8.—5.

102

[j. D. HALL

Mr. Clark: But you are thinking of the local Commissioners. Witness: No, they call them "assessors." They have local assessors round the town. Mr. Clark: 1 do .not think they make the same complete returns that we: do here. Witness: No. I was an assessor there. There is no close' supervision. If you know that a man is dealing heavily you cannot toll what he is doing, but if a man has 1,000 acres with 500 acres" of it in wheat and wheat is Bs. a quarter, you know he is making something solid. Mr. Clark : But it is more or less guesswork in trades. They are tending tei have closer inspection there. Mr. Weston.] I understand that you think that the whole; of the: increased cost of living is due to the heavy company-taxation ?—(Witness) I was not referring to the cost of living but to the cost of production. But increased costs, you put down the weight of that tei the: increased taxation ? —Yes ; but the statement that we are going to give you will be in the form of a, graph, which will show the; increased cost of production and the increased taxation, and you will find that they go up in sympathy. What amount do you suppose is collected from the companies in the shapic of income-tax ? —I have gone into that. What amount would it be ? —I have not got that in my head. It does not follow that because the proportion of taxation has gone; up so-and-so the: amount collected from companies in income-tax would be sufficient to account for tho wheile eif the increased cost of production ? No. You may rather go astray if you go on the system of proportion ? —I am neit going em that epiite:. Take fertilizers : the tax on companies dealing with fertilizers went up to Bs. 9d. anel the cost of fertilizers went up from £4 15s. per ton to between £8 and £9. Do yem mean to say that the company is paying the difference between £4 15s. anel £9 per ton in tax upon each ton of fertilizers ?—Not the company. The transport pays increased taxation. I cannot say that it is absolutely a case of cause and effect ; it may be: a coincidence. Mr. Shirtcliffe.] I wonder if Mr. Hall cemld put into a short statement his recommendations ; it woulel help) us to have them down. ? —As to land-tax ? Yes, as to land-tax. Is your recommendation simply covered by this : a fiat rate of land-tax, an allowance for mortgages, plus the income-tax?—lf that will get over the: difficulty. If Mr. Clark thinks the farmers will make satisfactory returns of their incomes, you can wipe out that arbitrary assessment of income. If it will help, I will try to work out the English form as it appeals to the farmer. Mr. Clark has not been a farmer or he could elo it. Mr. Clark : I have been in touch with them. Mr. Shirtcliffe: You maele a strong point of the argument that the increased taxation is passed on, and is wholly accountable for the increaseel production costs to the; farmer. We, have; hael quite a large amount of evidence that income-tax cannot be and is not passed on. Apart from the evidence we have heard, 1 have hael the opportunity eif seeing some figures dealing with one case which showed quite: clearly that the gross percentage of profit during the war years di minis heel during the period of high taxation. It actually diminished, thus showing in that individual ease, at any rate, the tax could not be passed on ? -But you say that is so. That is so. 1 saw the actual figures, that the gross profit showed a decrease. What I want to ask you is, Can you bring forward concrete evidence that the costs have been raised owing to the passing-on of the income-tax. That is a very important phase of our investigation. One man may say that the income-tax must be passed em, and another; may say that the: income-tax cannot be passed on. We want to get as much evielence as possible on that very important point, which has a strong bearing upon the incidence of taxation of the Dominion ? —Take: the items I mentioned : the high rate of interest does vary in accordance: with the taxation on companies. When you get up to Bs. 9d. in the pound the bank rate goes up in sympathy with it. Take that very case, : has the price of money increased since 1914 in proportion to the increase in the income-tax ? —The bank rate ? Take the bank rate : in 191.4 it was 5| per cent, and to-day it is 6i per cent, ? —But in 1922, when the income-tax was Bs. 9d. in the pound, it was 7 per cent. That was an increase of \\ per cent, when the; income-tax was raised from Is. Id. tei Bs. 9el. : can you say that even then the tax was passed on ?—You are asking me to sheiw a reason why the banks have been almost bleeding the country. Ido not know why. But you have maele the statement that the income-tax is passed on. I. am anxious to get some concrete evidence that that is so, because we have had. a good deal eif evidence both ways ? —Yes, 1 epiite: appreciate that. lam anxious to try to get as much proof as possible', and to show that the increased cost of fertilizers anel flour-milling, and so on, does work in sympathy with the variation in the' tax. As regards fertilizers, do you not think that the increaseel cost to farmers during the: war period, which was the period of high taxation, was largely attributable to the, increaseel cost of the raw materials that hael to be imported for the manufacture of these superphosphates. We all know that if you wanted to import your rock or basic slag you had to pay very much more: during the; war years — especially during the later war years —than in 1914 ? —lt was transport conditions that caused that. Transport conditions, and the prime costs at the port of shipment also went up, so that you cannot say that the increased cost of the fertilizers was the result of our income-tax ? —No ; it is very hard to say that if you put it that way ; but I can present such a strong case where the increased cost is due to items like those which have varieel in sympathy with the tax as to enable a fairly sound conclusion to be drawn. After all, it is only a general assumption ? —lt may be a general assumption, but you have: to consider the number of the individual cases.