A STAMP TAX

Evening Post, Volume CIX, Issue 115, 17 May 1930, Page 9

A STAMP TAX

SALARY AND WAGE

CQUAU7Y OF SACRIFICE

HELP FOR WOEKLESS

By a , compromise tentatively arranged between the Labour Government and tho Opposition in tho Victorian Legislative Assembly on 6th May, the Government, makes the proposed unemployment relief taxation less severe on higher incomes. , The argument that over-taxation of income will dry'up the sources from which income comes seems to have prevailed. The amounts payable under the compromise are shown in the following tables. Tho first table shows the amounts- which will be paid by persons who reeeivo up to £312, and who will pay weekly in the form of a stamp tax. Both the weekly payment, and the amount which this represents annually, are shown. The amounts payable as super-tax on incomes of more than .€312 are shown in the second table.

A stamp tax on weekly wages is a new feature in a country which hitherto [ has known the annual income-tax on 1 salaries, but which has not hitherto been driven to the stamp-tax expedient. There seems to be no other.way for a tax-gatherer to reach wages quickly. \ Australian income-tax machinery has not hitherto reached down to the lower, \ wages. It has reached down lower than the New Zealand income-tax cx"emption limit of £.300, and some of the States have taxed down to £200 and even lower. But it is exceedingly i unlikely that any State Government . has ever collected —as assessments for income-tax —one-tenth of the lower wages that will conic within the scope of a stamp tax levied weekly. When, therefore, an Australian Treasurer looks to wages for a contribution to unemployment relief, he knows that he cannot reach wages through the incometax machinery or through the information in the income-tax office. So he reaches out for a stamp tax. And to raise an extra contribution from those salaried persons whose returns are in the income-tax office, he employs a super-tax on income's. "Since time is a vital factor in providing relief for unemployment (writes the "Argus"), the possibility of immediate collection by stamp tax from persons who have not had .to supply income-tax returns, and by* super-tax from those whose ordinary returns are already in the hands of the Department, appeals to common sense. The trifling weekly payment by wage-earn-ers, too, is likely to be less onerous than a lump sum yearly. On the other ha,nd, the compromise contains much that is objectionable. The stamp tax as originally adopted by the Opposition had as its most praiseworthy feature equality of basis. Where for practical reasons it was necessary to levy on incomes as annual incomes, with the aid of the ordinary income-tax machinery, it was proposed to levy only Id in the £1, as in the case of stamp tax. Thus each receiver of an income would have paid in the year as many pence as he' received pounds, those in receipt of large incomes paying correspondingly more than wage-earners. HIGHER INCOMES, HIGHER TAX. "Such a basis is peculiarly suited to an impost designed' to raise funds for a humanitarian purpose. It emphasises the idea of equality of sacrifice. It does not introduce the objectionable political tinge inseparable from the penal sliding-scale of the ordinary in-come-tax. • A departure from equality of rate,, however high or however low it begins, is a departure from principle. Under the compromise those receiving more than £500 a year have been singled out to pay! more than they would have paid had the basis of Id in the £1 all round been retained. On incomes of £600 and £700 the increase is not very great, but on higher incomes upon which the maximum rate of 2 per cent, contained in the Bill operates more ■than three times as much will have to be paid: It is not a valid argument that these higher incomes can bear the heavier rates. That is neither ethical nor true. Those receiving large incomes have already been severely hit by income taxes, Federal and State, and they are of a class which has inevitably suffered in the current commercial depression. . . "The more the unemployment problem is examined the jnore tragic appears the earlier refusal of the- rank and file of the Parliamentary Labour Party to deal with it on any other basis. As matters stand even now, only the fringe of the problem has been touched. The £800,000 which the Ministry hopes to raise will not go very far among the many thousands for whom it essays to cater, and only a limited number of tho 30,000 unemployed can be given work. Unskilled manual work is the only kind which it is practicable to provide for the relief ! of the workless, and all those out of : work are not suited for such employment. What, for example, is to bo done 1 for unemployed clerical workers and • unemployed women? Obviously they ' cannot be set to work with picks and ■ shovels. Are they to starve or be • given charitable doles? Or is private ■ enterprise to be subsidised to eneour--1 age the provision of appropriate work • for them?"

Annual income. Tax per week. Tux per year. £52 .... Id 'V* £104 .... 2d 8/8 £20S .:.. 4(1 IT/4 £312. .... (id . 2°/-SUFER-TAX. Annual income. Tax payable. £ s. d. , £400 2 0 0 £000 2-H) 0 £000 12 0 £700 .• ■ 4 <! 0 £800 5 12 0 £1000 7 0 0 £1200 ».., 0 12 0 £1500 15 0 0 £2000 24 0 0 £3000 30 0 0 £5000 05 0 0 DIEECT ACCESS TO WAGES.