LOWER TAXES

Southland Times, Issue 19653, 2 October 1922, Page 6

LOWER TAXES

FARMER AND MERCHANT. INDUCEMENT TO CAPITALISTS. Time was asked by several Wellington merchants and other business men seen by an Evening Post reporter last week with reference to the new land and income tax proposals brought down by Mr Massey in the House of Representatives last evening. The effect of them upon industries, commerce, and farming was generally thought | to be satisfactory, so far as they went; although it was said in several instances, that the Minister, having gone as far as a reduction from 8/9 in the £1 to 7/4, might as well have gone to the extent of a reduction to 5/-. “However,’’ it was remarked, “we must- be thankful for small mercies, especially in the light of the general unsettlements in Europe.” It was readily recognised that the Government was endeavouring to put business and all industrial enterprise—farm- i ing and other—on a better footing than they had been for same time past, under the I very heavy pressure of both land and income ' taxation. The merchants would have wel- : corned 5/- more than 7/4, of course, because , they would know that if, as under the 8/9 ; rate, they made a profit of £lOOO or £lO,OOO, ! as the case might be, that only 25 per cent. j of it instead of nearly 50 per cent, of it, ! would be going to the Government in taxa- ; tion. The reduction in income tax as pro- I posed would, in any case, have the effect of j improving trade and manufacturing enter- ; prise, arid so benefiting the working people. True, a 5/- rate would have done much, indirectly, to increase employment and make work more stable, but the lowering of the income tax, in any degree, was acceptable; especially so was the proposed allowances for legitimate losses incurred in business..

One gentleman thought that the lowering of the maximum rate from 8/9\to 5/- in the pound should have been boldly undertaken while the Government was about it. Had this been so, much needed new capital would, he had good reason to know, have been introduced into the country, and this was much to be desired at the present time, especially for station and general farming purposes. At the same time, he recognised that the Government was doing the best it knew to grapple with the excessive taxation problem, and to that extent it was to be commended. It was not helping the farmer in the matter of reducing the land tax a moment too soon. That was very necessary at the present time—in fact, it was overdue.

“Mr Massey, I think, is scarcely correct in his statement that the reduction of land and income taxes as proposed will represent a concession of £929,100—-say £1,000,000” — said a gentleman who is head of one of the largest firms in the Dominiop. He proceeded: “Mr Massey is misleading here, I venture to think. The Labour objectors certainly show that they are under a misapprehension in this. Mr Massey thinks he will receive the same amount of taxation by way of income tax next year as this. He certainly will not. Th» February he collected, say £6,000,000. He expects to receive £4,000,000 this coming collection; I think it will be nearer £3,000,000. If that be so, then the concession to land and income taxpayers will not- be nearly £1,000,000. as Mr Massey says and as his opponents think. It will probably be more like £450,000 or £500,000.

“But- I think the Government has gone as far as it prudently can. As for the possibility of war and its effect upon taxation, everyone must hope that that- will be averted. The relief to be afforded payers of land tax will be specially welcome, and should encourage the farmer to take heart. Personally, I think the Government should have abolished the super land tax in its entirety.”