WAGES AND INCOME

Evening Post, Volume CXV, Issue 67, 21 March 1933, Page 6

WAGES AND INCOME

(To the Editor.)

Sir, —Having reference to your remarks at the end of my previous letter, I beg to state that you have failed to appreciate the object of my correspondence. I sought to proye that wage-earners paid more than their share of the unemployment tax, and used the Government's own figures to establish my case. I do not profess to understand the method adopted by the Statistician in arriving at the maze of complex figures submitted, but I do understand by the common rules of arithmetic what proportion of the whole should be paid by a class of the total amount. If the total national income is estimated to be £100,000,000, and a tax of one shilling in the pound produced £5,000.000 when every pound pays its tax, then I want to know why the total estimate for revenue .towards unemployment, for the current

year amounts only to £2,800,000. The whole field of wages is taxed in this re- \ spect. aud every 6s Sd earned must pay its 4d. . Relief work is not considered wages. 'You state, Sir, that '"'individuals who pay income tax also pay the wage tax"; such is not the case. Section 5 of the Emergency Unemployment t Act provides that the income owner who pays the tax by wages can have that amount refunded by income. He is protected against double payment. The £25,1500,000 mentioned by you is, I presume, the taxable balance, and cannot by any stretch of the imagination be the total assessable income, which in the Year Book, 1932, is given as at "£66,500,000, and the taxable balance at £32,750,000. Wages are taxed to their full assessable value, and incomes are taxed only to their taxable balance value, which means over 50 per cent, in favour of income as against wages. Let us have no pretence of equality of sacrifice in stemming the tide and torrent of depression and degradation following in the wake of this barbaric monetary system; but let Christian reality and consistency prevail. The workers have willingly paid their share towards their unfortunate brethren divorced, from the right to work,but stand aghast at the methods of administering the funds and futility of policies applied.- They view with alarm the prospects of the coming winter, when the increase of unemployment can be seen approaching, and no provision made for effectively dealing with the' situation. The taxing of wages at all times is direct rationing of wages. I hold, Sir, that a policy of distributing greater purchasing power and consuming power among, our people in New Zealand can;be the only way out of our economic difficulties.—l am, etc., '

JOHN TUCKER, President, Wellintgon Trades and Labour Council March 16. •

[The correspondent is arguing on a misunderstanding o£ the facts." The £60,000,000 wages shown in the Statistician's estimate includes all incomes obtained from salary and wages, and therefore a great part of the income on which income tax is payable. Income on-which wages tax is paid is not exempt from income tax. Only the actual sum paid in wages tax is exempt. The man with the larger income pays income tax on the amount after allowance for children and other exemptions, and also pays wages tax on the amount without any exemptions lhese facts destroy the whole basis of the correspondent's argument. The correspondent is wrong-also in stating the esti6 * revenue for unemployment as £2,800,000. On March 7 the Minister of -Employment stated it to be £4,050,000. It would be futile to continue the discussion, and the correspondence is now closed.— Ed.]