Taxation

Press, 20 April 1982, Page 20

Taxation

Sir,—The taxation of savings interest without adjusting for inflation is both inequitable to the saver and damaging to our economy. The return on monetary savings after the deduction of tax generally leaves the saver with savings that are decreasing in value in terms of purchasing power. Monetary savings are used for investments which increase our standard of living and provide or maintain employment. Many savers who would normally save in monetary assets are now, instead, buying assets which appreciate with inflation, the reason being that this type of saving attracts no tax. Land is a good example, especially farmland which has become particularly overvalued in relation to farm income potential. The crunch is that savings that flow on to increased investment and increased employment have decreased, and will continue to decrease, until savers in monetary assets get a fair deal. — Yours, etc., V <. '•

SIMON D. WHITE, April 17, 1982.

Sir,—lt concerns me greatly that the Government is considering actioning the McCaw report on taxation. As usual, the Labour Party has merely pointed out the obvious: that it will- offer little help to lowincome families and will create a rise in the cost of living of approximately 10 per cent. What they have neglected to point out is that it will offer no help whatsoever to people on non-taxable allowances, like teacher trainees who are already faced with an allowance which has not changed for the last five years, and now face more than their fair share of the $5O million which is to be cut from next year’s education vote. How much do we value the standard of our children’s education and . the, future teachers who will play a large part in it? — Yours, etc.', .

JOHN YOUNG. April 18, 1982.