New tax rates

Press, 8 October 1988, Page 20

New tax rates

Sir, —I am a married taxpayer whose spouse directs her fulltime effort into home-making. Under New Zealand law she is assumed to have “earned” half my income by reason of that activity. We, as a family, pay nearly $217 a week in income tax. Yet if we had earned that income equally between us we would only have paid $9l a week each (total: $182) — a whopping $35 a week less! This is effectively discouraging single-income families, and is manifestly un-

fair; but it is better than before the October tax changes when we paid $260 a week on the same income! It is true that single-income families gain more from the new tax rates, but this is just recompense for all those years of paying more than our fair share. What is needed is either a flat-rate tax, or some form of income-splitting or dependent spouse allowance. — Yours, etc., lAN JOHNSON. October 6, 1988.

Sir, —If the Government wanted to tell us that the tax rates are coming down, a simple press release, costing almost nothing, would do. Those of us who missed it would come to no harm; we would merely be pleasantly surprised when we collected our pay packets. If, however, it is trying to convince me that a tax cut is fair and reasonable when it gives the Prime Minister an increase in net salary which is greater than many people’s entire yearly gross pay, it will need to spend a lot more than $2.5M. — Yours, etc.,

c. e. McLaren. October 6, 1988.