Social Security Tax

Press, Volume XCVI, Issue 28434, 14 November 1957, Page 14

Social Security Tax

The Labour Party’s proposal for collecting social security tax from self-employed persons, though an improvement on the party's original attitude, is still inequitable. The improvement naturally reduces the amount that this impost would yield—to much below the optimistic forecast of £ 18 million made by Labour speakers. The chief concession now offered by Labour to the self-employed is a promise not to collect the debatable year’s tax from those who have already paid its equivalent ”, whatever that may mean. Presumably this would exclude as a matter of course any person paying this tax in its various forms in 1932. This could easily cut the £ 18,000,000 in half, since as a general rule those who have been longest in a business or trade have the highest current incomes. Other claims for relief would, according to the Labour policy, be considered by a special tribunal, which would require the wisdom of Solomon to decide some of the intricate questions raised by changes in the rates of this tax. In the light of Mr Nash’s own statement on social security tax adjustments in 1947, the tribunal might well decide that anyone paying tax before that date has also paid the “ equivalent ”, still further reducing the field on which Mr Nash could draw.

This leaves some proportion, unknown, consisting of those entering business on their own account since 1947, who would have to find four years’ tax in the next three years if Labour were elected. Without P.A.Y.E. these taxpayers would have continued to pay just one year’s tax each year. Why should they alone be penalised by the introduction of a system convenient and beneficial to taxpayers as a whole? Labour at least should give them the benefit of the £2 a week exemption provided for those earning less than £2O a week, though this would mean extending that exemption to persons with higher earnings, too. The Government went as far as anyone could reasonably expect (and further than was altogether just) in leaving, as before, the disputed year’s tax for collection in the year after the taxpayer’s death. The organisations of State employees, speaking for the largest single group of wage-earners in New Zealand, accepted this as a fair response to its representations. Mr Nash might be prepared to accept it, too, if he were not looking everywhere for some source of revenue, however small, to justify his election bribe of £ 100 to payers of income tax. This particular source may produce as little as £2,000,000 a year for three years.