TE AWAMUTU COURIER. Printed on Mondays, Wednesdays, and Fridays. MONDAY, 22nd MAY, 1939. LAND AND INCOME TAXATION

Te Awamutu Courier, Volume 58, Issue 4187, 22 May 1939, Page 4

TE AWAMUTU COURIER. Printed on Mondays, Wednesdays, and Fridays. MONDAY, 22nd MAY, 1939. LAND AND INCOME TAXATION

THAT there is a real need for revision of the taxation system in New Zealand, long promised, is clearly evidenced by the statement issued by the Associated Chambers of Commerce. Careful perusal of the points made confirms the claim. Unfulfilled during the life of the last parliament, when in fact the anomalies of the graduated land tax were re-in-troduced, the promise now stands renewed; but the Prime Minister’s recent reference to the programme of the coming session gave no new hope and revived no old one. It can only be repeated that taxpayers whose experience is the best witness to the unjust and oppressive incidence of taxation in certain forms should combine to present their evidence to the Government and appeal for reform and relief. The statement of the Associated Chambers sets out one interesting illustration, which shows that of two companies, each earning the same net profit, one pays at the rate of 7s 6d in the £, because no concession is made in respect of land tax paid, while the other pays at the rate of 6s 11.3 d in the £, having had no land tex. to pay. These, rates are further differentiated by the effect of the social security tax on companies, so that the first company pays, over all,’9s 8d in the £, and the second 7s 11.3 d. This grievance is on all fours with that of the ordinary taxpayer, w’ho cannot help resenting the fact' that he pays (or will pay) income tak On an income from which Is. in the £ has already been paid into the Social Security Fund. It seems to him that he is paying tax on a tax. The only possible official answer to this, of course, is that more taxes than one may be levied on the same income. If deduction is allowed in respect of one tax, then, to produce the desired revenue, the rate of another tax must be increased. What is not disposed of by that answer is the possibility, which does not seem to have been worked out, that this system of- double taxing creates or ■widens inequitable differences between one class of taxpayer and another. But the most glaringly obvious fact about the system of land and income taxation is, of course, that the graduated land tax offends every sound fiscal principle. It is levied, not on earnings, but on the source of earnings; it is levied indifferently whether the land taxed has been profitably or unprofitably worked, so that a farmer or manufacturer who has operated at a loss must add to his loss by drawing on his capital; and it is, besides, levied on land values which, from district to district, exhibit absurd disparities. The substitution of the low flat rate of land taxation for the graduated scale, while it did not remove these injustices, at least softened and reduced them. The present Government’s reintroduction of the graduated scale revived them all in their worst form; and the growing difficulties of farmers are making them insupportable. The Government will look in vain for any excuse to defer its promised inquiry beyond this session.