SUMMARY.

Colonist, Volume LVII, Issue 13728, 17 March 1915, Page 1 (Supplement)

SUMMARY.

AVAR TAXATION

(From "The Colonist," March 16.) tTiiE statement of the Minister of; [Finance a few days ago that a war tax ] Svas inevitable may be accepted as an: indication that a measure will be placed < Ibefore Parliament next session to place ffche Dominion's war expenditure on a proper footing, and public opinion is naturally exercised as to tho form tho Hevy will take. The expediency of special taxation for war purposes finds j few opponents, and for our own. part we aregard it as unfortunate that the G'ov. ernment should have set us face against tho departure until so late a Hate. Too much has been left to private patriotism, and beneficence, which siuni'd not, we think, have been expected tc | find any part of the regular equipment of the Expeditionary Forces. That was a charge which should from the first, Lave been borne by tho nation, leaving | l-o private liberality the ample scooe j provided by the supply of comforts for! the men and tho relief of distress ooc'a-! fiioned by the war, which calls for sustained giving as long as the war lasts. While there can be no valid objection rto the imposition of a war tax there i^ a diversity of opinion as to the manner \ In which it should bo applied. The I proposal of Mr. Harold Beauchamp, I chairman of the Bank of New Zealand, that it should be a Customs tax, has aroused wide discussion. He suggests ii war tax of one per cent, on the total amount of our exports and imports. This, he says, could bo spread to such an extent over tho whole population as mot to be felt; by anyone, while at the same time it would provide the Government with all the revenue required. Mr Beatichamp estimates that such a tax would yield half a million per annum. One of the chief merits he sees in sucli a tax is the cheapness of its collection, As all tho machinery is already provided iby'the Customs Department. Such a tax, however, would not operate equally, and, as has been pointed out with Snitch force and justice by correspondents in our columns, it \vould bo unfair an its incidence to the mercantile classes, especially the retailers, while others Would escape the impost altogether. [Revenue for war purposes should not be raised by indirect taxation. The merit of simplicity and ease of collection in Mr. BeaucJiamp's proposal is not peculiar to a Customs surtax. •Machinery exists by which the revenue required could ho raised by an increase in tho graduated land and mcortK? taxes and death duties. Mr. Lloyd George largely relied upon the income tax as a source from which to draw the additional revenue required for war purposes. He doubled the tax, bringing it up to as much a? half a crown in the pound on unearned incomes. A "drastic increase would not bo necessary, of course, to cover the interest, mud sinking fund on the war 'onn which ks likely to represent New Zealand\s ■financial share of the Empire's task. !A.n increase of less than 20 per cent, on the present yield would suffice to moot the charges on a six million loan. In order to make the tax more general in its application, the present exemptions could be reduced if that were considered desirable. Such a means of finding the required revenue seems in every way preferable to the unequal operation of extra Customs taxation, which besides its other drawbacks would haw ia disturbing influence upon trade.