enough for any one to grasp. It is the sum total they want, and be sure they will, get it. The same applies to land tax. If more was wanted on a lower value we should likely get a demand for twopence in the pound sterling. The value is created by tha hard-working farmer, and the community has precious little do do with it. Wiri. ' -G. F. Deuce.

Sir, —I see that two of the members of the Taxation Commission have already pronounced themselves in favour of abol j ishing the distinction between "earned'* and "unearned" income. One of them, Mr. W. D. Hart, has been very prom' inent in protesting against the injustice of taxing companies. He "is doubtless a very good man at his own business, but I venture to say that his attitude on the above two aspects of taxation shows that he takes a partisan, not a judicial, view of the question. Take the man who "earns" his income. His capital is his ability to earn; that is, health, skill, and all that goes to the "earning" of an income. This is a wasting asset. If Mr. Bart had a plant he would expect to be allowed to write off something for depre-< elation, but he would net permit the man who "earns" an income to write off anything. Mr. Hart would be in his place pleading the case of companies before a Judge or Judges; he has no right to judge on taxation as it affects people whose position he evidently does not understand. Square Deal.

Sir, —A large number of people" base their premises on a wrong foundation when considering the incidence of taxation, In regard to primary producers, as compared fwith the business man. The two cannot in fairness be judged on the name basis. Neither is the value of broad acres created by the people as a whole, but by the applied industry of the producers combined With the productivity of the soil. If that, is not so, then, conversely, the people sis a whole created tha slump" recently experienced in the value of land in New Zealand, which, of course, is absurd. The slump was created by the fall in the nrices obtainable for the producers' products from the land. > These facts will no doubt help superficial observers to realise that, to oe fair all round, the producers have to be considered from a different point of view than the business man, who can nullify the incidence of taxation by charging an extra late of proßt on to his goeds, which is paid by the people as a whole. This, of course, includes the farmers, who have no opening to charge any extra cost to them from whatever source arising, as their products are controlled by the world's . markets, over which they .--have no control, and, therefore, cannot, like the business man, -pass it on to somebody ease's shoulders, and then grumbla at having to pay an income tax, which they have in effect already impounded • from the people as a whole. The undisputable fact is that the producers pay all the taxes, directly and indirectly, and, ; although admittedly a business man's income 's the result of personal exertion, his personal exertion would bring bun ■•■ very little if the producers did hot create a foundation for his exertions to operate upon. Therefore, while not advocating that wealthy producers should escape all taxation, I contend that a liberal exemption over and above business men should be accorded that section hi tbs ; community which create?, the prosperity, enjoyed by the whole people. Business peonle :.re prone to imagine that they.aja.? the" hub of the universe; but any 01.l icolonist cm tell them how easily trog could be dispensed with as against tin producer on tin tad.