LAND AND INCOME TAX

New Zealand Times, Volume XXXII, Issue 7264, 21 October 1910, Page 6

LAND AND INCOME TAX

THE PROPOSED NEW GRADUATIONS. SOME STRONG OBJECTION. In moving the second reading of tlie Land Tax and- Income Tax Bill, Sir Joseph Ward mentioned that the additional amount it was expected to obtain under the new income graduation would be somewhere between .£75,000 and je'JO.OQO a year; probably it would actually be about .4280,000. He thought the proposed maximum was as high as they could very well go. An income tax of Is 2d in a country such as this was fully as much as they could expect to obtain. The readjustment was necessary owing to the alterations made in regard to internal and external defence. Mr J. Allen (Bruce) said he could not understand why such considerable increases were to be made in this direction unless remissions' were to be granted in other ways. Close on .£IOO,OOO additional taxation was to be imposed this year, for which he could not see the necessity. The Prime Minister should explain his reasons for asking for the increase before he could expect the House to agree to the Bill. Personally he did not object to the graduated tax at all, but he could not support the imposition of taxation which appeared to bo quite uncalled for. It seemed to him that the increased taxation upon the smaller salaries was out of proportion to the increase upon the larger ones. This surely was unfair. Mr G. W. Russell (Avon) expressed anl proval of the principle of the graduated itax. but said he did not like the manliter of its application under tho Bill. I He did not think there was any great necessity for imposing extra taxation upon iiieomee between ,£SOO and ,£IOOO, (especially as there was to bo no increase on incomes between .£IOOO and £W>O. 'The men with hig incomes were far bettor able to pay a tax of Is Gd or even fe than those with small iucomes were :to find the extra penny or so that was lihere imposed. He thought it would have I been far better to leave the taxation as ' it was on incomes up to .£IOOO, and put a fairly steep graduation from that .point u'n to .£IO.OOO. Svmpathy with these views was stated iby 'Mr W. Fraser (Wakatipu). who said he thought that the greater part of the new taxation would he paid by men with incomes up to .£7OO a year.

ADVERSE AMENDMENT MOVED. Mr T E. Taylor (Christchurch North) =aid he'was in* accord with Mr Russell. He had fully expected that simultaneously with the appearance of the Hill remissions of taxation to equal amount would he announced. ""Wo jravp remissions tho year before last, hut we cannot do it every year," said the Primp Minister. Mr Taylor went on to nrgo that the Government had absolutely no right to take from the people a single penny more than was essential for' the purposes of the State. He would therefore move this amendment — That in view of the buoyant condition of the Dominion's finances, and the surplus revenues accruing this vear over the estimated revenues, thk House while approving the pi-ineiple of a srrndnated income tax as embodied in the Bill is of opinion that no new taxes should be imposed unlass shown to be actually

required for the purpose© of government, and units,, the- increased taxation is ccccmnanied bv a simultaneous reduction" in the taxes no"" paid by the people.

The House had no right to take money flint was not reallv required. To do fo amounted to nothing k.-s than an act. tl' violence, lie molested and would always protect against piling up taxation without demonstrating that it was wanted. He wa.s amazed that a Bdl oi thi-. character fihculd be brought down and no justification of any kind Riven for the m-opc.-ed increases. The Hmiss had already Riven the Prime .Minister more money than lie eould u-:e. Whore «■» the courage of the House gone to wh.;n it could sit silent and say nothing ■while taxation was oiled up in this way? The of surivluses allowed the roads and bridges policy to be carried on to the degradation of l'arfliament. The amende unit was seconded by Mr D. McLaren (Wellington East). NO RKDUCTIOXS. The Prime Minister said the Government had boon continually making remissions for the benefit of the workers, and tliev should not be hoodwinked as to vrhat was being done. He would not do anything to decrease the financial strength of the Dominion, and bis reply to critics was that they did net understand tho proposals. The money was I to be a contribution for defence, anel he would not relieve from taxation for that purpose these who were prepared to contribute to defence. Where the Bill re- | ferred to .£-100 it referred to an income of X7OO (there was an exemption of .£300), and so on, and it "was wrong to say that the increase on the smaller salaries was greater in proportion than those over .£IO9O. A man receiving .£BOO a year would pay under the old rate ,£l2 10s, and under' the new rate £,\i lis Bd, while a man receiving .£I2OO a year would pay X'22 10s and ,£37 10s respectively, which proved the fallacy of the argument. If there was to be no graduated tax under .£IOOO where would those receiving ,£7OO come in. Mr Russell: What is Vie taxation of a man receiving ,£4OO. The Prime Minister: Sixpence! TAX LUXURIES. Mr G. Laurenson (Lyttelton) said no could understand the amendment, coming from anyone but the member for Christcihurch North. Mr Taylor had urged that the taxation should not go beyond the necessities of the State. Ver'y well, but who was to say what the State's necessities were? It was a fair proposition to pay for these necessities by taxing luxuries rather than essentials. Every sound Radical would urge that public works could be paid for, not out of borrowed money, but out of surplus revenue. The natural corollary to this would be a betterment tax which would take for tho State some portion of the increment in land values which followed this expenditure. He was grieved that such an advanced Radical had moved such an amendment, and hoped that it would be withdrawn. The Bill was going in the proper direction. Mr W. H. Herries (Tanranga) had no fault to find with the Bill, but objected that it stopped short at the wrong 1 plaoe. It did not go far enough with its graduations. These taxes had been proposed in last yeat's Budget, but had been abandoned.

,J. tQ£, y weTO not," said the Prime Minister, adding that thero were very good reasons for the course that had been 'ollowed.

air Hi. G. Ell (Christchurcli South) chided Mr Hemes for objecting- to a progressive Bill that ho had asked for previously on numerous occasions. He was gTeatly surprised at -such an amendment coming from Mr Taylor and being seconded by a member who claimed to represent labour. Money was required for very many State purposes, but where was it to come from if not from revenue? If a self-reliant policy was to bo carried out money must be raised ,by moans of increased taxation. The income tax was not oppressive, providing, as it did, for exemption up to £3OO, with an allowance of £o'i for life insurance. Tho increases on the smajler salaries were not great, amounting to £2 on £9OO. After further discussion the amendment was lost by 47 votes to 10, and the second reading was carried on tile voices-