HIGHER TAXATION

Press, Volume LXXII, Issue 21866, 20 August 1936, Page 4

HIGHER TAXATION

ZEALAND AND *, qOMPARIgOI* OF RATES “It is regrettable that the Minister for Furnace, when putting forward in his budget a table which purports to make a comparison of income tax in 'the;UhiMd Kingdom with that now proposed for New Zealand, should have used out-Of-date rates for the United Kingdom," 1 says a statement by the Associated Chambers of Commerce of New Zealand. “The Minister’s table—with two ex* ceptions in the higher grades of incomes—shows the New Zealand tax** payer with a wife and two children ' as paying less than'the corresponding taxpayer in. the United Kingdom. This is because • the Minister, in his table, used the rates which were in force in the United Kingdom last financial year (1935-36) instead of the rates now operating, and which were announced , on April 21 of this year “It is true that the Minister says, /in relations to his table, that ‘owing to the recent increase Of 3d in the standard rate, the amounts for the United Kingdom are slightly higher in some cases than is shown.’ However, this is not the whole, - story;, because, while the standard rate in the United Kingdom was increased this year, special allowances, irrespective of the size of the income, were also increased. This has the effect, with different grades of income, of reducing the amount paid by the payer of income tax In the United Kingdom. Consequently; the comparison becomes much ,less favourable to the New Zealand ; taxpayer. who. In many cases, is to pay more, not less, than his United 1 Kingdom equivalent. Table of Comparison “The table below—compiled on the same basis as the Minister’s, but at the rates obtaining to-day in the United Kingdom—sets out the position. An addition to the table is a column showing New Zealand income tax plus unemployment taxes. The addition Of unemployment taxes was omitted by the Minister in his table, but it cannot be ignored in any comparative table, because unemployment taxes are in truth nothing more than a form of income tax. fof fahleh there' is no equivalent in the United Kingdom. The second part of the table shows, in comparison faith the United Kingdom, the; heavy taxes on the higher grades of unearned income in New Zealand.” The table is as follows:--Married Couple with Two Children EARNED INCOME TAX

“Mother Hubbard Welcome” • “The hard*hit New Zealand payer of income tax finds himself paying, in many cases, more than the man with a similar income in the United Kingdom. Yet the Dominion has no. Empire to guard, 'no colonies, no pro- - tectorates; in fact, it is making no real financial provision fbr even selfdefence. The proposed expenditure on defence represents dnly 4 per cent, of the total proposed expenditure for the, current, year, ‘*so say that the £6,000,000 which the New Zealand Government estimates income tax will produce this year represents only 23 per cent, of the total estimated yield from taxation, as compared with 40 per cent, in the United Kingdom, and that therefore there cannot be much wrong, is no argument in reply. In fact, this only emphasises the terrific burden of total taxation in New Zealand, which, with the aid of the further imposts of graduated land tax and increased income tax, is to produce an additional yield of more than £4,500,000 for the current financial year. “The fact is that where Britain is calling on her tax-payers for reasons of plain safety, the resources of New Zealand are being depleted for the sake of lavish expenditure on social services, and public works, as if this Dominion is an inexhaustible paradise at whose door it is not expected that need will knock. If it does, it i must receive a ‘Mother Hubbard* wel- : come.” ■■

Assess* able income U.K «■ N.2., N.Z. tax plus ployment taxes. «. £ s. d. £ s. d. £ s. d. 300 nil nil 11 0 0 400 1 11 8 3 8 0 17 14 8 450 4 15 0 7 16 9 23 16 0 500 7 18 4 12 9 8 30 3 0 550 11 17 6 .17 6 9 36 13 5 600 21 7 6 22 8 0 43 8 0 800 50 7 6 44 14 8» 72 8 0 1,000 97 7 6 ' 70 8 0 104 14 8 5.000 1,380 10 0 1,283 14 8 1.451 8 0 7,500 2,476 15 0 2,556 10 4 2,807 10 4 10,000 3,730 10 0 3,936 6 8 4,270 13 4 UNEARNED INCOME TAX 2.000 382 7 6 ,331 12 10 399 8 2 3,000 681 15 0 ' 680 10 8 781 10 8 4,000 1,029 5 0 l,l40 10 8 1,274 17 4 5,000 1,431 15 0 1,711 12 10 1,879 6 2 7,600 2 648 0 0 3.408 13 9 3,659 18 9 10,000 3,801 15 0 5,248 8 10 5,582 IS 6