RED FINANCE

New Zealand Times, Volume XLIX, Issue 11251, 1 July 1922, Page 4

RED FINANCE

Mr Holland, Leader of the Parliamentary Labour Party, yesterday made a suggestion which requires consideration. Speaking to his amendment on the motion for Supply, he went deeply into finance, to seek a measure of relief from the consequences of the present adjustment of taxation. The panacea he discovered is the imposition of taxation on the reserves of the financial institutions of this country. Being accumulated profits, they paid income tax before going into reserve, and they pay income tax every year after on the income they make from earnings. As they axe not converted into bullion, neither are they locked up in safes to Repose in idleness, they must come under the eye of the gatherers of income tax. But Mr Holland insists that they must pay tax. As they already do pay income tax, and as he must be presumed to be aware of the fact, one naturally wants to know what be means by that taxation demand which he presses. Apparently he means a tax additional to the income tax. On what grounds can he ask for that? The only ground visible to any. eye not seeing red is the mere existence of these accumulated funds, which, by the conditions of their existence, are under income tax obligation. By way of euphemism, the proposal may be called a super-tax on profits. And as the “Red” doctrine is that there must be no profits—“no production for profits,” is the phrase used —this new demand closely resembles the confiscation of the capital that makes profits. It is a far-reaching doctrine. It begins with the confiscation of some part of the capital represented by accumulated profits. Here we have the principle of confiscation applied. Logically, there is nothing to prevent the small levy of confiscation from being gradually increased, and by swift grades, until the whole goes into the State coffers. Neither is there any logical reason why the confiscation applied to that part of capital which is an accumulation of profits should not be extended to all capital of which the ownership is so much denounced by the political thinkers whose colour is red or reddish. Such extension would put the country into the same position as Russia is in now, through the confiscation of capital on the Marxian nonprofit lines. Lenin, the only leader who has carried Marxianism to the fullest possible extent, has confessed that this has ruined his country, and the Soviet Government is doing all it can to obtain the help of much-abused capital to build its country up again. Such is the way of the confiscation principle. If Mr Holland Is not advocating the application of that principle, he is only asking for something to be done which is already done. Is, then, his i financial panacea Confiscation or Nothing? Mr Holland has got into an awkward dilemma—one born of which is ignorance headed for disaster; and the other mere futility heating the air. It is particularly awkward for the leader of a party aspiring to govern the country on the new lines of production for use, transport, and distribution. It raises the suspicion that the same dilemma has got its horns into every plank of the party led by the men who have now to declare financially between sure disaster and mere futility.