MORE PRODUCTION

Otago Daily Times, Issue 27211, 14 October 1949, Page 6

MORE PRODUCTION

INCENTIVE SUGGESTED V GENERAL REDUCTION OF INCOME TAX VIEWS OF AN EXPERT A general reduction in income tax would be a definite means of increasing production in New Zealand, said a Dunedin taxation specialist when approached by the Daily Times. He was invited to comment on a suggestion made by a practising secretary at Invercargill that, to encourage increased production there should be no taxation on income above a certain figure—say, an average based on the returns of the previous three years. He did not agree with the Invercargill suggestion the Dunedin man said. There would be too many anomalies. There would be no benefit to .workers oh fixed salaries, and there Was the question of how businesses that had incurred a loss in the past three years would tye affected. Some big concerns might treble their incomes in a year. The results would certainly be astounding in some if income beyond a ,certain figure were tqx free, but an increase in production generally would not be achieved. If, however, there were a general reduction in the rate of all income tax, the incentive to earn more and to produce more would be provided lor ‘everyone, the Dunedin man said. Many people slackened their efforts at present after they had earned a certain amount, because they realised that further efforts would be robbed of reward by the rising scale of taxation. If this increased scale were abolished, for instance, and the same rate of taxation charged on all income, there would be undoubtedly an increase in primary and secondary production. A reduced rate of taxation, in any case, would encourage all workers, and all employers, as well, to increase their production.