New tax rates today

Press, 1 October 1979, Page 1

New tax rates today

PA Wellington The Government’s Bud-get-night income tax package comes into force today. It includes measures "hich the Prime Minister (Mr Muldoon) said would be necessary to offset a trend for the economy to become “somewhat less buoyant” later in the year.

From today, the rate of income tax will be lowered from 38 per cent to 35 per cent on that part of taxable income between $4500 and $lO,OOO a year, that is, between $B7 and $192 a week.

The upper limit of the 35 per cent bracket will be extended from $lO,OOO to SI 1.000 (from $192 to 5212 a week). Previously income in this range was taxed at 48 per cent.

The rate at which spouse rebate and single-income family rebate are abated for income in excess of the limit will be reduced from 25c to 20c in the dollar. The income level at which the young-family rebate begins to abate will be raised from $7BOO to $9360 a year (from $l5O to $lBO weekly).

The family benefit rises from S 3 weekly to $6 weekly a child. Mr Muldoon said in his Budget announcement that these measures represented a more expansionary fiscal stance by the Government. They were designed to offset a contradictory effect on real disposable incomes. which would otherwise be caused by the combination of monetary restraint, rising prices, and the effect of inflation on the tax systems. He hoped they’ would also reduce marginal and average tax rebates and provide a greater reward for effort.