TAXATION OF COMPANIES’ INCOME.

Otago Daily Times, Issue 18293, 9 July 1921, Page 13

TAXATION OF COMPANIES’ INCOME.

TO THE EDITOR. Sin, —I liavo read Mr R. Finch's .letter appearing m your is-ue ot tile Bth. 'lake the he ([uotes. Assuming the incidence oi taxation were altered in accordance with tile idea.s expressed in the pamphlet to which ho refers, it seems to me the position would ho as follows: —Preference shareholders could receive the.r £15,000 free of taxation just as they do at present, while the ordinary shareholders would receive £43,000 —that is. over l?i per cent., hui this would he subject to taxation. Suppose one of the ordinary shareholders had 500 shares he would get £o7 10s, and if his total income wore under £3UO he would pay no income tax. Suppose a wealthy man had 100,000 ordinary shares he would get £17.500. bnfc would have t, i pay income tax, and it would not hurt, him if he had to pay 10s. or even more, m the £. Thu (-'overnmont would get exactly the same amount in taxation, but it would be a case of letting the small shareholder off altogether and taxing the big man up to the hid. At present all the shareholders, the £O2 man and the 100.000 man, pay at 11,0 same rate. What the pamphlet advocates is; “ Do not penalise a lot of people who join together in a joint stock or coojierutivo company.” The pamphlet, does not say, ” Reduce (he taxation of the wealthy : it advocates charging taxation in a proper ratio—not on the rich ami poor ui the same rate. As for the instance Mr Finch gives about rt men forming h's business into a company, making a profit, of £IOOO and only paying £3OO as dividend.-, that gentleman could bo quite easily dealt with by making a company pay income tax on its undivided piofits. I have yet to hoar that, any of the stock and station firms exploit their customers. Private firms have to render as good service as their competitors, the farmers’ cooperative companies, and Mr Finch door, not enrols - suggest that the farmers’ companies arc run for the purpose of exploiting the farmer. The less Mr Finch says, therefore. about the ‘'milk of human kindness” the belter. —1 am. etc., Dunedin. July 8. Fair Plat.