SOCIAL SECURITY TAXATION AND COMPANIES

Patea Mail, 30 September 1938, Page 2

SOCIAL SECURITY TAXATION AND COMPANIES

TO THE EDITOR " Sir, —The Hon. Mr. Savage assures us his Social Security legislation will' benefit all, and he has stated that more than 80 percent) of New Zealanders will, on reaching sixty, require a State pension of 30/- a week. One can hardly claim this to be encouraging if this is to be the result of the SocialistLabour Party remaining in power. However, even so, it is difficult to see just how incorpoilated companies that must contribute to tha scheme will benefit. ,An incorporated company Is an artificial person created .by law. Someone has said it is ,so artificial that it has neither body to 'kick nor soul to save. Where) then can it benefit as a contributor to the SocialistLabour Party Superannuation Scheme? Yet this is by no means the most inequitable feature of the legislation. According to the Governments Year Book 1938, there are, including foreign companies carrying bn operations in New Zealand, 7,815 companies on the the New Zealand register. Of thefee n 0 fewer than 6,083 are smlall concerns registered as private companies, A private company may not consist of more than twenty-five members. Many, indeed most of the private companies in New Zealand, are family affairs, consisting at mlost of four or five members. Thus, other than in legal constitution, they are virtually partnerships, the 'members of which -have ■ secured the advantage of limited lia- : bility. To tax these concerns at a shilling in the £ .as under the Security Act, is little more than to tax individuals twice—once- as individual citizens, and then again as shareholders , in small private companies.. With the-, increased incomle taxation brought in by the Socialist-Labour Government on all companies, the burden may become intolerable, despite the fact that, of late, owing to the increased price for our exports, some have been enjoying . a period of prosperity. ; . It is to be hoped that the new Nat- . ional Party will, when placed on the : Treasury Benches, lose no time in altering the inequitable state of affairs brought in by the DSecurity” legis- / llition, at any rate, so far as it, bears - ‘ so hardly on private companies that ■' constitute largely the backbone of private industrial enterprise in the Do-' minion.- ' ! : I am), etc;.,. , i “ AUTOLYCUS ~ f