Taxation
Sir,—l cannot understand how advocates of turnover tax can have us believe that prices will fall as a result of its implementation. If we look at the situation in simple terms, the amount that will have eventually to go through cash registers will be:— (1) current sales, less (2) current sales taxes, customs duties etc., plus (3) f total. Government expenditure (any lesser amount would require deficit financing by the Government). Only if (2) is greater than (3) will prices (over all) not rise, this is obviously not the case. Consequently those on lower incomes will suffer to the advantage of the. already wealthy, because they will pay a far higher percentage of their incomes in taxation than previously. 'Even a flat rate income tax is more equitable than. that. I agree that the current tax system needs. overhauling but a tax that leads the rich to prosperity and the rest to poverty is not the answer. I would suggest a tax credit system details of which can be found in any recent economics text.—Yours, etc.,
P. W. RAINSFORD. May 19, 1981.
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Press, 21 May 1981, Page 16
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183Taxation Press, 21 May 1981, Page 16
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