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SHALL THE TAXATION PROPOSALS STAND?

1st June 1920, Page 17
1st June 1920
Page 17
Page 17, 1st June 1920 — SHALL THE TAXATION PROPOSALS STAND?
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Which of the following most accurately describes the problem?

A Criticism of the Statement Issued by the Standing Joint Committee.

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THE MANIFESTO of the Standing Joint. Committee of Mechanical Read Transport Asso • eiations, which has been issued to atl meinbers of Parliament, and published in The 0 ommreial ill °tor, is, to my Mind, a somewhat astonishing .document, especially when one recognizes that it is signed by men whose logical faculties and clear thinking are, generally; above criticism.

First of all, it is enunciated that the scheme of taxation should be such that "every user must contribute his fair share. The, petrol tax, with its present limitations, is unable to secure this." This is an argument not primarily for the abandonment of the petrol tax, but rather for coupling it in some way with additional proposals calculated, so far as possible, to draw equitable contributions from the owners of steam and electric vehicles.

It may be maintained that, even then, the scheme would be incomplete, because heavierpetroleum derivatives would escape taxation. This,, tomy way of i thinking, would be a positive merit, because t would encourage the useof heavier and cheaper fuel, and so, in a measure, tend to relieve the fuel shortage. The man who used such heavy fuels would, so to speak, be rewarded for facing the difficultiesinvolved by having his tax returned to him. When it could be really shown that the heavier fuels were coming into general use, and the tax, therefore, failing to produce the required revenue, it would be time to discuss its abolition or alteration_ ,

Opinions on the Petrol ',Tax and Its Fairness.

This, however, is not my main point. •The Standing Joint Committee draws attention to a minute. of a meeting at the Automobile Club, at which it was represented, and was one of the parties to the agreement reached.This minute began with the words: " That this meeting considers the present system of taxation much fairer than the proposed system ef a single tax." Presumably, if the committee wishes to go back upon its agreement with other bodies it would hardly have quoted. this resolution, and so turned attention to its own failure to hold to its word. We must, therefore, assume that the committee still believes the petrol tax to be much fairer than the proposed scheme of licence d-uties. The memorandum, however, • goes • on to argue that the petrol tax is unfair because no one can tell exactly what petrol is, and, "with substitute fuels coming on the market, an equitable fuel tax is still More complicated, and more iiable to evasion."

Next, we have a long paragraph designed to prove that the incidence of the petrol tax is unfair even as between the various vehicles that use petrol as a fuel. The whole basis of the tax is attacked on the grounds that it aims ' at making the contribution directly proportional to the mileage run. It is eontended that there is every reason why the first thousand miles run should be more heavily taxed than the last thousand miles run, and that the systein of vehicle licence duties.tends to secure this desirable result. .

If all this does not mean that, in the opinion of the Committee, the system of licence. duties is fairer than the petrol tax, if means nothing whatever. If this is its meaning, then we have a manifesto dis: tinctly stating that, in the opinion of the Committee, the petrol tax is much fairer than, but not nearly so fair as, the proposed system ol'i a single tax. This looks Very much like a complete breach of the agreement entered into at the conference at the Royal Automobile Club. I assume, however, that the Standing Committee has not gone back upon its word or deliberately let down all those with Thou it expressed. agreement (and some of whom, in order to Secure that agreement, went some distance in the direction of compromise, eventhough they felt that they were getting the worst ofthe bargain). • Now, the manifesto concludes with the request that the schedule of licence duties be adopted in lieu of .the petrol tax. In other words, the Committee desires the adoption of the new system as against the existing system, -which, in its opinion, is much fairer. Surely, this position is -wildly illogical.

The Incidence of Standing Charges on Roads.

Reverting to the argument to the effect that the tax should be heavier on the first than on the last thousand miles run it is true that roads are built and maintained for public use, only part of the costs being directly connected with wear and tear, and part being, in fact, a standing charge, irrespective of the amount of use made of the roads. We are thus led to divide the cost of the roads under two headings:. Standing Charges and Running Charges. The latter are proportionate to the user ;-the former is constant. On this basis it is clear that the fairest tax would be a composite -one. A part of it should bear a direct relation to the use made of the road. A part should. be a charge for the right to use the road at all. This seemsto bring us to a proposal in 'favour of the petrol tax upon' a. moderate scale, coupled with a system _of licence duties, also upon a moderate scale ; the 'former designed to. cover running costs and the latter to cover standing charges. Such a proposal would seem an eminently reasonable one, and yet it is no such proposal that the Standing Committee supports. Finally, the Committee -deprecates any disturbance of any item, as necessitating the reopening: of the whole settlement. I. ann under the, impression that the one point on which all motoring interests have been quite solid until recently has been the theory that, if possible, taxation should be made proportionate to user. Rightly or wrongly, this doctrine has been universally accepted. Now, the Committee in its manifesto reopensthe argument on this basic principle and, in the same memorandum, argues that nobody else should. even be permitted to reopen a question of detail, On one-thing, and on one alone, I think the Corn.mittee is to be congratulated. It desires the Government's proposals for taxation to go through as they stand. It has produced a document which, if studied by all the members of Parliament to whom it is sent, will convince them completely that the motoring movement has not the slightest idea of what it wants itself. The curse naturally suggested to the politician in such circumstances is to let the Governments proposals go through without criticism or argtiment. Thus, the Manifesto is calculated to achieve this object for which it has been issued, but, while achieving it, I cannot help feeling that it ie. giving our rulers. a very poor idea of the consistency and solidarity, of the motor-using Community. Presently, some other matter will arise, in connection with which the Government will have to, consider the reconciliation of conflicting interests,' of which . the .motoring ecenniunity Will be one. After this glaring example of inability to define a. policy and 'stick to. it, or to hold together among ourselves, we may quite safely assume that our interests will go te the wall .directIy they are opposed to ethers which are more solid and more coherent. VECTIR.


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