REDUCING TAXATION.

Waikato Times, Volume 104, Issue 17467, 30 July 1928, Page 9

REDUCING TAXATION.

AMERICA'S EFFORT. ITS EFFECTS. (Taxpayer-) The address Dr. Milbank Johnson, the president of the California Taxpayers' Association, delivered to a gathering of Wellington's professional and business men, might have been spoken from the floor of the House of Representatives with advantage to the whole community. Dr. Johnson is paying a flying visit to the Dominion, allowing himself some 12 days between his arrival in Auckland and his departure from that port. Notwithstanding the fact that he had only a few hours to spend in the capital city,' however, he readily acceded to the request of the executive of the New Zealand Taxpayers' Federation to devote one of them to a talk on American taxation, simply stipulating that it would be understood he knew nothing of the Dominion's politics or politicians and wished to avoid treading upon anyone's toes. With this much conceded, Dr. Johnson spoke most interestingly on the subject he had made his hobby and study in his own country. The Held of taxation was so wide, he said, that he would not attempt, to cover it all in the short time at his disposal; but he would touch briefly upon some phases of the taxpayers' movement in the United States which he thought would be of interest to his hearers and perhaps to the New Zealand public generally. The movement in America had been brought about by a feeling on the part of business men that too large a proportion of their efforts was going towards the cost of the Government. In order to reduce that load on both big business and small business it was felt that the only course to adopt was j to' reduce the amount of taxation. j

Efficiency in Government.

Since the war, the visitor went on to say, the inevitable increase in taxation on business had made it important that every possible means should be employed to increase the efficiency of business and to lower the cost of production. Of course labour charges had largely increased and as a consequence the cost of production had steadily advanced. This being the case, in order to give fair returns to their shareholders manufacturing firms had to reduce the cost of production by means of new and improved machinery and by the adoption of better methods of work. In these circumstances it had occurred to some of the American business men that if increase in efficiency in business could reduce the cost of production, it might be that an intensive study of the methods of the Government might bring about increased efficiency that would result in a reduction in the cost of administration and a corresponding reduction in taxation.

The idea grew with observant people, and Dr. Johnson himself was entrusted with the task of organising a California Taxpayers' Association with a view to increasing the efficiency of the business of the Government. While the duties of the Government were most difficult and complex, it was apparently thought by most people in America, and perhaps elsewhere, that some persons who were not successful in ordinary business life were able to bring about efficiency in Government business. The promoters of the new movement had felt that before they could advise the officials they must instruct themselves. • They tried, therefore, to get as near as possible a cross section of the faxpaying public so that they might ascertain their conditions, their relations to one another and to the Government. That was the foundation on which the association built. Expert Investigation. The Taxpayers' Association, Dr. Johnson continued, realised that in order to got public opinion on its side it would have lo feed the public on '.facts and not upon theories. It had no panacea for high taxes to offer; il had no great "cure-all" of taxation; it did not worry about forms of laxalion —single tax, double tax, or Lripie tax—but it knew that taxation was too high and that it was the main cause of the country's financial troubles.. With'this conviction the association came to the conclusion that if it could convince 5 per cent, of the people of the righteousness of its cause, its battle would be more than half won, and towards this end il, set up a "Depart- | ment of Research," with a budget of | about £50,000 a year, .which was de- j voted exclusively to 'research in regard | to Government efficiency and expendi- j ture.

The department had a staff of about 0 paid employees selected for their peclal knowledge and, in addition, exerts in various branches such as acountancy, engineering, transport, and i forth. In Dr. Johnson's own busiess, that of life insurance, officers •ere lent lo the association as experts i examining State and municipal penons, salaries, allowances and so on. here was no spying, but a great deal t' careful, conscientious examination. was found that the system of Govmment accountancy was slipshod and nnelimes seemingly devised to deJive the public. Efforts were made y experts to produce balance sheets •om the figures supplied to them; but lough they succeeded in some cases

in a much larger number they failed to do more than disclose an extremely unsatisfactory state of affairs. Results. In summarising the results obtained by the California Taxpayers' Association, Dr. Johnson had no doubt that much of the seed the organisation had strewn had fallen on fruitful ground. H was impossible, he admitted, to sav bow much money had been saved as a result of the association's efforts but the executive found last year that I'"' every cent spcnl j n its work a saving of 285 cents to the taxpayers had been effected. That was a return of something like 28,000 per cent, upon the subscribers' money, showing individual assistance and co-operative oflort to be very excellent investments (he association could go to the taxpayer and say "This is not a charitable organisation, but it offers you a return of 28,000 per cent, on your money," and the taxpayer rarely refused "to assist in the good work. The reports ol the association's research work showing how economies had boon effected and how efficiency had been increased, as well as how extravagances persisted and bow inefficiency continued, were distributed to tens of thousands of actual voters who in the end would exercise more or less influence on the Government.

Replying to a question, Dr. .Johnson said that when the association first started operations it encouraged all sorts of opposition. Some State aulhorities bad refused to giv e access to their records; but the trouble had been overcome by legal proceedings, and

sincc then the association's relations with the authorities had been entirely amicable. It had established a reputation for fairness and constructive criticism, and only a few months previously the Governor of the State had commissioned the executive to examine and report upon the affairs of one of the Suite's institutions- Mutual respect and confidence could go no further.