INCOME TAX.

Auckland Star, Volume XXIV, Issue 173, 24 July 1893, Page 4

INCOME TAX.

(To tho Editor.)

Sir,—All incomes up to £300 a year are supposed to be free of income tax. All incomes excoeding £300 a year aro reduced by £300, and the net balance up to £1,000 is taxed at the rate of 6d in the £. On tho3o incomes which oxceod £1,000 a yu.nr net 6d in tho £ is charged on tho £1,000, and Is in tho £ on any amount in excess ot £1,000. Income arising out ol dividends from banks and companies is not included in tho income tax roturns because upon it tho companies pay the tax. If a person whose income is £300 a year derives none of that income from dividends in a company he pays no tax, but if the whole, or part of that £300 be derived from dividends in a company (the yearly divisible profit of which exceeds £1,300), then upon the amount of such dividonds such person (or the company tor him) payß practically Is in tho £. There aro many persons (aged and otherwise) of limited means whose whole income (say of from £80 to £150 a year) is derived from company dividends. Under the present system that iucome, instead of being free of tax practically contributes Is in tho £ to the revenue each year. A largo majority of those who hold shares in banks and companies are in recoipt of incomes of loss than £1,000 a year, and such incomes should or>!y yiold a tax of Cd in the £. It is ab once apparent how unfairly such persons are treated under the prosont system.

In addition to the above ib may also be pointed oub thab many companies pay tho graduatod lnnd tax, which being borne pro rata by the shareholders still further taxes all income under £1,000 a year.

Why should not the tax on shares in and dividends from companies be assessed against the owners individually, instead of being aggregated and charged to the company ?—I am, etc, W. Thoknjb.