WHO PAYS?

Wanganui Chronicle, Volume 73, Issue 115, 17 May 1930, Page 10

WHO PAYS?

EFFECT ON HIGH TAXATION Socialists in arguing that a fairer distribution of wealth is necessary have a false idea that tuuy can (to use a common expression) “take money from the pockets of the rich and hand it to the poor” in some form or other as social services, unemployment relief, shorter hours, holiday on pay and so forth. Almost all these attempts to even up wealth merely amount to expenditure which produces no return. Tho British Socialist Party is comfortably fixed in this belief and trade is being severely handicapped—our New Zealand Socialist Party’s platform forecasts the same ruinous policy. But in England grave doubts are entering the. minds of working men that the heavier the burden which falls on the employer the worse it is for the worker. Remarkable Reports The general Federation of Trade Unions which next to the Miners’ Federation, is the laigest body of workers in England, has recently issued a report on “The effect of taxes and prices.” Mr Snowden recently said that “taxation instead of discouraging individual effort, tends to stimulate it.” The report’s comments are that “This contention which is put. forward officially would appear to be a dangerous one for Trade Unionists. —it would hardly be wise for any representative of work people to suggest that a 20 per cent, reduction in wages. The standard rate of income tax is 20 per* cent.—would insure greater efficiency and harder work. Carried to its logical conclusion,” they continue, “this contention would mean that all incomes should be taxed out of existence and all wages reduced to zero.”

Misleading the Workers The report goes on to say: “However desirable it may be to secure fairer distributions of wealth, it is fatal to National prosperity to eat up that capital which is necessary to finance present and future production—when people advise lhe worker that all his insurances, pensions, housing and education expenditure can be extracted from capital without endangering his industrial existence they are badly misleading him. The truth is that?* all these things and others, such as holidays on pay for municipal workers, have to be earned by the operatives in other industries. It is the industry of these operatives which produce the wealth out of which the cost of social improvement arc met. ”

There is much more in this report worth quoting but we will only repeat its assertion “that excessive exactions from income and’ estates will weaken the individual will and power to save” —rather than, as Mr Snowden said above, in stimulating greater efforts. Finally its general conclusion is “that excessive taxation has psychological consequences and weakens the will to save, and resentment induces extravagance at home” or the removal of capital to other countries As our New Zealand Labour Party forecasts a policy involving a huge increase in taxation it would be well for our wage earners to study this Trade Union report. (Contributed by the N.Z. Welfare League.)