TAXATION SCHEME.

Waikato Times, Volume 105, Issue 17783, 7 August 1929, Page 6

TAXATION SCHEME.

BUDGET PROPOSALS. RETRENCHMENT FAVOURED, MR A. M. BISLEY’S VIEW. Opposition to the additional primage duty and the increase in the graduated land-tax was expressed by Mr A. M. Bisley, the Hamilton merchant and chairman of the Swamp Development League. He took the view that the Government should so retrench the expenditure on the public services as to make any increase of taxation unnecessary. “Primage was introduced during the war as a temporary measure, and it should have been withdrawn years ago,” said Mr Bisley. "It affects every class of goods, and, therefore, affects every class in the community. Another objection is that the primage is based, not on the invoice cost of the article but on the domestic value at the port of shipment. In many cases the exporters reduce the price fob export below the domestic value in order to secure oversea business and to enable the article to be sold in the importing country at approximately the same price as in the country' of origin after payment of shipping and all other charges. The primage, however, is not reckoned on this lower price but on the domestic value. In many cases the primage will be passed on to the public. In other lines this will be impossible, and the tax will have to come out of the slender profits of the mercantile houses. Taxation of Farmers. Turning to the proposals for increased taxation on wealthy farmers, Mr Bisley said, “I agree that the farmers earning large incomes should be called upon to pay income-tax, but I do not agree with Sir Joseph Ward’s proposal to tax the farmer either on the graduated land-tax or the incometax, according to which is the higher. If the land is not returning the stipulated income, then a man cannot be expected to meet the taxation- The general principle of the graduated land tax is rather a big question to tackle. The principle is so fixed now that it is not likely to be altered, but I think there should be exemptions to encourage the development of certain classes of country.

"The proposal to reduce the mortgage exemption seems to me unjust. It w'ould in many cases, no doubt, create hardship.

“I am fully convinced that the Government could have avoided these increases in taxation by restricting their own expenditure. Our population has increased by' 300,000 since 1914, and the staff of our Civil Service has increased, I understand, by 74 per cent, in that period, with*a corresponding increase in the national wages bill. A searching investigation of the Government departments should be immediately undertaken, and vigorous retrenchment would undoubtedly follow. As an example of waste, 1 may mention that the average business mna is called upon by various Government departments many times during the year to furnish returns relating to his business —returns which cannot be of any value but which keep a considerable number of workers employed in tabulating. “I must say I expected something better than we have received from Sir Joseph Ward, and it seems to me that his reputation as a financier is much overrated.”'

REVENUE MUST BE FOUND. SAYS MR F. H. CLAPHAM. Mr F. H. Clapham, president of the Hamilton Chamber of Commrece, pointed out that the present Government had been left with a big deficit and it had to find the revenue somewhere to make this deficit good. No one liked to be taxed, but'it must be obvious to any reasonable man that taxation was necessary to produce the revenue to keep (he country going. Referring to the primage duty of 2 per cent., Mr Clapham said this was an increase of 1 per cent. At 1 per cent, it was hardly noticed. It was also so infinitesimal that it was hard for the retailer to pass it on owing to it beifig so widely spread. At 2 per cent., however, there was a better chance of passing it on, and he could sec no reason why, therefore, tradespeople should squeal. He saw many directions in which the taxation could have been placed where it would have done far greater harm than by increasing the primage dues. He thought this a simple way of raising money without causing anyone any great inconvenience.

No matter how taxation was spread, it was bound to hit someone, Mr Clapham added. No one liked to be taxed. We must, however, look on these tilings from the national viewpoint. Speaking of the tax on land, Mr Clapham agreed that farmers earning high incomes should be taxed just as other people were.

“CLUMSY, UNSCIENTIFIC.” OPINION OF MR S. N. ZIMAN. “The Government has apparently avoided concentrating on the difficult and unpopular task of reducing expenditure and has taken the easiest way out of its troubles with an apparent disregard of the future.”

In these words Mr S. N. Ziman, of Cambridge, summarises his opinion of the new taxation proposals enunciated by the Prime Minister in his Budget speech. “The all-round increase in Customs duty-—though nominally small—is bound to have a definite effect on prices and cause an increase in the cost of living which is already too high,” proceeded Mr Ziman. “It will be felt mostly by the farming community in the shape of an appreciable though small addition to the costs of production." Mr Ziman said the proposed increase in the land tax in the case of holders of land valued at over £12,500 unimproved value was a clumsy and unscientific attempt to add to the revenue. If it was assured, and this was open to question, that an increase in taxation was necessary, it should lake the form of a properly adjusted increase in both land tax and income tax based on the ability of the assessecs to bear the burden.