Tax cuts

Press, Volume CXV, Issue 33805, 31 March 1975, Page 10

Tax cuts

V 11 Sir, — I n .tice in “The Press” a statement by the f i Federation of Labour that a - tax cut is just not on. The 1 Government has not coni’suited the F.O.L. on the ;! issue. I would like to know > who is running this country I: the Government or the < F.O.L? A tax cut puts more y cash in the employee's! - pocket without any rise in! I prices whereas as Mr W. J. : Knox wants a 7 per cent* J rise in wages, this can only l ; i result in rising prices and . more headaches for the wife; and housekeeper. — Yours,' JOHN CITIZEN. I March 26, 1975. [The Minister of Finance! (Mr Tizard) replies: “In the context of my statement I ' was referring to the effect of I the graduated scale of income tax. As a person’s income increases the rate of tax on that income also increases. However, once having reached the maximum rate of I tax any additional amount of income received by a tax-' i payer continues to be taxed' lat the same rate. As I have: 'already indicated, the whole itax structure is at present! i being given close study. It would, therefore, not be appropriate at this stage for' me to comment on whether, (or not, the present maximum! irate of tax should be altered. I can say, however, that any change would need to be considered in the context of a Budget.”]