DISTRIBUTING INCOMES

Poverty Bay Herald, Volume LXIV, Issue 19455, 14 October 1937, Page 5

DISTRIBUTING INCOMES

OBJECT OF TAXATION UNDER-SECRETARY’S VIEW A REPLY TO CRITICS (Parliamentary Reporter.) WELLINGTON, this day. Unimpressed by many hours of Opposition demands for reduced taxation, Mr. J. A. Lee, Under-Secretary for Housing, made a humorous answer to critics when the financial debate was continued in the House of Representatives last night. He recalled that one of the strongest protests was that of Mr. C. A Wilkinson (Nat., Egmont), who had detailed the experience of a Taranaki company which could not pay a dividend for 10 years. Then it reached the profitable stage, and Mr. Wilkinson considered it a shame that it had to pay high taxation. Mr. Lee suggested that, instead of indignation, the shareholders should have rung the bells: Mr. Wilkinson: They were paying off past losses. ' Mr. Lee: For years they must have been yearning to pay income tax. They must have been delighted. We have been so busy during our short period in office making the country prosperous that we have not yet had time to deal with incidentals. "A Good Plumber” He asked the Opposition why their policy, when in office in prosperous times, was always to make taxation as indirect as possible, instead of being placed on the shoulders best able to bear it. The Minister of Finance had already promised this session to make some alteration in the income tax, and there was a necessity to alter its incidence, but it was not easy to effect sweeping transformations in a moment.

It would be far better, declared Mr. Lee, if company taxation was imposed directly on individuals and made heavier and heavier as individual income appreciated, but something would then have to be done to prevent the piling up of reserves for the purpose of avoiding taxation.

Mr. Lee completed his speech by stressing the importance of distributing incomes instead of providing opportunities for piling them up in a few hands. The stream of production, he declared, had to be maintained, otherwise the stream of consumption would be nullified. Income tax was gradually making up for the unequal distribution of incomes. “I am living in hopes of the Minister of Finance stopping the leaks,” concluded Mr. Lee, “for he is a good plumber.” “Mantle of Seddon” Sir Alfred Ransom (Nat., Pahiatua) the next speaker, said there was “a certain amount of humour, but very little sound argument,” in Mr. Lee’s speech. Sir Alfred complained that the bill entirely disregarded previous losses. No consideration was given to the taxpayer who had encountered difficulties during the depression period and had not yet recovered and was still paying land tax out of borrowed money. Land tax was most unfair in its incidence. The Government, he said, claimed that the mantle of Seddon had fallen on them, and a Government member had claimed that there had been 100 years of misrule which had to be rectified. That period included the term of Seddon as Prime Minister. During Seddon’s term, taxation was £3 7s 9d a head, and to-day it was £22 7s 6d.

Mr. S. G. Smith (Nat., New Plymouth): Karl Marx. Sir Alfred Ransom wanted to know what Seddon would think of a Government which increased taxation by £14,000,000 in two years.