TAXATION INQUIRY.

New Zealand Herald, Volume LXI, Issue 18709, 15 May 1924, Page 9

TAXATION INQUIRY.

EVIDENCE AT WELLINGTON. HARBOUR BOARD MATTERS.

PASSING ON THE LOAD.

THE * FARMERS' : UNION.I

[BX TELEGRAPH.-— ASSOCIATION.] WELLINGTON, Wednesday.

The Wellington sittings of -the Taxation . Commission! commenced this -morning. /.:..:,. '.';• \ : [ ?i"A statement was presented by Colonel George Mitchell, as president of the Harhours Association. ; He submitted that the present exemption of harbour boards from payment of land tax should be continued,- because in certain cases harbour boards had been granted endowments by the' Government for the purpose of assisting ' the harbour boards to establish j and develop harbours. Many harbour boards were largely dependent upon revenue received from these endowments. It ; was further submitted , that harbour boards should be allowed to retain present exceptions from income tax, as, being statutory bodies, they had to carry out Jeertain administrative functions in regard to wharves and shipping. They were not trading concerns, and did not earn profits. If boards were taxed it would mean 1 that they would have to increase dues, either on ships or goods. ■_ . ; Harbour Board Debentures.

fit was urged that the present taxation of harbour board debentures should be discontinued; because the present taxation of. debenture interest made it more difficult for harbour boards to obtain necessary money to carry out their obligations in. regard to port development.. Finally the Government, by statute, called on harbour boards to - give exemptions and concessions in many directions affecting Government goods, vessels, officials and mails. Harbour boards were semi-Government institutions, and taxation levied upon them could only be passed oh to the goods or ships, and ultimately on to the consumer. It was submitted that this taxation should be imposed at the source, and not indirectly, through the medium of harbour boards. Witness submitted a long, prepared statement, in which the following points came into prominence : — , (a) The true principles of income tax are largely being defeated. (b) There are so many exemptions and channels of escape that our system may appropriately be called the "income tax evasion system." (c) By compelling companies to gather three-quarters of our income tax rich people are ' provided wtith channels: for passing their tax on to the poor, who are supposed to be free. (d) The system thereby raises the cost of most services . and commodities, and makes living. dear. ■■■■:.(e) Land tax designed to prevent aggregation and burst up large estates is applied to small farm holdings and town sections, to which it was never intended to apply. It is thereby imposing a tax on small farmers and others with no taxable income, and which should not be taxed. ■ •-. '■■•■', •* ':'-■:■ \ . :-:§■ Principles Laid Down,

On the above grounds witness appealed for a return to tfne true principles of income tax, whereby "(a) everyone with assessable income is called upon to pay tax in accordance with that income, and not allowed to pass it on to others; (b) income tax should apply to every person in the land, and apply alike, irrespective of calling, :*. class, or section, or whether living in town or country; (c) companies should be taxed on their undivided profits, and not be made- compulsory agents for the indiscriminate collection of taxes.; They violate the principles of f justice by passing the tax on to tho poor, who should not pay. f Every investor in a- company should pay '; his own income tax according to his income; (d) land tax should not be applied to farms and holdings not suitable or capable of subdivision, nor to town sections, but solely for the purpose for vfakh it was framed, to prevent- aggregations and to burst up large estates. The amount collected in taxation from people should be the lowest amount necessary for the services and functions of the State. If we take more we are not just to those who pay;- if we take less we are not just to the State. If everyone bears,his fair share it would allow the rate of tax to be considerably reduced, r and .; make it easier for all to bear. , v -

Views o! Farmers' Union. Evidence on behalf of the Farmers' Union as a whole was tendered by Mr. W. B. Mathieson, president of the Wairarapa , branch, and ex-treasurer of the Dominion union. ". He submitted the following . 1. Wo : are ,of opinion that land tax, being a form of ■'; capital levy, ■ is'■ bad in principle, being a' class tax. We are in favour of its " abolition and that income tax should apply to incomes from all sources '"'!'■■•> ■ ■ "-" -"'■*'! .■'■'■*'".. 2. We consider that in the event of the'land tax being continued,; the special exemption should be raised to £3000, seeing that the income tax ' exemption is ,£3OO, which, capitalised, is v £6000. This suggestion for the alteration in the exemption is - based : ? upon a 10 per cent, profit on £3000 invested in land. 3. We consider i that the present system of debenture taxation should be amended "so as, to make the .levy at the same rate all round, giving no advantage to local bodies or any other section of the community. •

4. Seeing that (a) during past years the farmer borrower has been penalised under the present' system, (b) the prosperity of the. Dominion so largely depends on the primary producer, (c) the settler ment of unoccupied lands. is so vital, we consider that if any'differentiation be made it should be in the direction of encouraging investment in ; rural -securities. It was added by witness that there was a strong feeling in the Farmers' -Union that company- taxation was thoroughly unwise and- :< should be either diminished or . abolished, but no decision had been arrived at as to the percentage of, immediate reduction favoured. •; - ■ "