THE BURDEN OF TAXATION.

New Zealand Herald, Volume LXVIII, Issue 20807, 25 February 1931, Page 10

THE BURDEN OF TAXATION.

There are two points in connection with the Government's financial programme, recently announced by the Prime Minister, to which sufficient attention has not been given by those who have acclaimed it as a bold and courageous policy. The first is that the necessity for remedial action has been apparent for many months, and only now, when the. ship of State is in imminent danger of capsizing, according to Mr. Forbes' admission last week, are efforts being made to shorten sail. The other is that the Government proposes to maintain an intolerable burden of taxation upon a community whose income has been reduced by many millions. State taxation in 1927-28 amounted to £17,145,000, and the rate per head, £ll 17s 7d, was the lowest since 1919. There was an increase in 1928-29 to £17,832,000, while the ratio rose to £l2 4s 3d. These amounts werp dangerously oppressive, and the consequent discontent was eagerly exploited by the United Party with its electioneering promise of reductions in taxation. The result of its first Budget was to increase the total amount of taxation to £19,471,000, equivalent to £l3 3s 7d a head. Thus the United Government added more to the burden of taxation in one year than the total increase in the previous five, years, the sum of its exactions constituting a record except for the abnormal figure of £22,184,000 in 1920-21, which was due to the extraordinary inflation of customs receipts. In May of last year, in the statement issued immediately after he became Prime Minister, Mr. Forbes said "contraction of the national income means that we must curtail our demands, both privately and nationally." Yet, in the Budget, he demanded over £20,000,000 of taxation, in addition to which must be counted some £300,000 representing two instalments of the unemployment levy. The actual receipts will be substantially less than the. Budget estimates, but the Government will be gravely embarrassed if they are less than £19,500,000, exclusive of the levy. Outlining the next Budget, Mr. Forbes showed 'that customs revenue, income tax and stamp duties would fall £2,800,000 short of last year's estimates; he proposes to obtain £1,750,000 by additional taxation and postal charges. In addition, there will be a full year's charge of £600,000 by way of unemployment levy. Thus, the country is invited to agree to taxation amounting to £19,550,000, which is almost as much as it has had to pay in the current year, and two millions more than were collected under Mr. Stewart's last Budget. In effect, the Government proposes to balance the Budget by imposing taxation so utterly disproportionate to tiie national income that the econojmic vitality of the country will be paralysed., j