TAXATION PROPOSALS

New Zealand Herald, Volume LXX, Issue 21404, 31 January 1933, Page 8

TAXATION PROPOSALS

The estimates given by the Minister of Finance show that, on the present basis of taxation, he can count upon a revenue of only £15,750,000, the lowest since 1916, whereas expenditure is forecast at £25,600,000, a greater amount than in any year since 1925. Since about £4,000,000 of the appalling discrepancy is attributable to the direct effects of the exchange policy, from which the country is promised only visionary benefits at some remotely distant period, it is apparent that the people of New Zealand are being asked to pay a very heavy price for practical experience of methods that have been proved disastrous wherever they have been allowed to reach their logical conclusion. The actual increase in Budget expenditure is not the worst effect of this policy. There are also the disorganisation of revenue, admitted to be inevitable, and the consequent social and economic disorganisation created by efforts to collect supplementary revenue. The Government proposes £2,400,000 of such taxation. That would involve increasing the estimated customs taxation by nearly half, or almost doubling income tax. As it dare not propose either method, it endeavours to conceal the enormity of its demands by creating a new form of taxation, the sales tax, hoping that its widespread incidence will disguise the intolerable magnitude of its exactions. The method of collection will not make the slightest difference in the weight of the burden, but it will aggravate the difficulties 'and disturbances to which business in New Zealand has already been condemned by the Government's actions, and a large proportion of the revenue will be wasted in the operation of the vast, complicated organisation necessary to enforce the tax. If £2,400,000 of taxation are essential to the Government's policy, and a sales tax is an essential factor in the new taxation plans, there are two absolutely conclusive reasons for abandoning that policy and resorting to methods more rational in principle, more certain in their benefits and more tolerable to a community already impoverished by excessive taxation.