The Sun WEDNESDAY, JUNE 27, 1917. WAR REVENUE.

Sun (Christchurch), Volume IV, Issue 1053, 27 June 1917, Page 6

The Sun WEDNESDAY, JUNE 27, 1917. WAR REVENUE.

]t is the veriest truism that those who have and are earning most shall pay most when the Government goes lo the country for revenue for the ensuing year. That principle will guide Cabinet in framing its new taxation proposals. A considerable section of the community has added substantially to its bank balance as the result of the demand from Europe for our primary products, but war profits are not the monopoly of the pastoralists and agriculturists. It cannot be gainsaid, however, that a number of the big men engaged in raising wool, meat and wheal have, by virtue of their particular calling, done exceedingly well out of the war, and it was with the idea of acquiring a large helping of that new wealth that the Government instituted the Excess Profits tax. A year's experience of that measure has shown that it operates unfairly in the cases of the primary producers in a small way, members of the various professions, and lately-established business iirms, who did not more than' pay their way until some lime after the European trouble had brought increased prosperity to the Dominion. In any case the process of raising revenue by means of the Excess Profits lax is cumbrous in the extreme, and it will be surprising if the Government does not substitute for it the more effective, because less tortuous, system of the graduated income lax. No fairer principle can be devised than taxing a man according to his ability to pay, and if the incidence of such a tax were made sufficiently stiff in the highest grades, the Treasury would not want for revenue with which to finance our part in the war. Just what the Government proposes to do in the way of meeting this ever-increasing expenditure—how much il proposes to raise by taxation, how much by loan money—there are no means of knowing. A War Loan, probably of a large amount, is a certainly. There is plcniy of loanable capital in the country for the asking, and we have no doubt but whatever the Government asks will be granted. It should !jc our aim to reduce as much as possible the charge on posterity, lo pay for the war as we go along and lief ore Ihc present wave of prosperity recedes—Sir Joseph Ward, by the way, is of the opinion Ihr.t our good limes will remain with us even after the world struggle is concluded, and the nations return once more to the arts of peace. But the Minister of Finance was always an optimist, and in Ibis instance, it is exceedingly difficult to say what will, or will not happen in commercial circles when Germany is defeated. According to prevailing indications, we are not justified in assuming that New Zealand will be able to trade so advantageously in post-war times, and if the years confirm that view, we would do well to hesitate at spending our war profits as they accrue. If the overflowing stocking is emptied to-day, what will be our case if and when money becomes dearer, oversea trade diminishes, and prices of primary products fall? Even if conscription of wealth, as the Socialists understand it, were a practical proposition, it would not be a safe policy to follow,

in view of the uncertainty of trade and markets after the war. There is another aspect to this demand for what amounts to the confiscation of war-won wealth. New Zealand is almost entirely dependent on agriculture. Industrial development is proceeding but slowly, and if the bottom fell out of the wool, meat, butter and cheese markets, this country would be faced with the prospect of serious economic trouble. The primary producers are our sheet anchor, and if, as the result of oppressive legislation, or muddling interference, such as drove fanners out of wheat-growing, the Dominion's pastoralists were similarly checked in their enterprises, financial disaster would be inevitable. So far from discouraging the output of foodstuffs and wool in this way, the Government should realise the folly of killing the goose that lays the golden egg.