INCIDENCE OF TAXATION.

Otago Witness, Issue 3613, 12 June 1923, Page 6

INCIDENCE OF TAXATION.

SIR JOSEPH WARD’S CRITICISM. REPLY BY MR MASSEY. CHRISTCHURCH, June 6.' With reference to a letter in the Press to-day from Sir Joseph Ward, Mr Massey made some observations before leaving Christchurch 10-day. “Sir Joseph Ward’s further statement,” Mr Massey said, “is very different from that winch he mado in Southland recently. He now admits that my contention is correct—namely, that in England there is, and has been for some time past, a super-tax of 6s in the £, and that this has not been reduced. This means that the taxpayers in England to-day are paying double what will be paid in New Zealand during the present financial year. He says that the plutocrats pay it. Who are the plutocrats - / They are the people who are able to pay it. All the recognised authorities in economics have repeatedly stated that nothing interferes with the prosperity of a country so much as the imposition of a heavy taxation which the people are barely able to meet. Sir Joseph Ward when he resigned office as Minister of Finance in the National Government left the maximum income tax in New Zealand at 7s 6d in the £. It became necessary for the Government in the following year to put it up to 8s 9d on account of the extraordinary liabilities which had been left for us to meet, but I commenced tho very first year by doing away with the land tax on mortgages in the case of the smaller men of the country, and last year we lowered the maximum income tax to 7s 4d in tne £. We also increased the concessions very considerably to men with families, and this year, unless something unforeseen happens, which I cannot think of. we shall be able to reduce the maximum income tax approximately to ss. as well as lowering taxation in other directions. Sir Joseph Ward refers to the fact that at the last revision of the Customs taxation the latter was increased. True, but this again was to meet the extraordinary liabilities which had been piled up on account of the war. The Customs taxation was increased mostly on luxuries. For instance, the duty on spirits was increased from 18s to 36s per gallon, and the beer duty was raised proportionately. There Vlas also an increase in the duty on tobacco and on motor cars from countries outside the Empire. Great Britain increased its duty on spirits to 72s a gallon as compared with our 365, and its taxation on tobacco and motor cars is very much higher than in New Zealand. They havo also a heavy tax ori tea and sugar. It is true there is a small tax here on both these commodities. but I hardly think there will be much of either tax left when the approaching session of Parliament comes to its conclusion.” After referring to other financial matters. Mr Massey said, in conclusion : “I should just like to thank Sir Joseph Ward for the opportunity he has given mo to clear up some of the more or less important points connected with the finances of the country. At present I am quite certain that after having studied my replies he will join me in thinking that the eountry has good reason to congratulate itself on the improved financial position which the dominion now enjoys, and also upon fne outlook for the future.” SIR JOSEPH’S REPLY. WELLINGTON, June 7. To a Times reporter to-night Sir Joseph Ward affirmed as incorrect Mr Massey’s statement that in England there had been for some time a supertax of 6s in the £, and (his had not been reduced, which meant the English taxpayers to-day were paying double what will be paid in the dominion during the present financial year. The English fax was chiefly individual. Last year the dominion companies paid 72 per cent, of the total tax. and individuals 28 per cent. The companies in the dominion were widespread, and largely industrial concerns. giving enormous employment to labour, and they were paying two-thirds more than in England. Since the war Great Britain, with her enormous war expenditure, and hundreds of millions lent to the Allies, upon which no interest was paid, liad paid off £500,C00.C00 of her debt, and reduced her income tax, while the dominion had increased its indebtedness by many millions. Mr Massey had stated that he had put up the income tax after Sir Joseph Ward had left the Government on account of the extraordinary liabilities he was left to meet. He (Sir Joseph Ward), before leaving the National Government, made full provision for the whole of the dominion’s war liabilities, including loans arranged in Sir James Allen's time, and no war liability was outstanding. At that time provision was made for tho loans falling due in years to come, and this was recorded in the Massey Budget. Therefore, this could not have been the reason the Is 3d increase in the income tax. as at that juncture he had £17.000.000 surplus left bv lurry (Sir Joseph Ward). Taxation was no heavier than at any period during the war. He agreed that those having most should pay most, but he was strongly opposed to a system as inequitable as that of to-day. The enormous sums withdrawn from the taxpayers since tho war had had a depressing effect on the most enterprising colonists.