THE OTAGO DAILY TIMES MONDAY, AUGUST 5, 1929. THE TAXATION PROPOSALS.

Otago Daily Times, Issue 20787, 5 August 1929, Page 8

THE OTAGO DAILY TIMES MONDAY, AUGUST 5, 1929. THE TAXATION PROPOSALS.

Sir Joseph Ward has certainly succeeded in providing 1 the' taxpayers with food for thought. New Zealand is already a highly-taxed country. It was recently calculated that, as" compared with the pre-war period, the taxation collected through the medium of Customs and excise has increased 140 per cent., the taxation of the land 50 per cent., the taxation of incomes 491 per cent., the death duties 209 per cent:, and other taxes 354 per cent. The total taxation in 191314 amounted to £5,918.034, which was equal to £5 10s per head of the population, including Maoris. Last year the total was £17,833,135, or £l2 4s 4d per head. It is not generally supposed that the system of taxation that was in force in 1914 was one that let the taxpayer off too lightly, but if it did not the present taxation is exceedingly burdensome. Yet it is proposed by the Government to clap on a fresh load, in the first place by the imposition of a supertax on land and, in the second place, by increasing the primage duty from 1 per cent to 2 per cent. If it is contended that the persons and firms upon whom these taxes will fall will be unable to shake off a portion of the burden so that it may have to be borne by the general community, the argument is’ one that is certainly not supported by economic -reasoning or by ex-

poricnec. While the primage duty has remained at 1' per cent., the transference of it from the importers 'on whom it lias been levied in the fh-st instance to the public may not have been very perceptible, but there will be few people who really imagine that it. has not been effected in some way or other, and it is impossible to suppose that, when, or if, the duty is doubled the tax will not be passed on to those whom the imported articles that hear the duty eventually reach. It is only necessary to consider the amount of revenue that will be yielded by the duty in order that this may he realised. Sir Joseph Ward is reported to. have said that the additional 1 per cent, of primage duty would produce about £200,000. At no time in the past half dozen years has the 1 per cent, duty brought in less than £400,000. In 1925-2 Git yielded £482,9/3 and in the following year £466,740. A primage duty of 2 per cent, may reasonably, therefore, be expected to produce between £BOO,OOO and £900,000 at a conservative estimate, and. it would be foolish to expect that - the importers will make a contribution of this magnitude to the general revenues without making sure of reimbursing themselves at the expense of the community. ; As to the supertax which is to be imposed on the owners of farming lands of an unimproved value ■in excess of £12,500, the- point is being'strongly made that the additional taxation wiil press, with crushing severity oh a number of farmers who arc at the present time having a groat deal of difficulty in the effort to make both' ends meet. There arc owners of large properties who have been fortunate enough to escape under the existing law with ' smaller taxation than their rctiirns from', their wool clips in a succession of favourable seasons would have warranted the Government in collecting from Ahem. No doubt the. feeling that these land-' owners- have not been contributing their fair share, as it is called, to the public revenues will create satisfaction in eertaip quarters that a whip is now being prepared for their > backs. But the supertax will be imposed upon them at a time when there is reason, to anticipate a sharp reduction in the price of wool. . And 'if this anticipation is realised the fresh tax may bear hardly upon many of the .fanners who will be included in the’ net which Sir Joseph Ward is spreading. The available statistics do not show the number of payers of land tax, whose holdings ave o£ an unimproved value of £12,500 and over, •There are, however, 4198 holdings of an unimproved value of £IO,OOO and, over, and of these 2218 are of a value of £15,000 and oyer. .The number of holdings, comprised in the successive categories of value between £15,000 and £IOO,OOO declines steadily, until, in the category of the highest value—that of £IOO,OOO and over—there are only 38, but it is ; probable ttiat the majority of these are urban lands, owned by trading companies, which' will be exempt from -the proposed supertax. Actually, the banking, insurance, and finance group of land * ‘ owners', ■ whose properties arc mainly ' held in the cities and. towns, has easily the highest average of unimproved value—an average that in 1926-27 was nearly fifteen times as high as that shown' by the farming group and more than sixteen times the average for all returns. It seems probable that; in varying degree, the supertax will fall’ not only upon the t ,owners of the largest properties, against whom it is specifically ; directed, hut also upon a considerable number of holders of moderate areas. The proposal to reduce the mortgage exemption in the assessment of, land tax from £IO,OOO to £SOOO seems, indeed, to ensure that the fresh load of taxation shall be extensively distributed among the ‘farming community. As far as we have been able to observe, the only excuse that lias been offered for increasing the taxation of , the country is that the Government requires the money which the taxes,will yield. A deficit may be met, however, by reducing expend! ■ ture as , well as by increasing revenue Probably it "has been concluded that fewer people will be offended by an increase of'taxation than would be if savings were effected.