TAX BURDEN !

Waikato Times, Volume 122, Issue 20425, 16 February 1938, Page 11

TAX BURDEN !

' RELATION TO PRODUCTION < I POSITION ANALYSED t: VERY HEAVY INCREASE t ; I I ;! The recipients of income-tax de- ' mands at the present time have every r cause to reflect on the increased pro--1 portion of their incomes that is bei m2 taxed back into the Treasury s (says a statement by the Associated chambers of commerce of New- Zeac land . f | The following table shows the _ j growth in income taxation collections. P together with unemployment taxation _! collections—since the latter are vir--Itjally another form of income taxs ! ation :

these years, tomcla! estimate. In 1928-29 income taxation accounted for 18.5 per cent of total tax revenues. To-day it represents over 21 per cent, while, joined with unemployment taxation, it represents 35.7 per cent. The increase in the amount col- - lected in income-tax, and the inaJ creased proportion which income-tax j represents of total taxation, is not, i however, to be taken as being accom- “ j panied by a loosening of the taxation screw in other directions, as is shown in the following table of comparisons * j with 1928-29—the year which, previp|ous to the record year 1936-37. was g New Zealand’s best for total value of s production:— TAX COLLECTIONS r 1937-38. (Official Estimate).

s j 9, The table shows that, taxation t.o- - day is almost double what it was In -! 1928-29. The only taxes which show* r a reduced yield are a number of mis--1:1 J cellaneous minor ones, and the land " tax—in respect of which the Governv! ment’s estimate of reduced yield no 9 doubt has a good deal to do with the recent legislation providing for a hardship clause to be used to moderate the effects of the tax. Anewar to Tax Defenders Despite the fact that taxation in ■_ general has never before been so high, j there are those who—even in Parlia--11 ment—have defended it with the ar- -! gument that the community can bear s it because the value of the country's d production has increased so greatly, e As to that argument, preliminary ir figures of the value of production in l.;New Zealand for 1936-37 are now e : available from the Government Statisyjtician. The value is set down at it' £136,100,000, as compared with I £126,600,000 in 1928-29. This °j means that whereas 14.08 per cent of ! the value of production was taken in general government taxation in 192829, 22.89 per cent was taken in 1936- *• I 37 * " j Also, the part played bv local gov- - ! ernment taxes is not to be forgotten. The latest year for which figures in f this connection are available is 1935i 36 £6.162.000), but assuming these "'local taxes to be the same for 1936j37 ;and the likelihood is that they 5 ’ '.will be more) the following is the ) position:—l92B-29, State and local | taxes, £17,832,000; value of produc- ! tion. £126,600,000; taxation as per- !* ! centage, 19.0; 1936-37. State and t ; local ~taxes. £3T,326.000; value of >r . production, £136,100,000; and taxa- * tlon as percentage, 27.4 per cent, h This shows that taxation, as a per;e • centage of the value of production, 1* j stood at over 27 per cent in 1936-37. i- j In other words, whereas total taxa- , m tion before the war represented about \ 2s 4d in the £1 of the value of pro- ■ duction, and in 1928-29 3s 9d in the £l, in 1936-37 it represented 5s 5d in the £l. This is not to be conl(j fused with actual income-tax rates. for. instance, which rise, to a higher l- rate in the £1 . On top of this, the Government, is budgeting to take a further £4.354,000 in taxation dur- „ ! ing the current financial year. When the figures are examined, they fully support the contention that the present load of taxation is excessive and oppressive. A further disquieting feature of the situation is that figures available in official statements show that none of the revenue is be- \ ing earmarked for a rainy day.

7 1 withunemi Year ended Income ployment .’'March 31 taxation tax added 6 j £ £ vj 1928-29 .... 3,310,000 3.310,000* 3 1929-30 3.533,000 3.533.000* 1930-3 1 .... 4,003,000 4 234.000 s * 1931 -32 . .. 4.443.000 5,605,000 . 1 932-33 3.556.000 7.056,000 e 1933-34 2.96 HCOO 7,374,000 y, 1934-35 .... 3.706,000 8,358,000 1935-36 .... 4.581.000 3,503,000 s 1936-37 6,618,000 10,843,000 d 1937-38 . .. 7,500.000 12,680,0001 5 . * Unemployment taxation not levied in

j Increase Plover rentage d source 1928-09 Fnereas’e 8 £ s Income and un- ! employment .... 9.369,000 ’ i Customs an<1 sales 6,i96,ooo “8 5 Highways 1,81 4,000 146 , | Stamp and d^atd duties 672,000 24 , 1 Beer duty 338,000 a Land 140.000* 1 2* :j Miscellaneous .. 563,000* “1* j j Total net increase £17.686,000 99 ‘Decrease.