Tax aggregation opposed by accountants

Press, 14 January 1982, Page 2

Tax aggregation opposed by accountants

PA Wellington A typical working married couple could expect to pay about $3OOO extra between them in tax if aggregated taxation became Government policy and if present

tax rates do not alter, according to the chairman of the Society of Accountants’ taxation committee, Mr Colin Blair. He said that on the other hand, a one-income family could pay $4OOO less in tax if that income was spread between them. Mr Blair had been asked to explain how aggregation of taxation, or the spreading of the burden, might work. Both options were mentioned by the Prime Minister (Mr Muldoon) in his address to the Orewa Rotary Club on Tuesday. Speaking about the taxation task force, which the Government set up last year, Mr Muldoon said that it was considering the details of personal income tax. He said, “That is to say. they are considering whether the present method of taxing individuals is fair. Whether, for example, we should not lump together the total income of a family unit, husband and wife, and tax it as one income, this being fairer to the single income family.

“The alternative is to spread the income of the single income family over both husband and wife and thus tax it at a lower rate. There are various permutations of this kind of approach involving family responsibilities." Mr Blair said that the society had made it clear to the task force that it did not' favour aggregation of taxation. His initial reaction was that aggregation of income should mean an increase , in tax payable by the twoincome family. Mr Muldoon had said that this would be fairer to the single-income family but it would penalise the two-income home.