Wairarapa Daily Times [Established Over 50 Years.] MONDAY, 31st JULY, 1933. PROBLEM OF TAXATION.

Wairarapa Daily Times, 31 July 1933, Page 4

Wairarapa Daily Times [Established Over 50 Years.] MONDAY, 31st JULY, 1933. PROBLEM OF TAXATION.

One of the most interesting passages in the recent Budget speech of the British Chancellor of the Exchequer was his reference to the agitation in favour of deliberately unbalancing the Budget, in order to secure a reduction in taxation. Such a reduction, as he said, would be welcome to all, especially Avhen it was advocated by people in high authority —eminent economists and powerful journalists—who maintained that not only is it not the broad road that leads to destruction, but is actually the straight and narrow path that leads to salvation. Having dismissed the suggestion, he proceeded to outline, very fairly, the general argument in its favour. Which was, that the time had come when trade recovery was on the point of happening, and that; a reduction of direct taxation would give such a fillip to the country’s psychology that the wheels, of industry would start running again at such a rate that in a comparatively short time we should find ourselves with a substantial surplus of revenue. This programme was to be combined with'one of public expenditure, and the combination was to be announced beforehand, so that the public might keep its attention on the final result, and not bother itself about any question of surplus or deficit in the meantime. These contentions were brushed aside by Mr Chamberlain, who doubted whether the psychological effect of a reduction in taxation would be stimulating to industry, unless it were secured by a surplus of revenue over expenditure. Moreover, he felt obliged to ask what would happen if the expected effect did not materialise; and he also urged that if the process of unbalancing

the Budget was once started, it would be difficult to resist the demand, which would assuredly rise,for an extension of the process. If that were so, the Government would very quickly find itself in the very position which it had been appointed to cure, and uncertainty and apprehension would smother all the hopes and expectations that had been aroused by its original action.