THE YIELD OF TAXATION.

New Zealand Herald, Volume LXVIII, Issue 20890, 4 June 1931, Page 8

THE YIELD OF TAXATION.

The amount of taxation collected under the United Government's legislation in 1929-30 was £19,471,000, which was £2,330,000 more than in 1927-28 and the highest figure since 1920-21. when the customs revenue was inflated by exceptional and incalculable conditions. In his Budget last year the .Prime Minister asked for £20,070,000 of taxation —excluding the unemployment levy. The actual receipts, according to the gazetted accounts, were £18,599,980, or £1,470,000 less thjin the estimates. They are classified under seven headings; five sources failed to realise expectations, the aggregate deficiency being £1,526,000, and only two—film hire tax and income tax — yielded more than the estimates, the excess being £56,000. Customs duties fell short by £925.000, beer duty by £40,000, stamp and death duties by £303,000, land tax by £95,000 and even motor vehicles taxation yielded £75,000 less than the forecast. The film hire tax was an experiment and the calculation of its proceeds necessarily speculative, so that it is not surprising that the actual result, £41,756, fell between the first estimate of £30,000 and the later forecast of £50,000. All the other taxation was cast on orthodox lines, the only departure from former practice being that the Government increased virtually every tax in the schedule. The novelty of its experience, however, was that instead of the yields uniformly surpassing the estimates, that occurred only in the case of income tax, which produced £4,003,605, the highest figure since 1922. Moreover, it represented 2U per cent, of the total taxation, which is the highest proportion since 1924. Both Budgets presented by the United Government have been based upon proposals for increasing taxation. The first succeeded in adding £1,640,000 to a burden which had previously been regarded as intolerable, and which the United Party pledged itself to reduce. In the second, it attempted to add £600,000 more to that burden. It has failed to do so because it had passed the limits of taxation. There was no longer any question of the country's ability to bear the burden. The Government was warned and the results have proved that the national income had been so severely depleted that higher rates would yield diminishing returns. Yet the Government is proceeding on the assumption that it will be able to collect this year a larger amount than it was able to raise last year, when the country was relatively more prosperous.