My hon. friend brings
forward a resolution, on which his Bill is to-be based, and in that resolution he does not say what he has stated to-night. In the resolution he states that it is impossible to go behind the capitalization of the companies. That is what the minister stated,
and, in order that there may be no misunderstanding about it, I will quote his own words from Hansard of February 15, pa*e 849: '
It will be observed that incorporated companies are taxed upon a higher basis than individuals and partnerships. The reason for this is-that capital in the case of joint stock companies frequently represents intangible assets or capitalized earning power or goodwill. We found it a practical impossibility to go behind the capitalization of companies and endeavour to ascertain the precise cash value of their assets as can be done in the case of individuals or partnerships. The cases of railway, public franchises, and so-called holding companies, mining and other corporations, illustrate the difficulty to which I am referring. In addition there is the further fact that shareholders have purchased their shares and receive their dividends upon the basis of issued capital stock.
If these words mean anything, they mean that the paid-up capital stock is the basis on which the companies would be taxed. I am very glad, however, to have the statement of my hon. friend the minister tonight. Since 15th February, the minister has seen a great deal of light, and he has come to realize, not from anything we have said on this side of the House, but from the influence brought to bear upon him by supporters of the Government, by industrial institutions who support hon. gentlemen opposite, the absolute unfairness, and the absolute inequality of the system of taxation proposed, one man being taxed heavily, while many others are left off absolutely free. Then there is a difference in regard to the capital in incorporated companies, and the capital in partnerships, but it is too late for me to go into that at the present time.
Another point to which I desire to call attention is, if I understood my hon. friend rightly, that he proposes to let life insurance companies off absolutely, with the exception that they have to invest in Government bonds one half of their extra assets earned during the years 1914 and 1915. I think that the ordinary life insurance company, which has put up bonds earning from 4 per cent to 45 per cent, will be only too glad to exchange these bonds and the securities they have for Government bonds which will yield 54 per cent. Is that putting a tax on life insurance P I would like to know why a difference is made between life insurance companies and accident insurance companies. It may be said that, if you tax life insurance companies, they will charge . a 'higher premium on their policies; but does that argument not apply hr the same degree to fire insurance companies? If fire insurance companies are taxed, will their
policy holders not have to pay higher premiums? I would like to know on what grounds the life insurance companies are exempted, and in fact given a bonus, while the other insurance companies are to be taxed, and very heavily taxed.