A REVIEW OF TAXATION.

New Zealand Herald, Volume LXIII, Issue 19405, 13 August 1926, Page 10

A REVIEW OF TAXATION.

Having refused to make any reduction of taxation this session, the Minister of Finance has now announced that a revision of the customs tariff is to be undertaken next session, and that this may be extended into a comprehensive review of the whole range of direct and indirect, taxation. This statement apparently implies that the Minister adheres to his decision to maintain the existing taxes unaltered this year, and does not even propose to explain why he is unwilling to take the risk of granting some relief. The existence of a balance of £4,428,000 in the ordinary revenue account, which was completely ignored in the

Minister's Budget calculations, is qsubstantial challenge to his contention that the Treasury cannot afford to reduce taxation, and however excellent his intentions may be for next year, their realisation will not lighten present burdens on the taxpayers. They have good reason for being sceptical regarding such promises of revision of the incidence of taxation. Four years ago a committee made an exhaustive inquirj' and presented a report to Parlia ment; two years ago, a Royal Com mission traversed the ground in greater detail and presented a re port to Parliament. For all the practical effect their recommendations have had upon the policy of the Government or the deliberations of Parliament, these reports might never have been made. There is some consolation in the knowledge that Mr. Stewart does not propose to set up another commission, but intends to study the whole subject of taxation himself, with a view to laying proposals before Parliament. So much time as he will be able to devote to the task during the interval will not be too much to discover even equitable solutions of outstanding anomalies. Whether, after such a thorough examination, he will propose any radical depar tures in the present system may be doubted. No one can examine th* operation of existing taxes without concluding that the fundamental evil is not the method but the weight of taxation, and that such modifica tions in incidence as are desirable will be made more easily when the burden to be redistributed is lighter The question whether incomes should be taxed on a different method cannot be positively determined; only a timid Treasury opposes the contention that the taxes should be reduced. It is difficult to determine whether the operation of the customs tariff is equitably balanced, but there is no doubt that its aggregate effect is oppressive and that by a simple modification of the existing duties the Government could both give relief to the community and materially encourage trade with Britain. No objection can be offered against the Minister's decision to postpone action in regard to the complicated problem of the principles of taxation, but there, are the weightiest reasons for expressing disappointment at his persistent refusal to consider the possibility of immediate action upon the simple question of using available resources to reduce taxation this year.