Taxation

Press, 29 May 1981, Page 16

Taxation

Sir,—Some time ago Mr Muldoon advised children that there was no tooth fairy, and now he wants the public to believe his latest fairy story. I refer of course to his statement (“The Press,” May 16) that'the biggest tax bludgers were some solo mothers and apprentice mechanics, who worked part-time for cash. How gullible does Mr Muldoon think we are? Of course he does not want to put the blame where it really belongs; he may upset his friends. I would like Mr Muldoon to refer to page 4 (“The Press,” May 16) where it was reported that two motorcycle dealers had been convicted of sales tax evasion in collusion with some farmers. The next thing Mr Muldoon will want us to believe is his economic “miracles.” — Yours, etc.,

E. R. HAWKER May 18, 1981.

Sir,—P. W. Ramsfords sums (May 21) are the widely held misconceptions. All taxes paid before final resale (including wages) increase the cost of doing business particularly in the cost of holding stock. That cost has to be financed putting pressure on money supply so pushing up interest rates. The Labour Government raised the retail price of petrol from 60c to $1 in one hit. Thfe tax was paid directly by the wholesaler, resulting in the reseller needing to fund 70 per cent more money for the same stock volume. Realising the problem, the Government allowed the reseller 2’/2C to help his cost increase. They thus received only 37Vze of the increase. If they had not collected the tax until the reseller had sold, he would not have needed the 2’zc and the Government would still have received their 37Vae but the price to the consumer reduced by 2!-zc. — Yours, etc.,

D. G. SANDERS. May 25, 1981.